Mutual Trust

Leaders are fixated on employee engagement. Around the globe, fewer than three in ten employees are engaged at work. When a majority of employees are disengaged, the performance of the organization they work for falters. On the other hand, highly engaged teams outperform in business outcomes. Leading organizations have figured that trust at work boosts employee engagement. Mutual trust is the key to employee engagement and crucial to the success of organizations.

The concept of trust refers to the mutual respect and psychological safety between workers and leaders. In other words, it's about the confidence people have in each other to do what's right. The concept is the same all around the world. Trust builds relationships and holds them together. It's hard to gain but incredibly easy to lose. It's perhaps best captured in the Dutch proverb by statesman Thorbecke, who once said: "Trust arrives on foot and leaves on horseback". Establishing trust takes time, patience, and effort. How to build and maintain trust remains, for most businesses, elusive. Once it's put in place, it's often overlooked. But in its absence, it's talked about constantly. Trust is like wealth, it takes a long time to accumulate, is easily spent, and when it's no longer there it's the only thing people talk about. 

Trust is unmistakably the most important variable in work environments. When there's no mutual trust, business decisions are informed by suspicion and actions motivated by self-interest. Without it, employees become demotivated and less productive. In contrast, high-trust work cultures empower employees. These cultures are more diverse and inclusive.  They encourage employees to share opinions and ideas. Consequentially, organizations with employees who feel trusted have better business outcomes. Their employees are more energized, less stressed, and more productive. The presence of employees' trust in their employers stimulates the reporting of observed illegal and inappropriate behaviors. It also increases their loyalty to their employers, which impacts attrition rates. Trust is a variable of extremes. Organizations that have high trust thrive and those with low levels of trust fail.

There's a trust gap between employees and employers. That gap has been growing at an accelerated pace since 2019. The global pandemic radically changed work environments. Remote and hybrid work options became the norm for two years but distrust, especially from employers, remained. That led to the increased use of surveillance technology and the implementation of return-to-office policies at the end of the pandemic. It also led to employees increasingly experiencing anxiety, mental health challenges, and burnout. Coming out of the pandemic, no one seems to trust each other anymore. Distrust has soared. Simultaneously, there's been little effort to close the gap. One of the reasons is that business leaders believed employees had high trust in their organizations while data confirmed the opposite is true. The situation is slowly changing. Efficiency is under the loop, more work has to be done with fewer people, and leaders are progressively looking for ways to repair fractures in the employee-employer relationship to bump up employee engagement. 

Data confirms the trust gap. Research by PwC (2022) found a 15-percentage-point gap between the perceptions of business leaders and employees. 84% of business leaders believed their employees had high trust in their organization while only 69% of employees confirmed that trust. Although there's a significant gap, the report by PwC showed pretty strong trust from employees in their organizations. A year earlier, Gallup (2021) found that just 21% of workers in the United States expressed high levels of trust in the leadership of their organization. A more recent report by Development Dimensions International (DDI, 2023) shed light on the trust between leaders. 32% of leaders trusted senior leaders at the organization to do what's right and 46% trusted their direct managers to do the same. Trust decreases with each hierarchical step between workers and business leaders. Another element that affects trust is the type of work environment employees work in. Leaders who work remotely are 22% more likely to trust senior leaders compared to those who work on-site. A study by Daniel J. Edelman Holdings, Inc. (Edelman, 2023) stressed that employees who don't sit at a desk trust their organizations less than those who do.  Trust gaps exist between talent in different roles and people working under different circumstances.

Closing the trust gap and building a high-trust work culture has measurable benefits for organizations. Harvard Business Review (2017) compared the difference between employees working at low-trust and high-trust organizations. The research showed that workers at high-trust businesses were 50% more productive, 74% less stressed, and 106% more energetic at work. A different study by Personio SE & Co. KG (Personio, 2024) showed that employees working in high-trust organizations are more likely to report inappropriate or illegal behaviors (69%) than those who don't (58%). Furthermore, employees experiencing high levels of trust are more likely to stay with an organization. Data by Gallup (2021) suggests that employees who trust their leaders are 61% more likely to stay and not look for another job. Great Place To Work (2019) found that 87% of employees working at companies with the highest level of trust wanted to work there for a long time. On the flip side, 71% of employees would leave an organization if it loses their trust (PwC, 2022). With trust comes higher employee engagement, lower turnover, and better business outcomes.

Leaders need to follow a few steps to start addressing the trust gap and build trust within their organization. First, they need to open up to their teams. That means that they're more transparent about the decisions they're making and listen more to the voices of their employees. This results in a better-informed decision-making process and employees feeling respected. Second, they need to train managers to live the example. In other words, they need to develop managers to constantly display their engagement and act in a fair and unbiased way. Third, they have to scale back on surveillance efforts and involve employees in defining metrics that measure their productivity. This will reduce stress and anxiety and ensure employees find a healthy work-life balance. Finally, leaders must align the perceived purpose of employees with the purpose of their organization. When everyone collectively works toward the same objectives, they perceive their work as more meaningful and express higher trust in their organization. 

Mutual trust is about believing in each other to do what's right. It's the single most important concept in business, enabling effective decision-making and meaningful work. In recent years, trust in the workplace has deteriorated, which led to historically low employee engagement. Because of distrust, organizations miss out on benefits important to their performance. More focus on business outcomes calls for leaders to take steps to repair fractures in the relationship with their teams. There's a need for more transparency, involvement, and training to mend relationships and establish a high-trust work culture to promote employee engagement and secure future business success.