Employees Are Demanding Transparency Here’s What Organizations Need to Know, According to HR Advisory Firm McLean & Company

As organizations experience pressure from employees and other influential organizations to be more transparent amid an already-challenging labor market, McLean & Company, one of the world’s leading HR research and advisory firms, has released the timely resource The Rise of Organizational Transparency. This data-backed blueprint was designed to help HR leaders understand the spectrum of transparency and determine organizational readiness using five key criteria.

The movement toward organizational transparency is driven by employee expectations as well as external pressures, such as the publicized transparency in pay, succession planning, decision-making, and other processes by major organizations like Microsoft, Adobe, and Glassdoor. While organizational transparency might be daunting to some, almost three in four employees want their employers to provide more transparency, equating to nearly 75% of the workforce supporting more transparency around salaries, job growth opportunities, and more.

“There is no one-size-fits-all approach to organizational transparency,” says Janet Clarey, director of HR research and advisory services at McLean & Company. “The level of transparency an organization implements can fall anywhere on the spectrum, from zero transparency to radical transparency. Different levels of transparency can be used for different HR programs, organization processes, and operations, and can even vary between internal and external stakeholders.”

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According to the McLean & Company Engagement Survey Database, employees who felt they understood the reasoning behind leadership decisions were 3.7 times more likely to be engaged and 3.6 times more likely to agree that their organization supports an inclusive environment where individual differences are valued and respected. Employees who felt their organizations’ transparency around HR functions was actively being implemented were 1.4 times more likely to rate their HR department as highly effective, as outlined in the firm’s 2022 HR Trends Report.

However, organizations need to exercise caution and determine which level of transparency is most suitable for them while responding to employee and external demands. The new McLean & Company industry research will help organizations address the call for transparency in a way that makes sense for both the business and its employees, highlighting five critical criteria that must be considered when evaluating transparency readiness:

1. A Healthy Work Culture 
   
   A healthy work environment is crucial for transparency efforts to be successful and will provide psychological safety, collaboration, and aligned organizational values. People leaders should model the appropriate behaviors for employees and be equipped with the tools and training they need to be comfortable having difficult conversations.
   
   
2. A Strong Communications Plan 
   
   Communications can make or break efforts to improve transparency. Before increasing transparency, organizations must create a strong communications foundation with infrastructure in place to support it. Frequent communication will also play a vital role in sustaining transparency levels.
   
   

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1. Accurate Information and Stakeholders Willing to Share 
   
   Stakeholders who are open to sharing accurate information are vital to transparency. Organizations must provide enough clarity and information to tell the full story. Those who control access to information, such as CEOs, executives, senior leaders, or managers, must be fully onboard with the idea of increased transparency.
   
   
2. A Suitable Timeline for Sharing Information
   
   Organizations must choose an appropriate timeline for increasing transparency, either deciding to be transparent about the current state and then implementing changes or improving the current state of transparency before sharing. With either option, transparency must be followed by action.
   
   
3. Effective Change Management Initiatives
   
   Change management initiatives are essential to support transparency. It takes time and effort to adjust to greater levels of transparency, making it a long-term process requiring consistent monitoring and enforcement. Organizations should also have change management processes in place before increasing transparency.

For HR leaders considering whether increased organizational transparency is the right fit for their organization, The Rise of Organizational Transparency is available to assist in assessing organizational readiness.

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