While employees at publicly traded companies are offered an inside look at their companies’ financial performances each quarter, those at privately held companies are less likely to receive information on financial performance, according to a new survey by Robert Half Management Resources.
In fact, 76 percent of private-company chief financial officers surveyed report their companies don’t give quarterly or annual financial updates to all employees while 17 percent of private-company respondents do so. Only 7 percent of private-company respondents share financial information with all employees.
“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.
“Organizations proactive in offering insight on what’s driving performance are more likely to create stronger staff engagement. The more employees at all levels understand how their roles fit into the big picture, the more invested they’ll be in their work.”
To keep employees informed while protecting sensitive information, Robert Half recommends employers provide context by using staff and department meetings to outline business trends and put them in perspective. Detailed reports might not be possible, but an employer can explain revenue movements. This is an employer’s chance to show employees how they contribute to the company’s success.
Employers also shouldn’t withhold bad news, Robert Half maintains. When doing so, employees are likely to come to their own conclusions. Additionally, Robert Half suggests employers encourage staff to give their input on process improvements, cost-cutting and new business sources, and reward the proposals that result in higher efficiency and growth.