Staff members at privately held companies are less likely to receive information from management about how the business is performing than employees at publicly traded companies, according to a new survey.
The survey, by Robert Half Management Resources, found that 76 percent of the 1,300 CFOs of private companies polled said their companies do not give quarterly or annual financial updates to all their staff. In contrast, public companies are required to disclose their financial performance every quarter to investors and the information is easily accessible to employees.
The survey found that 17 percent of the CFOs surveyed said they share financial information with select employees, while 7 percent said they 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," said Paul McDonald, a senior executive director with Robert Half, in a statement. "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 that are proactive in offering insight on what is 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."
Robert Half Management Resources recommended using staff and department meetings to share business trends and put them in perspective. While financial executives may not be able to provide detailed results, if revenues increased during the previous quarter, they should explain why. More importantly, they should show employees how their daily work contributes to companywide growth.
The staffing company also recommended that CFOs resist the temptation to hold back information when the news is bad, or employees may jump to their own conclusions. While financial executives may not be able to give a complete financial report, they should consider sharing information that could rally the team to turn things around.
CFOs should also foster an ownership mentality, Robert Half recommended. Financial executives should encourage company staff to adjust their priorities and activities given the company's overall business situation. Invite their input on process improvements, cost-cutting and new business sources. CFOs should also reward those ideas that lead to greater efficiency and growth.
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