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  1. Blog
  2. Diversity
  3. August 20, 2021

Trust, Accountability & Retention: Why Transparency at Work Matters

It’s the ownership for us

Businesswoman speaking
Photo courtesy of George Milton

Transparency is best defined by its synonyms: clarity, openness, honesty, directness. In the workplace, transparency between employer and employee creates an atmosphere of safety and trust. It allows colleagues to be open with each other too, in everything from compensation and bonuses to skill development and project feedback.

Making a workplace transparent begins with identifying problem areas and taking ownership of them. In other words, being transparent makes everyone there accountable to fix the problems, starting at the top.

Why bother?

Simply put: Transparency is good for business. Take pay transparency, for instance. According to compensation platform beqom, “when employees perceive a pay gap, regardless of whether their perceptions are correct, this has a direct, negative effect on employee retention resulting in a 16% decrease in intent to stay.” Approaching that from a different direction, more than one-half of those surveyed by beqom said they would consider switching jobs for a company with more pay transparency.

Read more: 3 Companies with Full Pay Transparency & Why That Matters

Where transparency in the workplace is needed most

We asked researcher Kimberly Earles about transparency in the workplace. She wrote a report last year for the Washington State Labor Education and Research Center and SEIU 925 about equity issues in tech employment specifically, called The Gender Divide in the Tech Sector. Earles tells InHerSight that her research found many situations workers in the tech industry said require more transparency. Beyond pay, these include:

  • How HR deals with complaints such as sexual harassment and assault, and microaggressions. (InHerSight measures this as Employer Responsiveness.)

  • Issues around performance review bias, with women often punished for speaking up or being “too aggressive,” which leads to being passed over for career advancement opportunities.

  • Gender career tracking, when women are hired or promoted into less prestigious and lower paying positions. For working moms, this is also known as mommy tracking.

Read more: Words Matter: How ‘Bossy’ and ‘Feisty’ Undermine Female Employees

“While most tech companies acknowledge there is a pipeline problem, most do not acknowledge the problems women, gender nonconforming folks, and BIPOC workers face once they are employed in tech,” Earles says. “Many face a hostile work environment, and as a result, turnover among these groups is high. More transparency about turnover among underrepresented groups could help to tackle the issue rather than ignoring it, which leads to an incredible waste of talent.”

Remember the beqom survey? Almost one-half of those respondents (48 percent) said they would consider leaving their current job for a new employer with a built-out DEI strategy. InHerSight’s own data backs up that finding: In 2021, a survey of 3,000 employees found that 53 percent said people are unlikely or very unlikely to stay with a company that does not have visible or measurable DEI engagement.

But there’s more. 

Read more: 7 Companies That Rank Highly for Partial Pay Transparency

“Another area requiring more transparency is the role and power given to the diversity and inclusion officers at tech companies,” says Earles. “Most tech companies have had someone working in this role for the past 5–10 years, but it appears that most of these positions do not carry much weight to make substantive changes within the company, and that such change can really only come from the CEO or C-suite.”

Similarly companies that publicly disclose general and PR-heavy DEI policies are not being truly transparent. They become so only when they state their targets, ask for and use employee feedback, and then follow up with year-over-year comparisons.

Read more: What 6 Companies Are Doing to Bridge the Gender Pay Gap

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3 examples of transparency in highly successful businesses

1. Buffer

Some businesses have baked transparency into their DNA.

Buffer, for instance, a social media management software company, is transparent with respect to salary and diversity. For instance, Colorado-based cofounder and CEO Joel Gascoigne makes just over $290,000, while Cheryl on the Advocacy team in Ghana makes almost $55,000. They also show their salary formula, which is the role benchmark multiplied by cost of living based on the employee’s location.

In terms of diversity, there’s still work to be done, which makes the company’s transparency even more laudable. The vast majority of people at Buffer are white, and the gender split is nearly half at 55 percent men and 45 percent women. Surprisingly leadership is 71 percent women and 29 percent men, but technical roles flip that with 72 percent men and only 28 percent women. 

Read more: Are You 'The Only' at Work? Here's How to Broaden Your Network

2. GitLab

GitLab, an open DevOps platform, details its six values—one being transparency—in its handbook. (Notice how, even this, is publicly available.) Transparency at GitLab is a default. It starts with the hiring process and includes everything from its code and roadmaps to product management processes.

