In a recent blog, we shared our belief that offering employees glimpses of company financials can increase their trust – especially in financial climates like today’s, when worry about job security abounds. We received a surprising amount of feedback on this point, representing a variety of opinions. It prompted us to consider the topic further and share a few more reasons we encourage the practice.
But first, we want to clarify what we mean by “company financials.”
myHR Partner does not encourage businesses to share every last financial detail with people on their payroll, nor do we encourage disclosure on a sporadic basis (ie. only when outlooks are rosy). Rather, we encourage businesses to share, on a pre-determined and reoccurring basis, top-line financials and honest information agreed upon in advance by executives and owners. This information should be accompanied by a high degree of education to ensure it’s understood as intended.
Beyond what we’ve already shared, here are a few more reasons we support this practice.
Share company financials with employees because it’s in-step with transparency culture.
Fortune hit the nail on the head in a September 2022 story:
“In the recent past, leadership was typified by the smartest person in the room.” By contrast, “Today’s employees won’t follow someone until they know the leader is willing to put the needs of their people above their own self-interest.” 1
Workplaces everywhere are facing renewed calls for honesty, accessibility and morality among leadership, forcing executives to reconsider age-old habits like glossing over (or spinning) bad news and presenting falsely cheery personas. myHR Partner sees disclosing information about financials – especially when outlooks are less than ideal – as key to aligning with today’s workforce. After all, as Entrepreneur wrote a few years ago, disclosing financials shows that “decisions and information no longer appear to be the domain of leaders in isolation.” 2
Share company financials with employees because it can boost productivity. 3
Can news of a bleak company outlook scare away some employees? Yes. But this risk is often outweighed by another byproduct of financial disclosure: Unity and action.
Hearing news of a bad quarter, employees might experience a renewed interest in productivity and results. 4 After all, they’re no longer working in a vacuum, but rather reminded that their contributions have the ability to impact company financial outcomes. Peter Maldonato, co-founder and CEO of Chomps, put it this way to Fortune: “Transparency is powerful, because the more people understand our financials and goals, the more personal ownership we see.” 5
Share company financials with employees because it’s good for recruitment.
Amidst the Great Resignation and other economic factors, talent-hungry businesses are implementing all manner of company perks in the quest for strong candidates. However, many overlook the easiest and most effective draws. We consider financial disclosure one of these. Highlighting your business’s stance on financial disclosure in job listings and in candidate interviews is a great way to demonstrate that your business embodies the transparency culture touched on above – a culture that’s becoming key to attracting and retaining quality talent.
Have questions about the economy ‘s impact on the people in your business – or other workplace HR matters? Reach out to myHR Partner. We can answer your specific questions and help you navigate any economic season.
1 https://fortune.com/2022/09/29/genuine-transparent-helpful-time-new-generation-leaders-charge-careers-leadership-success-bill-george
2 https://www.entrepreneur.com/growing-a-business/how-to-disclose-company-financials-like-a-boss/300861
3 https://www.entrepreneur.com/growing-a-business/how-to-disclose-company-financials-like-a-boss/300861
4 https://www.teleioscn.org/blog/the-importance-of-sharing-financial-information
5 https://www.inc.com/magazine/201906/kate-rockwood/financial-transparency-share-revenue-goals-projections-employees.html