Blog Article

Businesses that live in glasshouses…

Posted by Marc Sowik

Marc Sowik

There’s a new feature on the online career community website Glassdoor.com; a symbol that appears when ‘the employer has embraced transparency and taken extra steps to engage with their employees’ via the site. Firms will now be rated on how seriously they take transparency, so not only will we get to see inside the company – the culture, the perceptions of the senior management, the downsides and even the pay bands – but we’ll see how comprehensively they respond to the picture painted by current and former employees.

This is valuable, because as an employee, I want to know that I’m working for a company that’s committed to an open dialogue with its people. Glassdoor support this idea with their own research: they reckon 96% of job seekers say it’s important to work for a company that embraces transparency.

Admittedly, Glassdoor itself and jobseekers are only a small part of this puzzle from an organisation’s perspective, with current employees, stakeholders and regulators to engage and manage. But the concept of public dialogue it champions will become increasingly important to current and potential employees and consumers alike. Organisations will have to proactively engage with people in an impartial environment, and respond to assertions about their values, culture and conduct. Those that don’t participate in this way risk loss of credibility, trust and ultimately loyalty.

So it comes as no huge surprise that we’ve (at Hay Group) recently identified transparency as one of five key business challenges that organisations will need to tackle (both now and) in the future. Companies will need to adapt quickly, as there is increasing pressure from employees, the public and politicians for them to operate in a way that is socially conscious. However, we still see evidence of a reluctance to make the changes. Take this recent example; only five UK companies responded to the ‘Think, Act, Report’ initiative by voluntarily publishing details on the gender pay gap amongst their employees. The disinterest amongst the business community has provoked politicians, and now all large companies will be forced to publish these figures within the next 12 months (or face a pretty meagre £5,000 fine). Obviously there are many reasons why a company might not want to participate in this type of initiative, but it’s certainly one small signpost of a shift in what people expect from companies as participants in public life.

Something to hide?

David MacLeod (Co-founder of the UK government led Engage for Success Movement) states that ‘companies will soon have nowhere to hide’, and whether this be because of public pressure, government legislation or the digital domain opening channels that reveal once hidden business workings, his words ring true. For me though, the idea of having ‘something to hide’ is a signpost of the mind-set that’ll have to change if organisations are to make transparency work positively for them. Without authenticity running through the company’s values and DNA and being translated into their day to day operations, the pull towards open and honest business practice probably seems more like a risk than an opportunity to some.

Tesco were one of the companies that did voluntarily publish gender pay gap information, which considering only five businesses did, was largely regarded as a bold and singular move as one of the UK’s largest employers. I think this reflects positively on Tesco; firstly because their pay gap is much lower than the national average (1% to the UK average of 10%), but also because publishing any information like this is a risk – but in taking the risk I think they display an authentic commitment to being a responsible and fair employer.

The game changer

Digitisation has changed the game and raised the stakes. Where once an employee’s sphere of influence was the people they could get to physically listen to them, they can now reach millions of people in seconds, on platforms designed to promote hyper-transparency. Where their experiences don’t align with the image a business promotes of itself, there is an elevated risk that transparency – be it forced or voluntary – could backfire and cause reputational damage, both as an employer and in the way customers perceive them. Those that get this alignment right should expect to bolster their reputation with the people they depend on.

What can we do about it now?

The idea that a company’s employees are its most influential ambassadors has been amplified in the connected world. Addressing transparency internally and committing to it will help employees feel as though they are a trusted and integral part of the organisation’s success, with a clear vision of how they play into the future direction. Here are some ideas:

  • Make pay information available internally. One of the more successful ways of doing this is to policies pay bands as opposed to individual’s remuneration packages (they’ll probably be on Glassdoor anyway).
  • Make it clear what people need to do to reach the next level or achieve their career goals. Having consistency across the organisation through calibrated performance assessments and promotions criteria is important in letting people know what to do to progress. We often see people feeling that they have a future with a company as being a driver of effectiveness and loyalty, but our research with millions of employees worldwide shows that 41% don’t feel they have a clear career path.
  • Be honest about employee survey results. This is key at all levels of a company. From the initial communications about the results and the shape of the company to local action planning, this needs to be an open and honest dialogue with staff. Managers especially need to know they’ve got the support they need to make change, so they don’t feel tempted to sweep bad news under the carpet.
  • Consider your organisation’s response to opportunities like the Think, Act, Report initiative
  • Back to Glassdoor.com – consider the impact that an unclaimed employer profile might have, especially when compared to a competitor that might be engaging current and potential employees using this powerful platform.

For more advice on overcoming the transparency challenge you could download our new report Engaging hearts & minds: Preparing for a changing world.

What steps is your organization putting in place to be more transparent? And do you think it’ll become increasingly difficult to adapt to in the future? It’d be great to hear from you! Contact me at Marc.Sowik@haygroup.com.

 

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1 Comment

  1. Matt Gurin

    Matt Gurin

    March 31, 2015 at 1:29 pm

    Great piece Marc, and a wonderful example of content marketing. I wish more of our folks would so fully wrap our informed views in broader research and references. Well done.

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