Leveraging Transparency Is the Future of HR

Transparency and the data that comes from it will hasten the transition of HR into a true strategic function, said Glassdoor CEO Robert Hohman, speaking recently at the 2016 Glassdoor Summit in San Francisco.

"Transparency as a movement is bigger than you think," Hohman said. "And it comes with a tremendous responsibility, but also an enormous opportunity." 

Sharing has become the new normal, he said, whether it's exchanging information about what it's like to stay in a hotel or visit a restaurant. It's permeated everything from large e-commerce sites to car buying and travel choices. But it's bigger than that, he continued.

"This data exchange begins to make machines smarter. It enables things like Amazon Prime and self-driving cars. Marketplaces that never existed before like Uber and TaskRabbit have been created to fulfill needs. When we combine machines with this level of transparency and data, we enable better, faster and more powerful ways to live and interact with each other."

The workplace has benefitted—and been challenged by—transparency. "Employers must now strive to create a favorable impression to job seekers that may not even realize they are job seekers," Hohman said. People have always reached out to one another to try and scrape together information on what it's like to work at a certain company or what the salary levels and benefits are like, he added. But it was harder to do before technology enabled transparency to flourish.

"In a matter of minutes today, a job seeker can research a company, get a sense of the culture and the compensation and benefits, understand the interview process, and see all competitive job listings within a 20-mile radius. This is in part why we see an accelerating increase in the pace of changing jobs. Transparency is enabling people to make faster changes in their careers."

Stepping Up to the Challenge

Hohman described transparency as a force which has reshaped industries and one that will not go away before it fundamentally changes human resources. He argued that the trend places more responsibility on HR to be strategic. "If HR and recruiting professionals master transparency, they will dominate competitors in talent acquisition," he said. "My CHRO and her team are my strategic business partners who tell me where we have talent, where we need it, how we're going to grow it and what our ability to attract it is."

Just 10 or 20 years ago, HR's focus was primarily on legal and compliance issues, he said. "Transparency requires that this function move out of the tactical. The good news is that technology enables HR to do this, through richer communications channels and more intelligent data on what is happening, how your people are feeling, and how your company is being perceived. Today an HR professional must understand what drives human behavior to drive change in the workplace. That means deeper relationships with marketing, PR, communications, and learning and development, all of the things which, at scale, project your employer brand to millions of people."    

The Opportunity Is There

The data from transparency can be accessed, evaluated and applied to better understand the sentiments of the workforce, learn from ongoing feedback and improve recruiting, retention, and skill and career development.

"We know that transparency drives productivity gains," he said. "Employers that switch from a pay secrecy model to open compensation policies experience large and long-lasting boosts to productivity. Studies find that when pay is secret, employees commonly overestimate others' pay, hurting their job satisfaction. Workplace transparency creates fair pay practices and closes the salary-negotiation gap between men and women."

Transparency also allows leaders to shine, he said. "A satisfied workforce is an essential driver of CEO ratings on Glassdoor. And that is driven largely by who is chosen as senior leadership. Workers and job seekers want to hear from leaders about what they believe is important, about the organization's culture, values and what drives it."

The link between employee satisfaction and financial performance has been quantified due to data from transparency, Hohman said. "We've always known that there was a link, but we could not establish if the link was causal. Were employees more satisfied because the company was doing better, or was the company profitable because employees were more satisfied? We now know that happy employees really do create more economic value for companies and shareholders. Employers must invest in their culture."