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6 Ways to Promote Transparency in a Startup (and Why You Should)

By: Wagepoint


Ways to Promote Transparency in a Startup

Transparency in the workplace is both a mantra and a model.

While it’s true that transparency has become a bit of a buzzword, when actually put into practice it can have a real impact on your business’s bottom line.

Namely better communication, ideation, engagement, and loyalty.

We’re talking about real transparency here—not just being open with your employees about the good things happening for your business, but also with salaries, company-wide financials, important (and negative) news, and just about everything else.

The startups of today are in a unique position to build themselves out as transparent organizations.

Changing attitudes about the practice of openness—along with improvements in communication and workflow technology—means creating transparent systems is easier than ever, and thus, expected.

In fact, in this post-Glassdoor era, new businesses should understand that their company culture, decisions, and even salaries and financials may be exposed whether they like it or not.

That being said, it’s important to get ahead of what others might say about you so you can instead say it yourself.

Perhaps as a new business owner, you’re not convinced that sharing everything about your company—even with your employees—is in your best interest. Transparent pricing is one thing, but transparent financials or salaries?

That seems risky.

But here’s why you’re better off working to be open rather than attempting to keep things quiet:

Your employees will be happier, more engaged, and more productive

If you’re a good leader, you want your employees to be happy. And to make your employees happy, there’s some necessary transparency involved.

According to TinyPulse, management transparency was the factor most closely associated with employee happiness.

So, remember that despite the form of transparency you’re choosing to implement, the end result is almost always an increase in employee happiness, trust, and engagement.

And when employees are engaged, they’re also more productive. Organizations with high-level engagement report 22% more productivity, as well as lower absenteeism, turnover, safety incidents, and quality incidents.

Transparency—and the resulting goodwill and good moods it engenders—is good for the bottom line.

Transparency is now expected

In our personal lives, we are increasingly transparent.

We share our lives on social media, track the interest and activities of others using those same platforms, express opinions to and engage with strangers across the glove—all in real time. Individuals have greater power than ever to express themselves, and in turn expect others—including organizations—to do the same.

As a result, younger workers in particular expect companies to “act transparently with information,” even more so now than when Deloitte first detailed the rise of “the naked organization” in 2015.

And this goes for startups, too.

The expectation these days is that companies are upfront about their practices and culture. Those that aren’t may find it harder to acquire and retain talent.

If you aren’t transparent, others will force you to be

Organizations no longer have the power to obscure what information they don’t want public.

As mentioned above, in the era of Glassdoor, LinkedIn, and Facebook, company decisions are often made publicly and both customers and potential future employees alike will dissect those choices.

In short, your culture will be visible whether you like it or not. It’s up to you whether you want to be part of that conversation.

Understanding the importance of transparency is the first step, but the second is recognizing that transparency is a continuous goal and not a finish line. You can always strive to be better.

So with that in mind, let’s go over six ways you can promote transparency in your startup:

1. Disclose company financials

Company financials have long felt like sacred ground that only upper management should be privy to. But there’s a good argument to be made that keeping everyone in the loop will actually increase performance.

Some managers think that sharing financials will worry employees and make them more likely to leave if numbers aren’t great. But in reality, you’re giving employees an honest view of the business that helps them understand the ramifications of their role within the company.

They’ll see that if they work more productively or more creatively, they have an opportunity to move the needle in a tangible way.

As you share financials, make sure you also educate your employees as to what they’re seeing. Not everyone understands cash flow vs. profit for example, and making those distinctions and explaining context is important for getting the full story.

2. Release employee salaries

Another form of financial openness is salary transparency.

When done correctly, disclosing salaries – and putting the information in context—can make people more collaborative and productive, as well as eliminate questions of gender pay gaps and bias. And if those gaps exist, salary transparency helps companies better address them by making them known.

It’s especially easy to incorporate this practice into the recruitment process. Sites like Glassdoor and Indeed allow you to post open positions with the expected salary details, which means you’re open with future employees from the very start.

If releasing actual salaries is too much for you, consider making the salary bands public instead. This way, job candidates know a realistic range they can expect, and current employees know where they stand based on their history with the company without knowing exactly what their coworkers are making.

3. Flatten the hierarchy

Some companies have a completely flat organization with no managers.

If you’re a startup, this is likely how you’ve been operating for a while—due to smaller numbers, it’s almost expected that your employees wear an assortment of different hats.

And though a flat structure that loosens boundaries between roles and teams has mixed results, keeping it intact can help boost transparency. It becomes necessary to share information and discuss decisions if you don’t have a separated management tier that keeps to themselves.

But if you’re not ready to go completely flat, look to just flatten out a little more.

You don’t need to create a perfectly equal boundary across your business, but as you grow, think about how each employee fits into the structure before assigning management titles.

4. Host town hall-style meetings

Public officials are kept accountable by their constituents when they show up to town hall meetings to field questions and comments. You can do the same at your business.

Make yourself available to answer any questions your employees might have about how the company is doing and what the future plans are. This kind of frank, open discussion encourages participation and helps employees feel heard.

5. Be upfront about bad news

If there’s a rumor going around the office that can negatively affect company morale, don’t let it fester.

Unless addressing a problem involves divulging someone’s private information, don’t be afraid to call an impromptu meeting or send out a company-wide email detailing the problem and what you’re doing to fix it and ensure it doesn’t happen again.

Leaving things unsaid only creates uncertainty and distrust.

6. Invest in socialization

Creating an engaged workplace culture through team-building activities like parties, happy hours, field trips, and robust social spaces throughout the office—a well-stocked kitchen, for example—can also improve transparency.

A team that feels invested in one another’s success will be less likely to wall off their colleagues from important decisions that may affect performance. It also improves employee wellness and increases overall loyalty to the organization.

The future is transparent

Transparent organizations demonstrate that they are invested in their employees, and expect their employees to be invested in them, too.

That kind of reciprocal relationship can only happen in an organization that’s open and on the same page, and that kind of transparency takes effort to build.

Don’t fear transparency—it’s the way of the future. Lean into it and see what it can do for you.

The advice we share on our blog is intended to be informational. It does not replace the expertise of accredited business professionals.

Author: Meredith Wood is Editor-in-Chief at Fundera, an online marketplace for small business loans. Specializing in financial advice for small business owners, Meredith is a current and past contributor to Yahoo!, Amex OPEN Forum, Fox Business, and more.

Published: December 19, 2018

Source: Wagepoint

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Wagepoint is simple, fast, and friendly payroll software, built just for small businesses across North America. Everything a small business owner or startup founder needs to manage and run payroll is included in one simple plan. Follow Wagepoint on Twitter @Wagepoint.

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