The recent swath of layoffs couldn’t have come at a worse time for companies. Even before the staff cuts, most were already facing a crisis of trust. According to DDI’s 2023 Global Leadership Report, just 32% of leaders say they trusted senior leadership in their organization to make the right decisions, and fewer than half trusted their direct managers. Since then, organizations have handed out thousands of pink slips, with February layoff announcements the highest they’ve been since 2009.
Now, the remaining staff are left feeling bewildered, betrayed and uncertain about their own futures. That’s a huge problem for company leaders looking to move forward, rebuild confidence and security in their organizations and remain competitive.
To stave off a voluntary exodus and prevent employees’ productivity from plummeting, companies must act now to rebuild a high-trust culture.
Why Trust Matters
It probably comes as no surprise that a high-trust culture plays a massive role in employee morale, satisfaction and loyalty, and is therefore critical to business success. When leaders treat employees like valuable members of the team, involve them in decision-making and explain the rationale behind difficult choices, it boosts commitment and confidence in the organization’s overall direction.
It also drives employee engagement. Compared to low-trust environments where employees feel like they’re constantly looking over their shoulder or questioning everything, employees in high-trust environments are 75% less stressed, take 13% fewer sick days, and report 106% more energy and 76% more engagement. They’re active participants, willing to share ideas and take ownership of their work and the company’s success.
Trust also fuels innovation by creating a psychologically safe space where employees feel free, and even encouraged, to try new ideas and experiment without fear of retribution for perceived failure. In fact, leaders who trust their senior leaders are nearly three times more likely to develop novel ideas or solutions compared to their peers in low-trust environments.
All of this contributes to greater collaboration between team members and higher productivity. A high-trust culture reduces suspicion about hidden motives, removes cut-throat competition between co-workers and curbs gossip that hinders productivity and teamwork.
Avoid Trust Traps During Turmoil
When leaders are under stress, they often default to behaviors that destroy trust. For example, they may instinctively default to shutting employees out of the conversation, withholding information, or saying things they hope will quell any protest or negative feedback.
But the truth is, it’s when things are most difficult that leaders should be the most forthcoming and authentic in order to maintain the trust and confidence they built with their team during times of triumph. It’s essential to avoid breaking promises—or making ones they don’t know with full certainty they can keep—and that leaders act consistently in accordance with the organization’s mission and values. That includes acting with the good of the organization and its people in mind, rather than serving their own self-interests.
How To Rebuild Trust After Layoffs
Regardless of whether they’ve laid off their own staff, companies must prioritize building and cultivating trust to boost morale, engagement, innovation, and collaboration before their team members start heading for the door. The good news? There are four learnable behaviors leaders can practice that have proven to help organizations create a high-trust culture. These include:
- Speak authentically. Leaders should communicate openly and transparently about the reasons, benefits and next steps around decisions and changes, leaving nothing open to interpretation or assumptions. This builds trust in three critical areas: leaders’ character, competence and communication. Employees trust leaders who will do what they say, make expectations clear and keep their promises.
- Share vulnerabilities. Contrary to many leaders’ fears that vulnerability will be perceived as weakness, employees are over five times more likely to trust leaders who acknowledge personal challenges and even failures. Sharing your thoughts and feelings helps build understanding and trust by letting others know that you are all facing these issues together, while fostering empathy among team members who, as a result, are more likely to be forgiving of difficult decisions or unpopular changes. It’s also perfectly acceptable for leaders to admit they don’t have all the answers, which builds more credibility than faking it.
- Show empathy. Sometimes leaders have to make hard decisions that will be upsetting for their team. Recognizing and validating their feelings, rather than ignoring or downplaying them, goes a long way toward building rapport. When you show that you understand and care, your team will feel more comfortable confiding in you and trusting your judgement—even if they don’t necessarily like the outcome—and you may gain important perspective that can help in future decisions.
- Offer support. While leaders are deeply concerned about burnout among their teams, 85% say they feel helpless to prevent it, in part because they’re feeling it just as much themselves. To guard against the exhaustion this creates, organizations must train and equip leaders to be on the lookout for and address signs of burnout, stress and frustration among their teams. Leaders should ask individual team members what they need in order to ease difficult transitions. It could be anything from more information, reskilling or opportunities for development, or schedule changes to external resources and mental health support.
Ultimately, trust is built on a drive for connection, which relies on transparency, empathy and treating your team with respect. It sounds cliché, but especially in times of crisis, honesty is always the best policy, and no employee is ever spared pain when critical information is kept from them. Your team members are all adults, and should be treated as such, but they’re also human beings with feelings, families and their own personal challenges. Management decisions can have far-reaching impact on their lives, and being aware of and sensitive to that nuance is critical for building trust.
Stephanie Neal is Director of DDI’s Center for Analytics and Behavioral Research (CABER).