The Benefits and Risks of HR Transparency

In today’s workplace, transparency is a priority and few departments feel the pressure more than HR.  Internal stakeholders, external stakeholders and even the government demand transparency in literally every aspect of recruiting, hiring, and retention.  While transparency sounds like a beneficial idea in theory, are there potential downsides to sharing so much information?


The Benefits of Transparency

The demand for more transparency has led to some very positive outcomes for employers and employees, including:

  • Accountability – Engagement is fueled by accountability. Employees want to work for leaders who hold themselves to the same expectations they hold the workforce.
  • Efficiency – Transparency makes it easier to identify and deal with poor performance in the workplace, giving employers greater control over cultivating a high-performing team.
  • Reputation – All a potential employee has to do is Google a company name to see what past employees have to say. Transparency creates a strong reputation in both the product/service market and the employment market.


The Downside of Transparency

It is rare to discuss the negative impact of greater transparency, since demand for greater transparency has ostensibly been driven by the public’s demand for corporate responsibility. How does one argue against responsibility? However, there are some scientifically-based points to consider.


Researchers from the University of Nottingham, VU University Amsterdam and Erasmus University Rotterdam conducted an experiment the impact of transparency on decision making. They simulated the game show “Deal or No” deal among two groups. One played with a host, in front cameras and a full audience. The other group played in a lab on a computer, alone.  They found that the group who played in front of the audience (an environment demanding transparency) was far more afraid of losing than the lab group, and the public players were more likely to play it safe on their wagers.  A transparent workplace can lead to overly-cautious employees, which doesn’t sound like a drawback, but in industries where innovation is critical, caution can be a death knell for an organization.


Transparency can also be a distraction. Employers who share a great deal of information about their business run the risk of increasing stress on employees who now constantly worry about how their job will impact organizational success. Moreover, sharing every struggle the business faces creates uncertainty where it does not need to exist. Transparency is important, but it is possible to share too much information. As with anything, there exists a tipping point where the benefits can be outweighed by the drawbacks.


Organizations with policies on transparency should consider every angle before assuming that 100% transparency is best. In some cases, it may be. Other workforces may not be able to handle a world of “too much” information.


If your HR team is ready to tackle transparency, of if you are looking to staff your HR department with top talent who can work successfully within your existing framework, contact the professional recruiters at Contemporary Staffing Solutions today. We can help you build an efficient, effective human resources team.