Employees today are more likely than ever to demand transparency about compensation practices at their organization. Total rewards leaders agree that pay transparency would benefit the organization in numerous ways. Yet even though everyone seems to be on board, organizations are slower to adopt this practice than you might expect. In our latest research at Gartner, 60 percent of the organizations we surveyed said they had not yet acted on pay transparency at all, while only 14 percent had fully realized it.
So why aren’t we making faster progress toward an outcome all stakeholders agree is the right thing to do? In a session at Gartner’s ReimagineHR event in London last Thursday, Advisory Leader Ania Krasniewska armed the total rewards leaders in attendance with strategies for surmounting obstacles to pay transparency and getting senior leaders and line managers at their organizations on board. Here are some of the most common reasons why organizations shy away from pay transparency, along with some counterarguments HR leaders can use to win over a skeptical CEO:
“It’s just a trend.”
The pressure organizations are facing today to be more transparent about their compensation practices comes from several directions: Millennial employees expect more transparency than previous generations did, employees have more access to (often inaccurate) pay information from outside sources like Glassdoor or PayScale, and governments and the media are advocating transparency as a means of driving pay equity. For an executive wary of pay transparency, it may be tempting to reason that these trends will eventually pass, but there is good reason to believe otherwise.
While Millennials and Gen Z are the employee cohorts most commonly associated with demands for pay transparency, they’re not the only employees who want it. Like other Millennial-driven trends in the workplace today, the younger generation of employees is simply more vocal in demanding things that in fact, employees of all ages would like. Their attitudes also influence their parents, neighbors, and older colleagues. Millennials aren’t the only ones using Glassdoor: Many of the employees who use these external sources to compare their salaries with those of their peers are in senior positions at their organizations. Furthermore, Millennials aren’t going away; they are already the largest segment of the workforce and Gen Z will eventually be even bigger. Gambling that these generations will stop caring about pay transparency later on is a very risky bet.
New research from Glassdoor examines the job openings at major employers in the US tech sector to find out what roles these companies are hiring for. While tech companies have demonstrated an insatiable demand for digital-specific talent like software engineers, data scientists, and experts in AI and machine learning, they also require the same diverse set of skills and functions as other large, complex organizations. Accordingly, Glassdoor finds, 43 percent of open positions at tech companies are non-tech roles, accounting for almost 53,000 jobs. The ratio of tech to non-tech hiring varies widely, however, from one company to another:
Overall, Intel, Microsoft and Walmart eCommerce were hiring the highest percent of tech roles compared to non-tech roles, with 78 percent of their open roles being tech roles. Another tech company hiring predominantly tech workers was Amazon, with 72 percent of the roles on Glassdoor being categorized as tech roles. Despite having a large network of warehouse and logistics operations, tech giant Amazon is still mostly a tech employer.
On the opposite end of the spectrum, only 28 percent of Workday’s open roles were tech-related, with 72 percent being for more traditional non-tech jobs. The majority of job postings at IBM, Salesforce and Verizon were also for non-tech roles. Among Salesforce’s open roles, 41 percent were tech roles while 59 percent were non-tech roles. Similarly, Verizon had about 45 percent tech roles and IBM had 46 percent tech roles open out of their total openings.
The most common non-tech jobs advertised at these companies are account executives and project managers, along with a variety of sales, marketing, and management positions, but the tech sector is also hiring for a wide variety of other roles. Overall, Glassdoor found, most salaries for non-tech jobs range from $50,000-$90,000 per year, compared to $80,000-$120,000 for most tech roles.
Ever since Recruit Holdings, the Japanese HR conglomerate that owns Indeed, announced last month that it was acquiring Glassdoor, speculation has run rampant that the parent company would inevitably combine the two properties into an even larger online recruiting behemoth, perhaps as a defensive move against Google’s new job search feature. Matt Charney at Recruiting Daily, in his massive, four part “Requiem for Glassdoor,” concludes that even with their powers combined, Indeed and Glassdoor have no hope of competing with the search engine where 80 percent of job searches begin. With so much control over the front end of the funnel, Google has the power to render its competitors in the job search aggregation market virtually invisible to most users. No matter how much traffic Indeed buys, Charney reasons, “that traffic will ultimately be controlled (and priced) by … Google.”
Still, other observers see the Glassdoor acquisition through a different lens, viewing the site’s impact not so much in terms of volume but rather in how it has mainstreamed transparency and accountability on the part of employers in their interactions with candidates. That’s how the Washington Post’s Jena McGregor described it in her column after the news of the acquisition broke:
Analysts say the $1.2 billion pricetag for Glassdoor reflects a company that sits at the nexus of a number of trends: A tight labor market where many workers have their pick of jobs and employers have to work harder to attract them. A growing demand by recruiters and H.R. departments in an era of big data to back up their decisions with metrics. And a technological and cultural zeitgeist where an appetite for transparency and accountability have only grown
These trends were illustrated in a report Indeed issued just a week after the announcement: How Radical Transparency Is Transforming Job Search and Talent Attraction, based on a survey of 500 US jobseekers, highlighted findings like these: 95 percent of candidates said insight into a prospective employer’s reputation would be somewhat or extremely important in their decision making. Among Millennials, 71 percent said transparency was extremely important, while 84 percent of Millennials aged 25 to 34 said they would automatically distrust a company on which they could find no information (even among Baby Boomers, 55 percent agreed that transparency was crucial). No reviews, Indeed found, are even more harmful to an employer’s reputation than bad reviews, since candidates are at least willing to consider an employer’s response to a bad review.
The growth of online pay information sources like Glassdoor is also a central theme in our upcoming work on pay transparency at CEB, now Gartner.
