For a company to exhibit transparency, it must be open and clear with unhindered honesty. Transparency can build a company loyalty and trust among its audiences, both internally and externally. Not only does transparency improve employee relationships, but it also improves relationships with your investors and the public as well.
Here are four examples of how transparency in business can benefit your company:
Happy and engaged employees help to maintain a healthy business. According to the Society for Human Resource Management’s 2016 Job Satisfaction and Engagement survey, employees identified ‘trust between employees and senior management’ as a key factor in job satisfaction, with 55 percent of respondents ranking it very important.
Employees who are kept in the loop and involved are more likely to put trust in their employer. Harvard Business Review’s 2013 employee engagement survey revealed that 70 percent of those surveyed say they’re most engaged when senior leadership continually updates and communicates the company strategy.
As a leader, you should help your employees understand the link between their jobs and the overall vision for the company. When they feel valued and appreciated, employees are likely to be more loyal to the company and, therefore, more engaged.
When you gain respect from your employees, your retention rate is also likely to improve. Studies show that people quit bosses, not jobs. In fact, a 2014 CareerBuilder survey revealed that 37 percent of the 3,008 employees surveyed were likely to leave their jobs due to a poor opinion about their boss’s performance.
When employees know their roles, and have a great understanding of everyone else’s within the company, processes become easier to follow and productivity increases. Employees feel valued and tend to put in more of an effort when they can see the link between their specific job and the overall success of the company. When a leader speaks openly about the strengths and weaknesses of a team, and employees can share opinions and perspectives, a bond forms among the team.
Transparency also fosters a collaborative environment. When leaders are open and honest about company dilemmas, employees, who may be closer to the problem, can help find solutions. Once trust among leaders and employees is established, employees will be invested in the company and want to contribute in improving inefficiencies.
Confidence is key when it comes to finding someone who will invest in your small business. Potential investors won’t want to put money into a new venture without the sureness that they’ll benefit from it in the long run. Being transparent with financial data and showing company progress is a great way to build trust and encourage them to invest in your company. When preparing financial statements, some companies attempt to hide the potential risks, but investors appreciate knowing the good and the ugly when it comes to investing in your business.
Transparency helps strengthen relationships with current investors as well. Those who have already put money into your business want to know how well and how poorly the company is doing. Relaying true financial data will instill faith in your vision among your investors.
A transparent approach to business shows the public that you have nothing to hide. Being upfront, honest and straight-forward, even when the information is unfavorable, will gain your company respect from your industry peers and local community. In the event of a crisis, the foundation of transparency you’ve laid out, will help those affected trust that you will do everything possible to rectify the situation, even in the most challenging of circumstances.
Transparency can help your revenue goals as well. Your customers want relevant, truthful and easy-to-comprehend information about your business’s products or services before they decide to spend money. An EngagementDB report summarized that corporate transparency can increase a company’s revenue by 18 percent.
Encouraging transparency within your business can make your company stronger, more efficient and an overall better place to work. Whether you’re looking to improve employee morale or build trust with investors, corporate transparency can help shape the reputation that will help you achieve your goals.
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