It’s Melissa from Charter’s research team. For the second year in a row, research from strategy firm PricewaterhouseCoopers found a clear divide between leaders’ perceptions of employee trust and the reality. PwC’s 2023 Trust survey found 79% of executives said their employees trust the company, compared to 65% of employees who said the same. Those numbers barely budged from 2022.
Yet there is little agreement on what damages trust between employees and executives. Executives cite security and legal and compliance failures as their top trust-damaging events - like the Silicon Valley Bank failure or the collapse of the crypto currency exchange FTX. Employees, however, mostly cite factors like mistreatment, bias, and lack of transparency. The trust gap extends to the top ranks of organizations too. A recent report from the leadership think tank DDI found just 32% of leaders said they trusted senior leaders at their organization.
That’s especially problematic in turbulent economic times. Additional research on organizational trust from Deloitte highlights the negative effects of a lack of trust, including higher attrition, lower productivity, and less engagement. And yet, only 45% of executives and 34% of employees believe their organization is dedicating enough attention to earning trust, PwC found.
Two additional areas where we think executives should focus their trust building efforts in the immediate future include artificial intelligence technologies and layoffs.
Trust and AI
Despite the rise of interest in AI technologies, less than half of executives surveyed for the PwC report (46%) say they’re very prepared for an AI algorithm risk or failure. More nerve-wracking still: less than half (48%) say they’re prioritizing efforts to reduce the likelihood of such an event. One of these events is likely to occur without a swift, organized response: a surefire way to damage trust in an organization.
Create a plan for AI-related crises that could occur to get ahead of them. This plan will likely need to be revised often to keep up with how your workplace uses AI tools, and will require collaboration with many stakeholders, such as your communications leader, CTO, and CIO. For more guidance on creating your plan, read our considerations for developing a generative AI policy.
Trust and layoffs
For employees, how a company handles layoffs is a major concern in maintaining trust with them. More than half of surveyed employees (55%) say the way their company has implemented layoffs damaged their trust in their employer. There is room to improve by increasing communication with remaining team members, offering generous severance payouts, clarity around the reasons why layoffs are happening, and outplacement services for impacted employees.
Charter’s CEO and Editor-in-Chief, Kevin Delaney on what tech firms have gotten wrong about layoffs.
Charter head of workplace strategy Massella Dukuly’s tips for more compassionate layoffs.
📋 One chart worth sharing
Find the trust gaps in your organization. The PwC report found that almost half of employees who experienced a trust-damaging event in the last year expected it. When using surveys to measure trust be sure to keep the data anonymous or confidential, ask actionable questions, and keep it short.
Learn what actions build trust among your employees. In PwC’s report, 80% of employees said being paid appropriately was very important in helping to build trust, while only 53% said working for a company with similar values as their own was important. DDI’s report found that employees were 5.3 times more likely to trust leaders who regularly expressed vulnerability.
Charter’s interview with Stephanie Neal, the director of DDI’s Center for Analytics and Behavioral Research, on how organizations can strengthen employee trust.
Methodology
PwC’s research is based on a February 2023 survey of 500 business executives, 2,508 consumers, and 2,012 employees in the United States. Charter analyzed raw data to clarify the magnitude of the difference in experiences between executives and employees.
Key takeaways:
- Despite the rise of interest in AI technologies, less than half of executives surveyed for the PwC report (46%) say they’re very prepared for an AI algorithm risk or failure. More nerve-wracking still: less than half (48%) say they’re prioritizing efforts to reduce the likelihood of such an event.
- More than half of surveyed employees (55%) say the way their company has implemented layoffs damaged their trust in their employer. There is room to improve by increasing communication with remaining team members, offering generous severance payouts, clarity around the reasons why layoffs are happening, and outplacement services for impacted employees.