The effects of low trust in organisations

Trust is a business’ primary currency. Let us explain why.

1. Investors need it to ensure they are spending their money on the right companies.

2. Clients need to know they are in safe hands to spend their budget.

3. Employees need to hear their leadership has their backs if they are to execute on their company’s vision.

Trust is what makes a entire organisation go round. So, when an organisation fails to deliver on the promise, the biggest risk they face is not only losing money, but their most important asset - their people who are the brand’s biggest ambassadors.

Whether the employees are in client-facing or supply chain roles or not, every employee working for a business has a network of influence. And once an employee loses trust in their business and decides to leave, the chances are they may tell their network about their bad experience. The lost trust will a have a ripple effect on the wider business: whether it reaches other employees, clients, partners or investors, the effect can easily snowball and result in mass exodus – or simply reduced budgets.

This is why maintaining high levels of organisational trust should be a top priority for every business.

We are experts at using AI and extensive data analytics to identify the early signs of lost trust, the root cause that’s led to an erosion of trust within the organisation, and how to tackle the issue to avoid it spiralling. In our recent ‘Fighting Turnover’ report, we have found that drops in organisational trust typically are due these five dimensions:

1. Psychological safety

‍An environment that doesn’t make employees feel safe leads to employees feeling undervalued or even uncomfortable. As a result, employees are less likely to share their ideas, ask questions or report mistakes.

2. Transparency

A company that withholds information from employees, particularly if it impacts their ability to make decisions, can result in workers worrying their leaders are being dishonest, and therefore are not reliable or trustworthy.

3. Person-job fit

If there is a mismatch between an employee’s skills and values, and the work they’re expected to do or the team they’re expected to be a part of, the employee is more likely to feel undervalued and underutilised.

4. Cross-functional collaboration

The business world requires constant upskilling and collaboration. Not offering employees opportunities to work across teams limits their ability to continue to develop new skills and learn new ways of working from peers across other divisions.

5. Subjective well-being

‍Happy employees are more productive and committed. However, this dimension involves a certain amount of understanding and empathy that goes beyond direct     performance: happiness at work can also be impacted by happiness or well-being outside of work. Without a deep understanding of an employee’s motivation, it can be challenging to try and prevent a drop in subjective well-being.

Being mindful of these categories will help you better assess who your team is performing, and protect them from burnout. To help you learn more about the real impact each of these dimensions on organisational trust, and how you can address them as a manager or business leader, we have developed the guide How to regain organisational trust.

If you would like to learn more about ways you can address a drop in organisational trust early, contact us.