Pros and Cons of Pay Transparency

June 2, 20178:31 am2048 views

Should professionals’ pay be public knowledge? Employers in the advertising and marketing fields don’t think so, according to new research from staffing firm The Creative Group. More than eight in 10 creative executives interviewed (82 percent) said their organization refrains from publicizing employees’ compensation. Of those respondents, 61 percent feel pay transparency would decrease staff morale.

Is there an upside to embracing an open salary policy? According to the survey, the top benefits of sharing compensation information openly are increasing productivity (18 percent) and boosting recruitment and retention (17 percent). However, more than one-quarter of executives (27 percent) believe the potential risks outweigh any rewards.

“Regardless of your company’s position on sharing salary information, offering competitive compensation is essential for attracting and retaining skilled creative professionals,” said Deborah Bottineau, senior regional manager of The Creative Group.

“Managers need to stay on top of hiring trends and salary benchmarks in their local markets to ensure they’re developing well rounded offers and keeping top talent satisfied with their pay, benefits and perks.”

See: Pay Transparency Findings: Employees Lack Understanding of Company’s Compensation Policy

Additional findings:

  • Open salary policies are most common at midsize companies (500 to 999 employees) and least common at large advertising agencies (100 or more employees).
  • More than half of marketing executives at midsize companies that don’t have open salary policies (51 percent) think pay transparency would increase staff morale. In contrast, more than seven in 10 advertising executives at large agencies (72 percent) feel it would have an adverse effect.
  • Advertising executives said the biggest benefit of an open salary policy is creating an atmosphere of trust, while marketing executives believe the greatest advantage is increasing employee productivity.

“No matter what your company’s salary policy is, benchmarking compensation and paying competitively are crucial in today’s candidate-driven market,” said Diane Domeyer, executive director of The Creative Group. “Talented professionals are always exploring their options, and managers need to stay on top of salary trends to ensure their employees are being paid fairly.”

The national study was developed by The Creative Group, conducted by an independent research firm. The findings are based on more than 400 telephone interviews — with approximately 200 marketing executives randomly selected from companies with 100 or more employees, and 200 advertising executives randomly selected from agencies with 20 or more employees.

Also read: What are the Pay Benchmarking Challenges Faced by Organisations Owing to Exchange Rate Fluctuation?

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