Be Transparent – Share the Numbers

Virtually everyone that runs a businesses will tell you that they value honesty and open communications. They’ll say it’s the very foundation of their strategy to attract and maintain great talent.  Scratch a little deeper, however, and you’ll find that many organizations don’t like to be too honest or too open in their communications – particularly when it comes to the financial situation of the company.  Worries often center around the fear that employees will leak the information to competitors, or it will change their compensation expectations.     

We’ve always believed it’s a mistake to hide the numbers and not be financially transparent.  And in this difficult time of workforce reductions, layoffs, and salary and benefit reductions - it is more important than ever to share the information.  We advise clients to share key financial data with employees - no matter what the size or ownership structure of the business is.   As Jim Long likes to say, “….no one wants to play in a game where you don’t know the score”. 

It isn’t absolutely necessary to give everyone the entire profit and loss statement or the actual dollar figures ….although we usually do.   It IS important to give employees an idea of how the business is doing relative to the budget…. historical periods…. and the competition.  By keeping people in the dark on how the company is doing, you force them to make assumptions, or believe the rumors that circulate within all companies.  For us, fears about leaks to competitors sounds a lot more like employee satisfaction issues than it does about the availability of the data.  To be honest – we haven’t heard a strong reason yet, for hiding the numbers.

You should hire the right people – and then let them know how the business is doing financially.  Employees like to feel trusted, and they want to know if they are winning the game…..  don’t hide the score from them.