Who’s afraid of

Bad mouthing by disgruntled employees writing bad reviews about their managers and employers.

Embracing transparency is not an option. It’s a necessity.

Today, Glassdoor operates sites under the company’s brand in 13 countries. In 2015, it received a $70 million investment by Google Capital, giving it a cool $1 billion valuation.

With its massive reach, companies quickly realized that online reviews about culture, compensation policies and interviewing tactics could cost them a competitive edge for securing new talent.

It’s a kind of phenomenon that happen when current and former employees post their thoughts about working at a specific company, and the employer finds that they’re soon scrambling to change policies in an effort to stay competitive in the war for talent.

Things that were once a secret are out in the open, and every detail can affect culture, employee engagement and retention, all top business challenges today. When there’s a problem now, people, especially Millennials, aren’t afraid to go to the head of HR and ask, “what are we going to do about this?” This has likely made a lot of managers cringe.

Now, it’s very rare that you come across a company that’s opposed in principle to what you do. The idea that you would collect what people think about their workplace and their leaders and make that public was really provocative and for people to brazenly share their salary for anyone on the internet to see was sort of unthinkable to HR leaders.

But the world has gotten more transparent.

Sure, today’s need for transparency helped spur Glassdoor’s growth, but the company’s popularity, along with social media platforms like Facebook, LinkedIn and Twitter gaining traction, have prompted many businesses to think about how unfiltered commentary can affect its brand. And hence, the question is no longer whether or not a company should be transparent, but rather, what actions should they take after information is made public.

It makes more sense for companies to embrace the findings, use the information to their advantage. Additionally, only 12 percent of companies listed on Glassdoor interact with candidates, even though it’s free to respond to reviews, add photos and write descriptions of their companies.

It could be that some companies reject Glassdoor and the transparency it offers because fear of the short-term downsides in talking openly about uncomfortable topics, like pay.                      A 2014 Bersin report on transparency titled “Transparent Succession Management: Building a Culture That Fosters Open Dialogue about Talent,” found that

Top barriers to transparency include a weak company culture that doesn’t have a well-defined set of processes in place to support the changes needed for a transparent workplace. Case in point: not having strong enough managers to give performance feedback, provide good coaching and conduct career discussions. Transparent Succession Management: Building a Culture That Fosters Open Dialogue about Talent, Bersin report 2014.

Leveling the playing field for employees

When Hohman, along with his two co-founders Tim Besse and Rich Barton, started Glassdoor, founded by Hohman and other two co-founders, to bring “more power to the people,” Hohman told Bersin Perspectives.

So often, jobseekers are kept in the dark throughout the interviewing process and the three co-founders wanted to help level the playing field for all parties involved, in much the same way they brought transparency to the travel industry with Expedia (all three were part of the founding team) and reshaped the real-estate industry with Zillow.

Hiring is a marketplace, a quirky marketplace because both sides of the marketplace–jobseekers and companies–were really ill informed about the other. Hohman. There wasn’t much transparency, and you come together in this hiring event to figure stuff out, but it’s a very short-time frame and you only have a couple of hours to figure out what’s the other person’s story. It’s just really inefficient.

Thanks to Glassdoor, candidates from anywhere in the world, working in any industry can draw on outside resources to determine how their offers stack up compared to their peers. Take for example tools like Glassdoor’s recently launched Know Your Worth which is described on the company’s blog as “patent-pending technology to calculate the estimated market value, or earning potential, of an individual, right now, based on characteristics of her/his current job, work experience and the local job market.

This kind of data helps make it easier for candidates to see where they stand relative to the market, so they can have a better idea of what they should be asking for. The more people using the tool, the more accurate its real-time market trends.

In short, the Glassdoor effect hasn’t just changed companies; it’s also changed jobseekers. In the age of social proof, buying a new product, eating at a new restaurant and yes, even interviewing with a new company rarely happens without scouring the web to see what’s out there. Glassdoor has worked to help level the playing field for candidates, and as a result, jobseekers are now able to walk into an interview room and have a decent idea of company culture and how much money to ask for.

Being a transparent company takes a lot of work.

  1. Companies have the tough conversations
  2. Embrace talent mobility
  3. Be honest about policies that may not be completely fair at your own company
  4. Finding ways to fix that
  5. Taking action
  6. Coaching on the management team
  7. Established processes on making decisions

For instance, when a company makes a decision to pay an employee a certain amount, they should be clear on how they’ve come to that decision, and then they should communicate that effectively with the employee.

Glassdoor has made it so that companies are pushed toward transparency, because top talent tend to flock to brands they believe to be more authentic and they aren’t waiting on brands that are not to catch up.

Suresh Shah, Pathfinders Enterprise


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