Transparency is an important part of relationships – between friends and family, colleagues, partners and, now more than ever, between employers and employees.
In our Talent Index Seventh Edition research, we spoke to over 6,000 workers from the US, UK and Nordics about work, and the idea of ‘transparency’ came through as a key theme. Employees are worried about a lot of things: job security, the economy, rising inflation, and the overall health of the organization they work for.
And while many organizations don’t have the budget to offer pay increases or cash bonuses at the moment, what they can do is work towards other low-cost ways to keep their current employees (and candidates) engaged.
One meaningful way to do that is to be more transparent with employees and candidates about business outlook, development opportunities that are available, and salaries.
Candidates want to see salary ranges before applying for a new role
Based on our recent Talent Index study, candidates prefer to see salary ranges on job postings. In fact, 34% felt very strongly and said it was ‘essential’ for them to see a salary range before applying for a new role, and they would not apply without that information. Interestingly, those in the Nordics were least likely to feel this strongly, with only 22% saying that knowing the potential salary was ‘essential’ before applying.
In addition to the workers saying that they won’t even apply for a role without pay transparency upfront, another 39% said that they would be much more likely to apply for the position if they had access to this information, and 13% said they would be slightly more likely to apply if the salary information was shared.
So overall, 73% of respondents said that they would be more likely to apply for a role (or would only apply for a role) if the salary information was clearly stated in the job ad.
With more and more geographies requiring pay transparency by law, and so many candidates looking for it, why are some employers still holding back?
If your organization isn’t already sharing specific salary ranges in your job descriptions, it may be time to rethink that. We will still see a lot of workforce churn in 2023, and there will be a lot of candidates on the job market. 31% of people we asked said they had already been laid off within the last year, and another 37% are worried about being laid off. And 51% said they are considering leaving their jobs within 12 months on their own volition (presumably to look for roles with more stability or perhaps higher pay).
That means there are a lot of talented workers searching for jobs (either actively or passively) – and if you aren’t being transparent about what they can expect to earn, you will most likely miss out on high-quality candidates who have the skills your organization needs.
Employers aren’t as transparent as employees would like about internal salary ranges
It’s not just external candidates and active job-seekers who care about pay transparency. Your current employees want you to share this information internally as well.
We asked over 6,000 workers if their employers were clear about salary bands within the organization, and 38% said their company was very clear about salary ranges internally. However, another 27% said that while their employer does share salary ranges, the ranges are either too large to be helpful or are very unclear. And 26% of respondents said that their employer didn’t share this information with employees at all.
Although it’s worth noting that Directors, Senior Managers and C-Level executives were more likely to think the salary bands within their organizations were ‘clear’, compared to more junior employees. There’s a clear disconnect here – business leaders think they are being transparent, but employees still feel as though they are left in the dark.
Perhaps it’s time for organizations across geographies and industries to be more transparent with employees about salary bands? After all, we mentioned earlier that despite the threat of recession, 51% of workers are at least thinking about leaving their jobs within the next year. These workers are disengaged, and if employers don’t work to re-engage this group, they could potentially lose them.
If you want to keep this half of your workforce engaged in their work and ultimately retain them, it’s important to share salary information internally. We’ve learned in previous Talent Index research that internal careers options are one of the most effective ways to engage and retain talent.
But your disengaged employees (or those who are looking for roles with higher salaries to help offset the increasing cost-of-living) might not even apply to an internal role within your company if you don’t share the salary they could expect upfront.
Communicate openly about internal career and development opportunities
Pay transparency is important, but it’s not the only thing that workers care about. Our Talent Index research shows a clear desire for internal learning and development opportunities and visibility into internal career paths.
Out of the 51% of those who said they are considering leaving their job in the next 12 months, 12% said that it was because there are little or no career development opportunities in their current workplace.
61% of people we surveyed said they are interested in learning new skills in their current workplace. 27% of that group said they have already started an upskilling program, but that leaves another 34% who desire to upskill and learn, but have not been given the opportunity.
It’s not always about whether or not these opportunities are available internally, or about people not being willing to participate. Sometimes the issue is that these opportunities are not communicated well internally, or they are difficult for employees to find.
When you take it a step further and apply AI to your internal mobility and L&D programs, you are able to tailor these experiences to each individual employee. AI can make smart recommendations for training programs or open roles they would be a good fit for, based on the employee’s current skills.
This can also help meet DE&I targets within the organization. When opportunities for career growth and development are transparently and openly communicated and are available to everyone in the company – people who may not have applied before – may do so now that it was recommended to them.
Transparency goes a long way with a workforce that is worried
Our latest Talent Index research revealed that the workforce is worried. 37% of the people we asked said they are at least partly worried about being laid off from their current job. And out of that group, 23% said the reason for their worry was because there has been a lack of transparency from leadership.
23% of those who are worried said they are less motivated at work because of this fear and another 18% said they are less productive at work. A study from Workhuman found that nearly half of workers have chosen to take on a side hustle to act as a buffer in case they lose their jobs. People are working even when they aren’t at work, so it makes sense that they would be less productive and unmotivated during an uncertain economy.
While business leaders may not be able to share every single small detail about organizational health and finances, sharing what you can with your team members is extremely valuable. When employees are well-informed on how the organization is doing, and what the next steps are to ‘bounce back’ and achieve continued growth, they feel as though they are valued and are an important part of the company.
Withholding information during a time of stress and anxiety amongst your workforce will likely do more harm than good – honesty and transparency are the best policies.
During a time when external hiring has slowed for many organizations, employee engagement is critical. Business leaders are feeling the pressure of tightening budgets, making it difficult to keep up with employees’ increasing expectations around pay, benefits, and job security.
The good news is, there are other ways to keep talent engaged besides offering pay raises or cash bonuses – one of those is to be as transparent as possible from the top down. When leaders communicate openly about organizational health, learning and development opportunities, possible internal career paths, and salary ranges, employees are more likely to feel valued, and to stay engaged.
If your organization does not openly share salary ranges, you are certainly not alone. As important as pay transparency is to your talent, it can be a heavy lift to put the right foundations in place to be ready for this step. But by putting it on your roadmap, you are moving in the right direction towards the transparency highly valued by candidates and employees.