Should you share business financials with staff?
By Adam Blanch
Sharing business financials with staff can create greater commitment, or it can create anxiety, resentment and disengagement.
Sharing the books with employees can go one of two ways. Either it creates greater 'buy in' from your staff and commitment to the business, or it creates anxiety, resentment and disengagement. In order to make the best decision, we need to put ourselves in our employees' shoes and consider a few things.
1. How is the business faring?
When the business is going well, sharing the books may give staff the opportunity to feel pride in their work and to feel that they are stable in their job, which increases confidence. However, if they do not feel that they are adequately rewarded for their work, all they are going to see is the business owner making big profits while they struggle. If you are going to share the good news, you may need to be willing to renegotiate your staff remuneration, perhaps in the form of a bonus system.
When business is poor, sharing this may create uncertainty and a decrease in confidence, even prompting employees to start looking elsewhere for work. On the other hand, if you also present a recovery plan and ask your employees for ideas on how to turn it around, it can help to engage them and improve creativity, effort and productivity. The ultimate consideration should be whether your staff end up feeling empowered or burdened by a problem they cannot solve.
2. What should you share?
Financials: If you are going to share the financials, keep it to a minimum - half a dozen slides with the key metrics in easy-to-understand language and an explanation of what each one means for the business and its employees. If you overwhelm the staff with facts and figures, it will most likely diminish their confidence in your leadership.
Strategy: Sharing the key strategy for business growth and budget projections can be empowering if they are positive. It gives the team a focus and a sense of their part in the bigger picture. Again, being open to suggestions from your employees can make this a really useful exercise.
Sharing your financials with employees can go a long way towards building a sense of family. By showing your commitment to them you can increase their commitment to the business, but it needs to be done in a considered and confident way that involves and engages them.
To share or not to share? Perhaps consider gauging the thoughts of your longest-serving employees first and take a poll.