As a small business owner, you are not required to share financial results with employees. It is your right to keep this private, and many decide to take this approach. At the same time, there are owners who have come to realize the benefits of sharing this information with employees.
This is a big decision, because it could go a long way in changing the perception employees have of the company. While there are pros and cons, the final decision is yours and yours alone. Only you know if sharing this information would be in the best interest of the company.
There are many benefits of telling employees how the company is doing, including but not limited to the following:
- It makes them proud of their work and overall progress. The owner of the company may be at the top, but it is the employees who keep things moving forward, day in and day out.
When you share financial results, each and every worker has the opportunity to feel good about what he or she is putting into the company.
- It gives them confidence that the company is stable. Is there anything worse than the belief that your company is going under? If employees begin to think this way, it is possible they will worry more about stability and less about the task at hand.
It is nice to share positive financial results, as this will instill confidence through the ranks.
- It shows that you truly care about your employees. There are companies where employees feel they’re not cared about or respected. Part of this can be due to a lack of knowledge about what is going on within the organization.
You can change this perception by being open and honest, showing financial results and discussing the numbers with employees.
Just as there are benefits of sharing financial results with your employees, there are drawbacks as well:
- If things are not going well, employees may begin to worry. Is this something that concerns you? Even though you know that things are okay and bad times can be turned to good, employees may panic. Subsequently, some may jump ship in fear that the company is not going to be around well into the future.
- It can bring about salary related concerns. Imagine this situation: you show employees positive financial results, which immediately leads to one or more workers feeling that they are underpaid. As a result, they begin to take this out on the company by discussing their concerns with other employees and slacking off.
When some people get the impression that the company is doing well, they may automatically assume they should earn more. They may not fully understand the business and the investment necessary to grow and sustain it.
- Employees may think too much about financial details. Even though you may have a plan in place for how and when you share financial results, some employees will begin to obsess over this, asking you for information when you are not ready or willing to share. Is this a risk you are willing to take?
Whether or not you tell your employees how the company is doing, from a financial perspective, is your decision. The pros and cons detailed above should help you decide if this is something you want to try, or if it makes more sense to avoid it altogether in the future.
As part of a publicly traded company, we present all of our results to employees. However, my executive team and I like to go beyond just making the numbers available. We have a special quarterly presentation to share a detailed overview of where we’ve had success and where we hope to grow. When we have success, we want our employees to be proud of the role they played in it.
Andy Roe is the General Manager of SurePayroll, Inc., a Paychex Company. SurePayroll is the trusted provider of easy online payroll services to small businesses nationwide. SurePayroll compiles data from small businesses nationwide through its Small Business Scorecard optimism survey, and exclusively reflects the trends affecting the nation’s “micro businesses” — those with1-10 employees. You can follow Andy on Twitter @AndrewSRoe.