A recent survey by Glassdoor finds that very few employees in the UK are using all of their paid leave entitlement, while 40 percent of them are using less than half of it, Personnel Today’s Adam McCulloch observes:
The average figure of holiday taken by UK employees was 62%, while 91-100% of holiday entitlement was taken by 43%, the study found. A remarkable 13% reported only taking 20% of their allowance. The online survey carried out in April garnered responses from 2,000 full and part-time employed adults and also gauged the amount of work people said they did while taking time off. The results revealed that 23% of those on holiday regularly checked emails and 15% continued doing some work out of fear of being behind on their return and of missing targets.
Young workers were the least likely to take their full holiday entitlement, with only 35% of 18-24 year olds and 40% of 25-34 year olds taking all of their allowance. Half of employees (50%) said they could completely relax on holiday and that there was no expectation from their employers that they should be contactable. However, 20% reported that they were expected to be reachable and available to carry out some work if needed.
The underuse of vacation time may be a factor in the high levels of overwork and overload UK employees report, which cause stress and contribute to mental and physical health problems. Nearly one third of workers said in the latest edition of the CIPD’s UK Working Lives report that they suffered to some extent from “unmanageable” workloads, while 22 percent said they often felt “under excessive pressure,” another 22 percent said they felt “exhausted,” and 11 percent reported feeling “miserable” at work.
A recent study from Glassdoor uses the site’s job search data to track how many candidates are looking for jobs outside their home cities and figure out which of the 40 largest American metro areas are the biggest talent magnets. Using a sample of more than 668,000 online applications on Glassdoor during the week of January 8-14, 2018, the study looks at where Americans are looking to move for work, who is moving, and why, Glassdoor’s chief economist Andrew Chamberlain elaborates in his introduction to the report.
One key finding is that while the prospect of a higher salary might seem like the most likely reason for a candidate to skip town (our research at CEB, now Gartner, shows that salary is consistently the most powerful attractor of talent), Glassdoor finds that it’s not the strongest driver of these moves:
- Salary drives candidates to move. But the effect is small. An extra $10,000 higher base salary predicts candidates are about a half percentage point (0.41 percentage points) more likely to be a metro mover — a statistically significant, but small effect.
- Better company culture is more attractive. Having a 1-star higher overall Glassdoor rating predicts candidates will be 2.5 percentage points more likely to move metros for a job. That’s statistically significant, and roughly six times larger than the impact of offering $10,000 higher pay.
Metro movers tend to be younger, better educated, and earn higher pay than candidates who stay put. This makes sense, insofar as moving cities is expensive and more likely to be worth the trouble for a high-paying job. The most mobile jobs, Glassdoor’s study found, include chemical and industrial engineers, software developers, and data scientists (and of course, flight attendants). All of these jobs pay enough to be worth moving for, but also aren’t available everywhere: A software engineer in rural Idaho, for example, has a much better chance of getting a job if they are willing to move to a tech hub like the San Francisco Bay Area. By comparison, the least mobile job title—bartender—is available anywhere.
San Francisco is indeed the most common destination for metro movers, Glassdoor notes in a press release, along with New York:
In the latest of this year’s big waves in recruiting technology, the Japanese HR conglomerate Recruit Holdings has finalized a deal to acquire the recruiting, job review, and salary transparency site Glassdoor for $1.2 billion, GeekWire’s Taylor Soper reported on Tuesday night:
Glassdoor, founded in 2008, will remain a “distinct and separate part” of Recruit Holdings’ HR technology business segment. The Tokyo-based company has more than 45,000 employees; its last big acquisition was swooping up jobs site Indeed in 2012. The all-cash deal is subject to regulatory approval, expected this summer.
CEO Robert Hohman will continue to lead the company. The acquisition is in line with Glassdoor’s longstanding vision of becoming a world-leading recruiting platform, Soper notes, pointing to remarks co-founder Rich Barton made at a Zillow event in 2014:
“Our BHAG (Big Hairy Audacious Goal) for Glassdoor is to become the largest recruiting company in the world, to help everyone find a job and company they love, to become ‘TripAdvisor for employment,’” he said in 2014. ” … This is a revolution in the jobs industry. One day we will become the most important company, the most important marketplace, in recruiting.”
Recruit being the owner of Indeed (as well as SimplyHired, another major job search site), it is natural to speculate that it might combine these massive properties into an even larger online recruiting behemoth. Hisayuki Idekoba, Recruit’s chief operating officer, says there are no plans to integrate Glassdoor and Indeed, but they may partner on “specific challenges,” Bloomberg’s Alex Barinka adds.
Glassdoor has released its annual list of the best jobs in America for 2018, ranked based on earning potential, job satisfaction, and availability. For the third year running, data scientist took the top spot, while other data and technology roles dominated the list, such as DevOps engineer (#2), electrical engineer (#6), mobile developer (#8), and manufacturing engineer (#10). All in all, technical roles make up 20 out of the 50 best jobs. The rest of the list comprises a variety of management roles, as well as several jobs in the health care sector.
“But there are at least four new titles on the list that help crunch that data and make decisions based on what they suggest,” Washington Post columnist Jena McGregor points out:
These include strategy managers (No. 7), business development managers (No. 14), business intelligence developers (No. 42) and business analysts (No. 43), each of which make the list for the first time, said Scott Dobroski, a career trends analyst at Glassdoor.
“There’s always a lot of tech jobs and health-care jobs — that’s not new and not going away anytime soon,” Dobroski said. “But the biggest trend this year was this emerging theme of business operations,” he said, or people “who make sense of all that data and recommend business decisions.” Many of the people hired for these jobs, he said, are former consultants who companies are bringing in-house to help with strategic and market decision-making.
“Maybe the occupational therapist and the HR manager jobs are in there because those folks are needed to deal with anyone who is not already a data scientist?” GeekWire’s Kurt Schlosser quips.