Let’s be clear: why is salary transparency important and does it actually help? We asked around

Around the globe, design studios are leading a dynamic shift towards more equitable conditions and open discussions about hiring practices. It’s a fascinating change, illuminating the inner workings of an industry that at times can feel shrouded in mystery. In numerous countries, disclosing a clear salary – be it a range or a fixed sum – is mandated by law. Yet, in many others, undisclosed salaries in the creative industries continue to be the norm.

The practice of salary cloaking, wherein job advertisements omit salary ranges, can inadvertently lead to less diversity in applicant pools. For one, it may dissuade potential applicants from modest socio-economic backgrounds from applying, who, in the face of the industry’s wage imbalances across classes, are seeking certainty that they will be remunerated fairly for their expertise. Additionally, salary cloaking may unwittingly fuel gender and racial wage disparities, as those affected may lack the bargaining prowess or insight to insist on just compensation. Ultimately, this lack of transparency leads to a lack of trust, casting doubts on the studio’s commitment to equity.

Nowadays, there is a significant push for clarity in all aspects of a job role’s description, and this trend is not only transforming how businesses function, but also reshaping team dynamics. It’s a conversation we’re here to have. So we have called upon the experiences and expertise of three studios across the world – XXIX, Forty Eight Point One and Blurr Bureau – to share their candid thoughts on this paradigm shift, answering these key questions – How are transparent salaries implemented? What has the reception been like? What are the benefits? Also, what kind of challenges have they faced in embracing this shift?

Each design studio has its own unique method to develop the salary ranges for roles. This approach is informed by a variety of factors, from the country’s industry rates to the studio’s available budget.

At XXIX – a mNYC-born and headquartered design and technology studio that is part of the garden3d.net family – salary transparency is implemented in a very unique way. Employees set their own salaries using a deterministic process for self-advocacy known as the Skill Tree. Co-founder Jacob Heftmann, Creative Director James Musgrave and garden3D’s Head of Communications Elie Andersen explain that salaries are pre-determined by skill level (which they unpack in greater detail, on their garden3D Substack.)

They summarise that “each skill level (junior, mid-level, senior, lead, etc) corresponds to a specific salary band, so team members know exactly where their salary number came from, without an opaque and potentially biased salary-setting negotiation.” The team is encouraged to take a Skill Tree review whenever they feel their skill sets have advanced, so self-improvement and growth are direct functions of the process. “We provide our team with tools to become the drivers of their own success, which promotes empowerment and self-actualisation,” they add.

As passionate advocates for wider salary transparency across the industry, New York and Melbourne-based global design and venture bureau Blurr Bureau enthusiastically maintains a transparent approach in how they develop appropriate salaries for each position. According to founder Jessica Dimcevski, “crafting a job role and salary range encompasses considering everything necessary to deliver great outcomes for the individual, the company and the clients they partner with.” Experience is a crucial factor. However, the process is detailed – it’s important to remember that those who are just starting their careers can also bring impressive technical skills and fresh, creative perspectives to the table. At the same time, real-world experience brings with it a deeper understanding of industry nuances, client interactions, critical know-how, and the art of internal communication. These are the ‘soft skills’ that we hone over time. Dimcevski’s other considerations include the level of responsibility one would take up within the business, and their technical expertise, specialised skill sets, and location. “The location of a role needs to account for all the fun stuff like taxes, cost of living and employee benefits,” she adds.

Crafting a salary range encompasses everything necessary to deliver great outcomes for the individual.

Amid these evolving approaches to compensation, many studios have witnessed the tangible benefits of implementing transparent salary policies. For example, the decision of London creative agency Forty Eight Point One to implement transparency in their salaries in recent years was rooted in three main factors – clarity, empowerment, and fairness. While, in the face of economic and day-to-day pressures, the process hasn’t always been easy, Co-founder Jack Carey believes that total salary transparency across the business has been “an incredibly positive change” for the studio. “It’s seen salary-based conversations move towards greater clarity and has led to a far clearer understanding of what to expect and why,” he explains. Employees are also aware that their salary directly reflects not only the industry benchmarks but also how well the agency is doing, and that’s something they can have a real impact on. “I’d like to think bringing everybody closer to the performance of the business is empowering for our team,” he adds.

Likewise, Dimcevski suggests that having salary transparency not only helps to manage expectations (“there is a real benchmark in place that can be compared and measured against industry averages”) but also sets a foundation of respect and clear communication – everybody is on the same page. “Being honest about budget allocation for salaries sets a respectful tone for expectations,” she says, “it allows the employee to have autonomy over their decisions of what is ultimately the most important to them in terms of compensation and their career growth.”

Across the pond over at XXIX, having communicated their financial transparency, the New York team agree that this clarity has only strengthened their team. “We think that making our company as transparent as possible gives our team members a clear sense of direction, fosters solidarity and support that helps build a culture of trust, and attracts candidates that are highly value-aligned,” they explain.

While transparency can indeed foster a sense of solidarity and trust, it also brings its own set of challenges. The journey to achieving full transparency, particularly in terms of salaries, is not always straightforward and can lead to confusion from miscommunication or inadvertently highlight disparities.

