A new report shows that organizations are becoming more open and honest about their offerings in order to retain top talent.
By Zee Johnson
Workers are looking for more transparency from their employers, and Payscale’s inaugural Retention Report suggests that they are demanding it across the board—with compensation, insight into the health of the business, and even how their pay is determined.
While the report found that how a company looks to the future is the number one cause of employees seeking new job opportunities, the research also shows that attrition decreases when businesses are transparent about things like salary bands. In fact, the more transparent a company is about pay, employees are 30% less likely to seek a new job.
For instance, companies in professional services or scientific and technical services that are transparent about their pay practices saw attrition decrease by 36%. And for businesses in accommodations, food services, and retail, the odds of employees seeking a new job decreased by 28% when they were open about compensation.
Lexi Clarke, Payscale’s chief people officer, says that the ability to be upfront with employees starts with a clear understanding that pay practices are equitable to begin with. “In order for organizations to effectively communicate with their employees about pay, they must first be confident in their salary data, compensation strategy, and pay structures, and that they are actually paying people fairly,” she says. “You should be prepared to explain why employee pay is fair, how it’s determined, and how it can be progressed.”’
Clarke knows that utilizing a total rewards statement is one useful tool to clearly outline an employee’s base pay, bonuses, PTO, stock options, and even the monetary value of benefits. According to the report, 57% of organizations provide a total rewards statement to their employees, and by doing so, HR leaders have the opportunity to facilitate career conversations and increase company trust.
Discussing compensation and benefits early on is the very best way to entice qualified, top talent, Clarke says. In fact, in today’s market, some candidates will immediately overlook a job posting that doesn’t list salary. Instead of viewing this as a hurdle, Clarke says the best companies genuinely consider what workers want. “Employers should welcome this change. Being transparent about pay is a positive branding opportunity. It shows you value your employees and are equity-minded and forward-thinking, which is attractive to top talent,” Clarke says. “It also makes your recruiting efforts much more efficient, as only candidates aligned with the compensation range will pursue the role.”