How much do we tell the employees about the money in the business? For small and mid-size business owners, there is often a lot of anxiety about sharing too much information. For employees, there is a strong desire to understand the business and its prospects for the future. If you are a privately held company, balancing this is tough. Here are some general guidelines:
- Don’t give information without education. Providing any financial reports regardless of whether they are summaries, or complete traditional reports like your balance sheet, P/L and budget, should always be provided with a thorough education as to how the employee can read the data. It is possible that your employees do not have the background or training to fully understand these documents, so giving them the documents without education can be little more than distracting.
- What’s it mean to them? When looking at the information that you provide, there needs to be a clear summary telling the employees what it means to them. They will likely have lots of relevant questions:
- Is our company getting better or worse? More stable or vulnerable?
- Is my job at risk?
- What are we investing in to make us more successful in the future?
Employees look for context and relevance to the numbers.
- What can I do? Along with providing context for the numbers themselves, it is also important to provide a road map for what you are doing as a company with the information and an ask for the employees. The ask during positive periods is simple–Keep doing your great work!