Talking about money with friends, colleagues, family, or any other relationship that exists is usually topic that is avoided. When running a business, this trend also seems to remain true. Businesses are often reserved when it comes to sharing the company financials with its employees for a variety of fear-based reasons. While every business has the choice of who they share what numbers with, the businesses that choose to share with employees can navigate this hard-to-discuss topic with clear direction. In this post we will review the 5 correct ways your business can maintain financial transparency with your employees. Let’s take a look!
Share the Information on a Consistent Basis: Good and Bad
While good news is much easier to share, if you are committing to sharing the financial status of your company’s transactions with your employees, you should embrace sharing the information on a consistent basis, whether the numbers are good or bad. Sharing on a set schedule demonstrates that the company will remain transparent, regardless of the color the company is heading into. Good, bad, or indifferent, remaining on a set quarterly, monthly, or even weekly sharing basis will help with the commitment to being transparent with your employees.
Explain the Numbers: Help Employees Understand the Breakdown
Graphs, projections, charts, oh my. Sharing the financial status with employees is more than just arrows up or down. Sharing takes explaining what it all means. When reviewing financials, help employees understand the numbers they are seeing. Are the projections on track for making the growth expected? Does the company see their value in those numbers? Do you even know what the numbers mean? Sharing and explaining what each dollar in and dollar out means for the company can demonstrate the value of your employees in every transaction.
Review Tough Questions Ahead of Time
Make sure you’re ready to answer the tough questions that your employees may ask. Consider what the employee may see when the numbers come through and be prepared to explain what the company is doing, thinking, or considering when they see the same numbers. Reviewing some potential questions in advance of the numbers will help navigate a potential onslaught of “what does this mean?” question session.
Share in Person
Timing is everything. Companies usually have the time they share news to the team down to a day and time of the week. That usually is paired with a nicely worded email, newsletter, or some form of typed-out document. When it comes to sharing the fiscal information, companies should consider doing this in person when possible. Sharing in person can help reduce office chatter about what the numbers “really mean”, or reduce the misunderstanding of one “0” in the fancy pie chart. Sharing in person allows allows real questions in real time. If a company can find a way to share and provide a follow-up meeting or offer in person reviews, it will ensure staff morale stays high around the company’s financial transparency and communication with its employees.
Demonstrate the Employee Connection in Financial Goals and Reviews
People work harder when they see their value in the end product. Highlight the employee’s contribution to the numbers they see. By demonstrating the connection each employee has to every dollar, they will be encouraged to take ownership of that dollar. By highlighting where an employee fits in the grand scheme, it will help define purpose, passion, and projections to shoot for. The employee paycheck should not be the only financial connection they see to a company.
By sharing and remaining transparent with your company’s financial statements, employees can find increased value and connection to the company that they work hard for. By following these five ways to maintain your business’s financial transparency, employers can reduce the fear that goes into sharing their finances with others. While these methods may not make dinner party discussion about how much or how little one makes easier, it can help the employee, company, and its operating managers feel better prepared to use the company numbers to their advantage.