Should Businesses Be Transparent About Employee Compensation?

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.

Advertising and marketing executives were asked, “Does your agency or firm have an open salary policy?” Their responses:

Yes	11%
No	82%
Don’t know/no answer	8%
	101%*
*Responses do not total 100 percent due to rounding.

Advertising and marketing executives were also asked, “What is the greatest benefit of instituting an open salary policy?” Their responses:

Increases productivity	18%
Boosts recruitment and retention	17%
Helps close the wage gap	16%
Creates an atmosphere of trust	15%
None — the potential consequences outweigh any benefits	27%
Don’t know/no answer	7%
	100%

“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.”

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.

For information on the latest compensation and hiring trends for creative and marketing professionals, visit:

The Creative Group Salary Center
The Creative Group Blog, which features an overview of jobs in demand and tips for negotiating salaries

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