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Tech and Innovation

3 Ways to Become a More Financially Transparent Organization

Recent studies have demonstrated a lack of trust between employers and employees in the workplace. With this in mind, what can companies do to build a more confident work environment? Rhett Power discusses why money factors into this equation and how business leaders can shore up financial trust among their teams. 

The trust erosion between employees and employers is fast approaching a critical mass. As noted in the 2021 Edelman Trust Barometer, CEO credibility has lost momentum around the world. Although businesses still retain a 61% trust factor overall, that number indicates that 4 in 10 people still hesitate to put faith in organizations.

Another study conducted by Elements Global Services shows that around half of workers hide information from leadership due to a fear of backlash. As a leader, you can’t afford to ignore this type of unrest, cynicism, and wariness from your team. More than ever, you need everyone on staff to collaborate openly. Otherwise, you’ll have trouble recovering lost ground from 2020 or scaling your operations.

Where is the first place to make changes toward building a sense of trusting camaraderie and community in your company? Think about operating with more financial transparency. Many businesses keep any money-related insights in specific silos, but honesty and transparency build trust.

How can you build financial transparency into your business model and workplace culture, then? Consider the following steps:

  1. Ensure complete compliance with updated financial disclosure policies.
    Does your organization follow strict compliance rules? Your employees might be taking advantage of your company — and each other — if you haven’t updated your financial disclosure regulations.

    Take crypto-assets, for instance. In a market study conducted by compliance technology solutions provider StarCompliance, a mere 10% of financial firms said they “have a thorough understanding” surrounding cryptocurrency trades among their team members. Although cryptocurrencies such as bitcoin might be new and unfamiliar to many, they could become conflict of interest headaches for companies that don’t anticipate or sidestep issues.

    Of course, you don’t have to be in the financial sector to need financial disclosure policies. Even if the policies only pertain to certain executives or even board members, your attention to this detail will help put employees at ease.

  2. Hold regular town hall meetings led by the C-suite.
    Financial information should be shared with all employees in an open forum so no one feels intentionally uninformed. Town hall meetings are a great way to gather employees, share information about current financials and future financial goals, and hear feedback.

    Begin setting up regular town hall meetings by deciding how often you want to hold them. Some companies like to host them monthly, whereas others opt for quarterly or semiannual sessions. This depends on how frequently you foresee having new information to share. Next, figure out if you want them to be virtual, in person, or hybrid to accommodate all workers.

    To avoid your town halls veering in too many directions, send out agendas with time frames. You might want to ask workers to send in questions before the town hall as well as allow them the opportunity to bring up concerns during the gathering. Just remember that your town hall needs to have “meat” and give-and-take to build trust throughout your organization; according to a POPin survey, almost one-quarter of respondents lamented that town halls were too one-sided. Do your best to exceed attendee expectations by listening and responding.

  3. Add salary information into job descriptions.
    Not long ago, companies tended to hide salary information from employees. The reasoning was simple: If workers knew what their colleagues made, they might ask for raises — or just leave. However, in the modern era, you already know that co-workers tend to talk. And plenty of average salary ranges for common positions are listed online, anyway.

    Instead of keeping your employees in the dark about payroll, include salary amounts and benefits in your job descriptions. As mentioned in an article from the Society for Human Resource Management, only 12% of job postings currently advertise their wages. This gives you the chance to differentiate your organization, attract talent interested in working in transparent environments, and save time during the interview process.

    Leading with salary can also be beneficial during the current skilled worker shortage. Many people have opted into the Great Resignation, quitting their jobs in pursuit of better opportunities. Your willingness to be upfront (and generous) about financial facts could woo great talent back into the workforce.

    Trust is hard to get and easy to lose. Yet it’s an important goal to have if you want to stay competitive. Start by reworking your financial transparency. From that point, you can dive deeper into other ways of building loyalty and engagement among your team.

Written by Rhett Power.

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CEOWORLD magazine - Latest - Tech and Innovation - 3 Ways to Become a More Financially Transparent Organization

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Rhett Power
Rhett Power is responsible for helping corporate leadership take the actions needed to drive impact and courage in their teams that will improve organizational performance. He is the author of The Entrepreneur’s Book of Actions: Essential Daily Exercises and Habits for Becoming Wealthier, Smarter, and More Successful (McGraw-Hill Education) and co-founder of Wild Creations, an award-winning start-up toy company. After a successful exit from the toy company, Rhett was named the best Small Business Coach in the United States. In 2019 he joined the prestigious Marshall Goldsmith's 100 Coaches and was named the #1 Thought Leader on Entrepreneurship by Thinkers360. He is a Fellow at The Institute of Coaching at McLean Hospital, a Harvard Medical School affiliate. He travels the globe speaking about entrepreneurship and management alongside the likes of former Gates Foundation CEO Sue Desmond-Hellmann and AOL Founder Steve Case. Rhett Power is an acclaimed author, leader, entrepreneur and an opinion columnist for the CEOWORLD magazine. You can follow him on LinkedIn, Facebook, and Twitter.