The State of Trust In Corporations Today
Based on the 2016 Edelman Trust Barometer, we’re living in a world of divided trust. Leaders must recognize the “importance of action, values, engagement and employee advocacy.” When looking at the percent of trust in the four institutions of government, business, media, and NGOs, the trust gap is largest in the U.S. which shows an almost “20-point gap between the trusting informed public and distrusting mass population (64 to 45 percent).” Less trust from the general population group means less optimism in the future, with “only 45% of the mass population” optimistic that they will be better off in five years. Misbehavior by the elite group, or informed public, has caused the general population to lose trust that the elite group will do the right thing. This stands out in the financial services industry with increased mistrust in CEOs.
The General Population Trusts Peers vs Authority
Along with the widening trust gap, the pyramid of influence has been flipped upside down. Traditionally, the elite group is on top, being the most influential, today, the mass population is the most influential, yet least trusting of corporate leadership. “A person like yourself is far more trusted than a CEO or government official.” “Peer-influenced media – including search and social – now represent two of the top three most-used sources of news and information.” This has big implications for business and stresses the importance for brands to be part of the conversation online and offline where consumers are communicating with each other. Online reviews have become more important than ever in influencing purchase decisions. People are more influenced by what their peers say than what a company tells them about a product or service. Online employee reviews such as Glassdoor become critical when future employees are looking for prospective employers. Prospective employees also rely heavier on stats such as employee turnover and feedback from previous employees vs the “sales pitch” from the interview process.
What Businesses Can Do to Increase Trust
Leaders need to focus on key areas to increase trust with their employees:
Employee Advocacy Increases When Corporations Are Engaged with Societal Issues Rather than Short-Term Profits
CEOs who focus on societal issues increase employee advocacy and engagement. When a “CEO is engaged in addressing societal issues, an employee’s motivation to perform escalates 22 points, an employee’s willingness to stay working for a company climbs by 22 points, and inclination to recommend the company as an employer grows by 25 points.” On the other hand, CEOs whose only concern is short-term profits, at the expense of employee connection, results in lack of trust in authority. Globally, one in three employees do not trust the company they work for. While at the same time, employees are the most trusted spokespeople for your company.
“Trust in institutions and their license to operate is no longer automatically granted on the basis of hierarchy or title; rather, in today’s world, trust must be earned.” Richard Edelman, President & CEO
Learn more on how to rebuild trust in a broken corporate culture.
Develop Trustworthy Leaders
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