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How Transparent Should You Be with Employees During Times of Uncertainty? Periodic unpredictability and volatility are near certainties in business, and in response, leaders are left with the choice of being truly open with employees or not. (Spoiler: There's one overwhelming winner.)

By John Boitnott Edited by Matt Scanlon

Key Takeaways

  • Three reasons to be transparent with employees.
  • The pitfalls of not being transparent.
  • Taking care with the truth.

Opinions expressed by Entrepreneur contributors are their own.

Every business will run into uncertainty at some point. Unsettled times, almost by definition, are challenging to navigate, and pose an additional challenge for employee managers and other leaders: how transparent should they be with staff members?

It's important to recognize at the outset that there are reasons to be frank and open with team members and reasons not to be, but I've found that most of the time, honesty is the best policy, and there are quite a few associated benefits.

Reasons to be transparent with employees

It rallies everyone behind a shared mission: When a team has a common goal, its members pull together to accomplish it. But if they have no idea a business is facing uncertainty, you rob them of an opportunity to become invested.

For example, let's say you have to make $20,000 in the next month to make payroll. If you don't inform employees about the issue, they are stripped of the opportunity to go even further above and beyond — to work additionally hard to bridge the (hopefully temporary) gap.

Related: How to Keep Your Team Motivated in the Midst of Uncertainty

It eliminates overthinking and fear: Even if you don't directly tell employees about the uncertainty facing your company, they'll likely know something is up in any case. Maybe they've noticed that you seem more stressed, or that you have been attending more meetings than usual… and they might start worrying. In turn, this can cast a shadow on company morale. Don't leave workers wondering.

It takes pressure off of you: As a business owner, you know that it can be hard to ask for help. But in uncertain times, the support of a valued employee or two can make all the difference in the world.

For instance, if your workload has dramatically increased, you might need to call in an experienced team member (or members) to help. In this situation, it's in your best interest to tell them what's going on. Otherwise, they might think you've simply decided to slack off on responsibilities and offload onto them.

Of course, transparency can't erase all the stress and pressure that uncertainty brings, but when you share some part of the informational burden, you'll likely find that you have a little more room to breathe.

The pitfalls of not being transparent

Even given the potential benefits listed above, some business owners firmly believe that being honest about adversity does more harm than good. Chief among their reasons is that withholding potentially challenging information helps keep morale high, and workers happier and more productive. In their mind, nothing puts a damper on motivation like staff members knowing a business is in trouble.

Related: Wearable Tech Is Improving Employee Productivity and Happiness

Withholding the truth might seem like a smart course of action at first, but pretending everything is okay can backfire, not least because the false reality you've created leads to misaligned expectations.

For example, if an employee thinks everything is going perfectly, they might take additional time off. When workers have no idea of problems, you can't expect them to pull together to get the company on stable ground again. If that same employee knew the truth, he or she may well have opted to come to work instead.

Being dishonest (including lying by omission) can also damage the trust you've built with a team. It's entirely possible that at some point, a staff member will find out that the enterprise has faced (or is facing) a hardship. When they realize you kept that information from them, feelings of betrayal can ensue. Unsurprisingly, they may then hesitate before putting their trust in you again.

Taking care with the truth

If you decide to be transparent, care must be taken. With a little thought invested in how to frame a situation, it's possible to be honest and keep morale up at the same time. A few tips:

• Stay positive while sharing current challenges

• Share your vision for remedying the issue

• Offer thoughts on actionable steps the company can take

• Ask employees for their input

Related: Use Domino's Genius Strategy to Get Your Team on the Same Page

Another oft-cited reason for avoiding sharing hard business truths is that it might cause workers to look for other jobs. After all, not everyone will feel inclined to stay on and help: Some may see a sinking ship and decide they're better off leaving before things get worse.

This is an understandable concern and reaction. But you can also reframe it — regard the situation as an opportunity to filter out those who aren't committed to your goals and mission. It might be better to lose non-committed personnel than risk having them perform poor or counterproductive work ongoing. At the very least, such work won't be on the level of someone who is genuinely dedicated.

Don't make the mistake of thinking that transparency causes people to leave. It doesn't. Instead, it speeds up the rate at which inevitable things occur. In the case of employees who aren't fully on board, rest assured they were always going to leave: being honest about your company's situation just expedited the process.

How do you decide?

Before determining how transparent you need to be, weigh the pros and cons of both options. But keep in mind that there's also the possibility of a hybrid approach, in which you might opt to confide in just the management team, for example, without letting information reach lower-level employees.

But again, and in my experience, transparency is the best way to deal with uncertainty in the vast majority of cases. You'll maintain employee trust, take pressure off of yourself and unite the company in pursuit of a common goal. With such strong leadership, the enterprise will more than likely emerge not just surviving but prospering.

Related: Building A Better Mindset To Deal with Uncertainty: The How-To

John Boitnott

Entrepreneur Leadership Network® VIP

Journalist, Digital Media Consultant and Investor

John Boitnott is a longtime digital media consultant and journalist living in San Francisco. He's written for Venturebeat, USA Today and FastCompany.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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