Accepting a new job or hiring a new employee is always something of a gamble. Will the worker and the company be a good match, or will they need to do the job search and hiring process all over again?
As companies compete for skilled talent, they're finding that openness increases the odds of drawing and keeping the people they want. According to a recent survey by job site Glassdoor, 92% of job hunters say they're more likely to apply for positions at a company with a policy of "transparency." To that end, the site has launched OpenCompany, a new program certifying employers that meet Glassdoor's criteria in a bid to better appeal to job seekers.
A clear definition of 'transparency'
Transparency is a popular buzzword in government and business, and the term covers a lot of ground. In the Open Company program, Glassdoor defines a transparent company as one that lays its cards on the table for job seekers and current employees by publicly spelling out its hiring practices, culture, salaries, and perks. Transparent companies also use social media to solicit and respond to feedback from customers and employees.
Showing all those cards, so to speak, may seem like a risk to operators who are used to doing things the traditional way, with company policies spelled out for insiders only and salary discussions outside the boss' office a big no-no for employees.
Transparency may also seem like a lot of work, especially the social media aspect. But it turns out there are compelling benefits to corporate transparency -- not the least of which is that the current generation of mid-career workers expect it and seek out employers that provide it.
More than 150 enterprises, including Hyatt, United, and Dell, have already qualified for Open Company, and more are expected to sign on soon. Glassdoor's program requirements include keeping company information current and responding to anonymous reviews by employees. Kim Abreu, Glassdoor's head of B2B public relations, describes Open Company as a form of "higher-level branding" for companies seeking the most qualified talent.
Making better matches
Considering that 61% of employees surveyed said they'd experienced buyer's remorse after starting a new job, transparency seems like the obvious way to cut down on mismatches and reduce turnover. Openness and responsiveness are especially prioritized by women and by workers in the 34-44 demographic who are typically right in the middle of their careers.
The benefits for job seekers are clear: a better picture of what they're getting into if they sign on with a company, including salary ranges, workers' opinions of management, current employees' expectations for the company's performance in the months ahead, and management's responsiveness to internal feedback.
A new definition of brand management
As for the social media tasks that come along with building an open employer brand, Abreu points out that talks outside the workplace about salary and culture "have always happened on some scale. It used to be discussed among friends over dinner or drinks." Internet culture, she said, has just amplified and spread information that's always existed.
With new information channels come new expectations of management and executives. Employees now expect company executives to respond to their feedback, whether it's given internally or posted on the Internet. In fact, Abreu said, 76% of surveyed workers said responses from the CEO or other executives carry the most value in terms of job retention and employee satisfaction.
Cindy Cloud, senior manager of global talent attraction and recruitment marketing at Informatica (NASDAQ:INFA), says companies who want to catch and keep the most sought-after employees will be the ones who take part in the social-media conversation without attempting to strictly run it. "Old-school branding was a lot of control," Cloud said. Social media discussions of a company "are something you don't have to manage. I focus mostly on relationships, and the brand takes care of itself."
Social media metrics
Informatica's managers and executives share the company's Glassdoor rating at board meetings and all-hands employee meetings, Cloud said. They also get feedback in real time through RSS feeds that allow them to keep tabs on anonymous employee sentiment and to respond immediately when needed. Abreu describes that kind of high-level public feedback to employee concerns as a force multiplier that demonstrates a company's receptiveness to worker input and makes it more attractive to potential hires.
Cloud said that Informatica's transparency practices and relationship-focused social media policy have helped the company recruit the right talent, especially in sales, over four years of rapid growth. She said that about two-thirds of each group of new hires say they checked out Informatica on Glassdoor before signing on. Given that level of social-media "previewing" by new hires, social media transparency is a smart way for her company to meet hiring goals and demonstrate authenticity. "We get to showcase our culture," she said.
As more major employers embrace transparency, and more skilled workers come to base their job searches on it, openness may become the job-search and recruitment standard. Until then, programs like Open Company and the smart use of social media are shifting the odds in favor of better matches between savvy workers and the employers who want to hire them.
More from The Motley Fool: Warren Buffett Tells You How to Turn $40 into $10 Million
Casey Kelly-Barton has no position in any stocks mentioned. The Motley Fool recommends Hyatt Hotels and Informatica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.