Robert Half Management Resources states that less than a quarter of privately owned companies provide regular financial updates to all of their employees, and it recommends organizations consider more openness about performance with workers.
Public company employees are told every quarter how their organization is faring, but 76% of the private firm chief financial officers asked by Robert Half Management Resources say they don’t regularly give wage earners a look at the balance sheet. Seventeen percent say they share financial information with select employees and only 7% share it with all.
“Private companies are not obligated to publicly issue financial results, but providing at least some indication to employees of how the organization is faring could ease any uncertainties that may exist,” says Paul McDonald, a senior executive director with Robert Half. “Financial data is sensitive and complex, but choosing a few basic metrics to share can help staff develop a better understanding of the business and the challenges it faces, and build stronger team focus.”
More than 1,300 CFOs from private U.S. companies with 20 or more employees were asked about their disclosure practices. Comparisons over morale or loyalty were not made, but McDonald and Robert Half recommend the advantages of an informed staff.
“Organizations that are proactive in offering insight on what is driving performance are more likely to create stronger staff engagement,” McDonald said. “The more employees at all levels understand how their roles fit into the big picture, the more invested they’ll be in their work.”
Robert Half recommends these guidelines for giving workers insight on business performance:
- Provide context. Give employees perspective and show them how their daily work contributes to companywide growth.
- Don’t withhold bad news. Employees left ignorant could draw inaccurate conclusions, and poor performance can be used to rally a turnaround.
- Foster an ownership mentality. Encourage staff input and have workers adjust their priorities based on the company’s overall business situation.
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