The organization does not make individual compensation public, although job applicants can access a compensation calculator to determine the total package offered, which is made up of cash plus equity plus benefits. The transparency value here is that at the time of hiring, candidates don’t have to negotiate blindly. Similarly, when employees move across levels and departments, they can see what compensation adjustment to expect.

The compensation calculator is in line with DEI goals, too. According to GitHub, “the Compensation Calculator reduces unconscious bias or giving higher pay to individuals who can negotiate better. The Compensation Calculator allows us to take a data-driven approach to compensation where there's fairness across all teams, levels and countries.” 

3. Whole Foods

Whole Foods is another company that is transparent about pay. On its career path page, the organization states its belief that “every one of our stores has a path for you to grow – from Team Member all the way to leading an entire store.” Then it has a job description and average pay for all employee levels, from entry at team member ($30,000) to store team leader ($99,000). 

This kind of transparency can be life-changing. Whole Foods cofounder and CEO John Mackey says that for employees who don’t have a college degree, seeing how much they can make as a team lead, for example, gives them something to strive for and aspire to.

Read more: How Microaggressions Affect Belonging in the Workplace

How can employers become more transparent?

The willingness to learn and embrace change on a continual basis is a necessary foundation on which to successfully establish transparency in the workplace. An environment where all employees are free from fear and have a sense of belonging is one in which creativity flourishes, productivity increases, and turnover plummets. 

The simplest first step is to make salary information more visible. Dan Price, founder and CEO at credit card processing company Gravity Payments, famously did this in 2015 when he publicly instituted a minimum wage policy of $70,000 for all his employees. But being fully transparent about compensation must also include information about how bonuses and raises are determined.

Read more: A Thousand Paper Cuts: Microaggressions in the Workplace

Managers should be “accountable for the equitable distribution of bonuses and, where appropriate, promotions,” writes Jim Link, chief human resources officer at Randstad North America. “That way, if leadership starts to notice disconcerting patterns (such as men receiving larger bonuses than women for the same kind of work), they can address and correct them.” 

The company needs to be “vocal about this commitment to employees, encouraging them to come forward with any concerns around compensation,” Link adds. “Doing so can also help move the needle on diversity and inclusion because it demonstrates to employees that leadership is invested in fair outcomes.”

Another relatively simple step is to offer mentorship programs and employee training and development opportunities. That not only makes it clear that there is a future for every employee at the company, but it allows employees to visualize and take ownership of their individual future success.

Read more: Why That Feeling of Belonging in the Workplace Is So Important

“Employees are generally happier when they feel like they receive training that enables them to do their jobs better, and one reason why there’s so much turnover in the modern workplace is that employees often feel that organizations don’t have their long-term interests at heart,” writes Art Markman, vice provost of education and professor of psychology and marketing at The University of Texas at Austin. “Training and education programs are a great way to enhance trust because they demonstrate a clear desire to focus on employees’ long-term effectiveness and well-being.”

Transparency is of course expected when it comes to a company’s finances, growth, and operational success. It’s often another story, however, when it comes to internal-facing issues like pay and corporate culture. 

In his report Elevating Equity: The Real Story of Diversity and Inclusion, global industry analyst Josh Bersin writes: “If DEI is part of the business strategy, then metrics and progress need to be shared with the workforce, too. Metrics and measurements help set goals, create plans, and prioritize work. According to our study, fewer than one in three organizations do this well.”

Read more: 7 Hidden Ways Companies Can Buy Into Gender Equality Fast

About our source

Kimberly Earles received a Ph.D. in Political Science from York University in Toronto, Canada, focusing on gender, employment, and social policy. She has completed research projects for the National Action Committee on the Status of Women, the Washington Education Association, the Washington State Labor Education and Research Center, SEIU 925, and OneAmerica on topics as varied as local and global gender issues, gender and compensation for educators, and gender discrimination, equity, and job quality in the tech industry.

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Stephanie Olsen

Contributor

Stephanie Olsen is a freelance writer and copy editor. She writes about everything from women’s issues in the workplace and Ethiopian coffee culture to facilities management and expatriate life. Laughs uproariously at her own jokes.  

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