Do you know if your employees are aware of your company’s finances? Or maybe you assume they don’t need to understand them unless finances are part of their job duties?
At the Numbers Coach, we believe all employees should be educated on the financial fundamentals of your business. How do you make money? What does profit and loss mean for the company?
It’s important to help connect an employee’s job to the financial results of your company. This helps them see how their work impacts the company’s ability to provide the products and services needed by its customers.
People may be working hard, yet have no idea if the company numbers are up, down, or stagnant. It’s up to business owners to educate employees with as least enough financial information for employees to understand how their role affects the bottom line. Many companies host regular financial seminars for their teams, or sponsor outside classes on financial fundamentals (because, after all, even those in upper management can use an occasional refresher!)
Creating awareness of the company’s financials can also spark motivation for employees. One CEO of a multi-location retail chain began to use money as a motivator to get employees in all stores to increase the company’s bottom line. It’s amazing how creative people can be when properly motivated. Store owners ran promotions, emphasized pre-sales, and even hit the pavement carrying signs. And sales began to improve almost immediately!
Whatever leadership tactics a business uses, it is important for employees to see how they personally affect the numbers. All departments, including customer service, sales, marketing, shipping and receiving, IT, etc., have an impact on profits and losses.
By making the finances personal and relevant to your employees, you gain their trust and empower them to make a difference. Paint the big picture for them, including the status of your business and what success looks like.
In the case of finances and employee buy-in, knowledge is power! Don’t be afraid to share the good and the bad with them. . . the payoff will be worth it in the long run.