An introduction to getting staff interested in the financial situation
A lot of business leaders find it difficult to decide on an appropriate level of financial information to share with staff.
While it’s important to communicate key messages and honour a certain level of transparency, it’s common to worry about oversharing, causing confusion or worrying staff.
Many leaders we’ve spoken to have talked about low engagement levels amongst team members where company financials are concerned. In some cases, there’s a clear lack of interest in the financial situation. For others, communication issues in the past have led to mistrust around the issue.
Although it can be tricky to get your staff interested in the financial side of the company, it’s important to make an effort to include them. Showing them that there’s a direct connection between the work they do and the overall success of the company is a great way to remind them of their impact.
Research shows that 82 per cent of staff actively want to be given updates about their company’s financial situation, yet only 56 per cent of businesses provide updates to all workers.
This guide will look at some of the common mistakes companies make when sharing financial information and quick wins that can make the process easier in your own business. The next step will be to use our action plan to direct your change and improvement.
What factors should you consider when sharing your financial situation?
Level of transparency
It’s important to think through how much information you are willing to share with your workforce.
It can be easy to initially agree to being fully transparent with your team, but you need to factor in how sustainable this will be in both the near and distant future.
Will you be prepared to share close details of your financial situation for the next few years? Will senior staff or external stakeholders be comfortable giving staff this amount of knowledge?
How your team will respond – and their expectations
If you want to engage staff in the company’s finances, you need to accept that they will probably have questions and expectations around the information you’re sharing with them.
Be prepared for discussions around what information is shared and how it’s shared. It’s likely that employees will also have questions about what the company’s invested resources in or the financial impact of different projects.
Shifting attitudes, both positive and negative
Another key point to consider is how your team will react. Different circumstances can create a ripple effect that shifts between excitement and disappointment, depending on the updates you provide.
When it comes to transparency, you need to be sharing the whole picture. You can’t only give your staff updates when things are good, which means you need to take into account the fact that you may also need to share bad news sometimes. Consider the knock-on effect this could have.
Plan how to address any concerns that come from less positive updates, and preempt any worries about bonuses or commission schemes by mapping out new ways to motivate, and include, your team in these discussions.
“In any economic downturn people worry about money and about how it’s going to affect them, so we’re very transparent with all of our numbers. We share these on a weekly basis and our staff have full access to all our revenue metrics.”
Ben Branson-Gateley, CEO of CharlieHR
The cold hard facts
Common mistakes with sharing financial information
Assuming your team don’t care
If your staff have never expressed an interest in the financial side of the company, you might assume it’s because they don’t care.
It’s important to recognise that this probably isn’t the case. They might not have been included in those conversations in the past or they could have been shut down when they expressed an interest in it.
Oversharing sensitive information
Even if you want to develop a culture of transparency, avoid sharing too much information.
First, this can feel overwhelming and can lead to a disconnect amongst staff – sharing spreadsheet after spreadsheet is likely to sap interest quickly.
Second, oversharing can lead to confusion and alarm. Financial information needs to be presented in a thoughtful way. If employees zone in on the losses you’ve made because it’s the first thing they see on a spreadsheet, they’re likely to worry about how that will impact their job security or bonus.
Not giving context
A common mistake is seeing sharing financials as a box-ticking exercise. You send an email updating the team on sales revenue and profits and set a reminder to do the same again next month.
A lack of context is a common reason why employees fail to engage with the financial situation. If they’re just getting sent spreadsheets with no explanations or comparisons to previous months, they will switch off and lose interest – and rightly so.
“Our employees appreciate the transparency of the business and its finances – they’re more engaged. We have also created an element of friendly competition by introducing individual and team bonuses based on performance, which has gone down very well.”
Dez Derry, founder of mmadigital
The cold hard facts
Harvard Business Review found that once employees became engaged in their company’s financials, they started to spot new opportunities. One CEO of a mid-sized manufacturing company was quoted as saying, “I don’t have employees in my plant anymore. I have entrepreneurs who are looking to find ways to make more money”.
Quick wins for getting staff interested in the financial situation
Share information on a regular basis
One of the reasons your staff may not seem interested in the financial side of the business is because it’s never been a long-term discussion before.
If your team has been given a one-off update or a negative one, it’s no wonder they feel disconnected. To keep them interested, show that you value them enough to regularly keep them in the loop.
Make financial updates a consistent, recurring part of monthly meetings or share an overview every quarter. This will demonstrate that you’re committed to honestly informing them about the company they’re part of.
If they know that they will be getting regular updates, they’re more likely to be invested and engaged.
Ask for feedback on what you share
Remember why you want your staff to be interested in the financial situation. It could be to motivate them or you might want them to simply have a deeper understanding of the role they play in the company.
Whatever your reasons, check in regularly to make sure you’re meeting your own expectations. Ask line managers to get feedback in one-to-one meetings and send round a survey each quarter to learn what you could do differently.
Are they motivated to work harder because they’ve seen that they’re making the company more money? Are they more interested in learning about how the company’s finances directly impact their own? Feedback should give you an informed idea.
This will help you finetune what you share and how you share it, so more people become engaged in the long run.
Keep it relevant
Rather than spouting statistics at your team, take a few minutes to double check that you’re sharing relevant information.
Talk about which specific project generated revenue and congratulate the team members that were part of that. Share with your staff how much money you’ve invested in training them or hosting employee social events.
By keeping your financial updates relevant and relatable, you’ll have a better chance of genuinely engaging your team and reminding them of the contribution they make.
“We try to equate revenue with happy clients on the basis that the happier the clients the longer they will stay with us and the more people they will recommend to us. So we talk about revenue, especially at team meetings, as a marker of success on our mission to help people build beautiful businesses.”
Paul Bulpitt, co-founder of The Wow Company
The cold hard facts
Now you’ve learnt about the underlying factors that affect how you engage staff with your financial situation, use our action plan to direct your improvement efforts.