Carey shares their experience of posting a position that straddled junior and midweight levels. “The offered salary hit the very top of the average junior salary, but a fair chunk less than the bottom-end of an average midweight role,” he recalls. “Whilst the job description advertised for a junior looking to step up to a midweight role, the job title of Midweight Designer at the salary advertised naturally caused some backlash.” Carey learned two valuable lessons from this experience. Firstly, the studio acknowledged that they got the job title wrong, and for most applicants, the headline is everything. But more crucially, Carey realised that salary transparency doesn’t mean you’re immune to criticism. “That’s good, healthy and incredibly important,” he notes. “What transparency should never act as is a green-washed shield against poor practice, standards or ethics.” After all, it’d be a bit amiss for us to pretend salary transparency – both in job listings and across the studio – is the golden cure to equality and fairness across the studio.

We’ve seen that better culture is ultimately more important to candidates than a salary number.

“Our team elected to make skill levels, and therefore salaries, transparent as a DEI initiative, and doing so revealed areas of bias – specifically around which team members held higher skill levels than others,” XXIX reveals. This transparency created an avenue for open discussions and led the team to become more confident in advocating for themselves. “We’ve seen that better culture is ultimately more important to candidates than a salary number.”

Like XXIX, many studios are committing to broader transparency within their organisations that extends to all aspects of the business and is seen as a crucial factor in fostering a healthy, inclusive, and equitable work environment. As a team led by their internal values, Forty Eight Point One has learned not to try too hard to inauthentically ‘people please’ in their job descriptions and instead stick to their guns with what they believe in. “Transparency across the business is not easy to implement, but it is an ideology that intuitively feels right and is something that we’re always looking to improve,” says Carey. “We believe our team really benefits from it, and as founders, it’s a far more liberating way to run a business where there is freedom from all sides to be open and honest, and to answer or ask anything.”

Dimcevski concurs, adding that financial transparency needs to start at the very top and funnel down throughout the organisation – everyone, including the founders, should be on the same page when it comes to salaries.

After a challenging period for Forty Eight Point One, during which painful layoffs were made – “making redundancies was a brutal reality that, like many other businesses, we had to face recently” – it kick-started hyper-transparency of the studio finances. “Team members asked us fair and important questions out of concern for both their colleagues and themselves,” says Carey, which he reveals forced the leadership team to open up candidly about the performance of the business and communicate the reality. At the time, the sudden financial transparency was not easy for anyone. But, thankfully, the response from the team was overwhelming. “You suddenly realise how much people care,” he says, “and it’s created a feeling of ownership, accountability and togetherness within the studio that simply wouldn’t exist without those conversations happening.”

This comprehensive transparency and level of openness has been identified as a key contributing factor to high employee retention rates, particularly in the design industry. For example, XXIX and their sister studio Sanctuary Computer reveal that they have an extremely high retention rate thanks to their unique model, and it’s something to be proud of. “When people don’t have to guess at why they earn what they earn,” they say, “it reduces the amount of uncertainty in their jobs and enables them to focus on why they came to our studio in the first place – to make great design.” Salary transparency also goes hand-in-hand with profit sharing at XXIX, so the team’s hard work pays off with supplemental income (typically $400–$500 per month of employment, capped at four years) each year. “We’re open about the fact we can’t compete with compensation packages from big tech firms,” they reveal, “but our team knows that if the company is doing well, they’ll personally benefit from that success too.”

When complemented with other transparent functions of their business, like the process in which team members democratically propose and elect company policies, XXIX is able to shape a workplace people want to stay at for a long time. “Ultimately,” they say, “our goal is to create the best place to be a designer.”

According to Dimcevski, high employee retention is not only about competitive salaries. It’s crucial to consider whether the salary offered actually aligns with the realities of the job. Does the advertised ‘dream role’ correspond with the lifestyle this position might entail? “I think the industry needs to be having bigger conversations about how to retain talent beyond the numbers, looking at the pros and cons taken on by the employee as a part of a salary,” she says. For instance, employees could benefit from opportunities for further education, career growth, and community involvement. However, they may also face challenges such as poor work-life balance, stress, and creative burnout. Open conversations about these factors contribute to a clear understanding of the role and ultimately, higher employee retention.

So if being transparent about salaries can have such a positive and deep impact, why is it that some studios are hesitant to reveal the numbers within the specifications of job listings? And what changes need to occur within the industry to encourage more transparency? In certain cases, “there’ll be some who are looking to secure a low-ball offer,” responds Carey, but having extensive experience in hiring employees, he also believes that many decisions to omit a salary are rooted in genuine intentions to cast the net wide, in the knowledge that finding the right fit can influence the salary. “That person may come with limited experience but be identified as a talent to nurture and an ideal culture fit. So a lower salary feels right,” he says. “Others may be the complete package and so the agency is willing to stretch further than originally budgeted.”

Clarity up front protects against a messy process.

So what do you do? A vague, full bracket range could draw criticism for being too broad. However, a narrow range may put off potential candidates. Having tried both approaches, Carey suggests that a similar logic applies to an agency’s desire to understand a client’s budget for a project. It allows for a decision to be made by the relevant party. Are they willing to lower their pay expectations for the right opportunity? Do they back themselves to convince the client to pay more if they knock it out of the park? “Clarity up front protects against a messy process,” he emphasises. “And any message you put out there is also a message to your team. Hiding the salary does not protect you from doubts, suspicions or questions being asked internally. Quite the opposite. But showing it can help.”

The conversation around salary transparency is, quite clearly, very nuanced. However, the impact it can have in fostering more honest and open conversations, especially within teams, is apparent. One thing is for sure – like many other things within the creative industry, salary cloaking is being challenged and questioned more than ever before. As XXIX so succinctly put it, “obscuring information is an age-old tactic for hoarding power!” As the design world continues to evolve and we make more space for clarity, the shift towards transparency seems poised to play a significant role in shaping the industry’s future.