Topic Thread

Sharing Financials with Employees

  • 1.  Sharing Financials with Employees

    Posted 07-11-2018 09:09
    We are a $100 mil Specialty Contractor that is asking other companies practices on sharing company financial information with their employees.  We want to be transparent with our employees but to what level of detail.  What financial information do other companies share?  Do you share all of the financial information or only selected?  Who do you share with?  All employees or only to a certain level?  What do you share?

    William Petro CCIFP, MBA
    Chief Financial Officer
    Innovative Construction Solutions
    Costa Mesa, CA
    (714) 352-3229

  • 2.  RE: Sharing Financials with Employees

    Posted 07-12-2018 08:16
    Over the years I have learned that the more transparent you can be the better.  By not disclosing certain financial information (i.e. Net Income, Specific Salaries, etc) you can be transparent without creating an environment where employees feel that the business is being unfair.

    Some of the key information that I have disclosed has been:

    • Top line sales dollars (vpy, v plan)
    • Gross margin % (vpy, v plan)
    • Total employee compensation as a %
    • Employee benefits as a %
    • Other key stats.  Are you fleet heavy, fuel heavy, etc.
    Giving the employees a view of the impact that big spend items have on the overall health of the company gets them engaged.  Particularly when you put a goal out there and show progress towards the goal.  The impact that company initiatives have towards the goal, etc.

    I know that by putting a percentage in there you can figure out the actual dollars, but I find that most people don't do the math.  They just like to see where the business if moving and if what they are doing is having an impact.  If you would like to avoid that, you can always just use percentage growth from py or vs plan.

    Chris Brinks CPA
    Van Laan Concrete Construction
    Dutton MI
    (616) 971-0172

  • 3.  RE: Sharing Financials with Employees

    Posted 07-12-2018 09:46
    I would recommend reading 2 books: The Great Game of Business and A Stake in the Outcome. Before you start sharing too much, you may want to do some financial literacy training to ensure the "rank and file" understand what you're sharing.

    Billy Friesen CPA
    Commonwealth Electric Co of the Midwest
    Lincoln NE

  • 4.  RE: Sharing Financials with Employees

    Posted 07-12-2018 10:57
    We are a much smaller firm than yours, but we have communicated to our team that "What each of us does on a daily basis will help us succeed or fail". Sharing financial information (good and bad) along with project information across the company helps us drive home that connection between work and results. It also helps our team understand the decisions we make as executives - so in short we a big believers in transparency. That said, we don't share all our detailed financial statements with the team, but do provide key financial information on a quarterly basis such as Revenue, Net Profit, Net Profit Percent, and Headcount compared to plan. We'll also touch on the company's cash position and explain primary sources/uses of cash.

    We consistently receive positive feedback from our team when they hear the information, including when we have to share "bad news". We experience greater levels of enthusiasm from our staff when times are good and a willingness to stick with us when times are bad.

    Mark Hejtmanek
    Chief Financial Officer
    The CPI Group
    Greenwood Village CO
    (303) 504-9999

  • 5.  RE: Sharing Financials with Employees

    Posted 07-13-2018 11:02
    We used to share company charts with all employees - sales, GP, expenses, NP - but it had very little meaning to the majority of employees who had very little impact ... plus they assumed management tweaked it anyway.
    Now we do it as a budgeting function. Each department's key people like managers, supervisors, key salesmen, PM's develop their own budget that they will be responsible for. (with owners and management team acceptance, of course) Monthly financials are then shared in relation to their budget. This brings the focus back to them and their goals. It has worked much better for us

    Gary Garber
    Garber Electrical Contractors
    Englewood OH

  • 6.  RE: Sharing Financials with Employees

    Posted 07-13-2018 11:58
    ​Good morning,

    At our quarterly company meetings we share financial information in graph format at a very high level.  We find visuals help communicate how we are doing against our current goals and prior year.  We only show three or four graphs at most and keep them as basic as we can.

    Once a year we have a "deep dive" that is optional to attend where over lunch we share much more detailed information, including our net profit % and other benchmarking data we maintain.  It's all in graph form.  We have slides that explain what we are about to show them and we walk them step by step through what is gross revenue, gross profit, overhead and net profit.

    Our belief is that it has promoted a better transparency and has built trust and respect.  If we want everyone to behave like an owner we need to provide them the tools to do so.


    Frances O'Sullivan
    Dome Construction Corp.
    South San Francisco CA
    (415) 812-7336

  • 7.  RE: Sharing Financials with Employees

    Posted 07-13-2018 13:04

    I recently provided some training to a general contractor in the Denver area, and rather than disclosing the financial statements of the company, I provided mock financials and helped the employees understand how to read and interpret them.  I walked them through some analysis and how contractors (and subcontractors) are prequalified (from a financial perspective).

    I do this training quite a bit through AGC state chapters, and of course in my course at CSU.  I'm happy to share some of the details if it will help you in your own training.  Let me know how I can help.

    John Killingsworth Ph.D.
    Assistant Professor
    Colorado State University
    Fort Collins CO
    (715) 308-1167