In business we trust? It’s all relative

One outcome of the pandemic, well documented by the folks at Edelman, is that trust in business rose higher than trust in government, NGOs, or the media. But there were always caveats to that finding. First of all, it was relative: while business may be more trusted than other institutions, trust–particularly in Western countries–remains low in all institutions. Second, trust was highest for “my employer,” but significantly lower for business in general. And third, the biggest caveat was the possibility that the finding was a pandemic aberration. Would it last once the peculiar circumstances of the pandemic had passed?

That last caveat is now being put to the test. With layoffs proliferating, banks failing, and the economy weakening, will business lose its (moderately) exalted position of trust?

A new report out this morning from the folks at PwC sheds some light on that question. It is based on a survey of 500 business executives, around 2,000 employees, and 2,500 consumers in the U.S. In mid-February. The report finds there is a big gap between what executives have to say on the issue and what employees and consumers say. While 84% of the executives believe consumers trust their companies, only 27% of consumers agree. And while 79% believe employee trust is high, only 65% of employees agree.

Unsurprisingly, the survey shows layoffs don’t help. But it also suggests there are things employers can do to maintain trust, even when forced to impose layoffs. Among them: increasing communication with remaining team members, being transparent in explaining the reasons for the layoffs, and providing generous severance benefits. Consumers in the survey also said protecting their data helped build trust with companies, while employees cited both pay and data protection as keys to their trust.

“Transparency goes a long way when building trust.”, PwC’s U.S. Chair Tim Ryan said. “ It’s important to practice trust always, but especially in hard and difficult situations. Clear communication and explaining the why behind big decisions can go a long way when it comes to building trust with your stakeholders. “

Trust, by the way, isn’t just some fuzzy concept that’s irrelevant to the bottom line. Nearly all the business executives (91%) agreed that enhanced trust with employees and customers boosts their results. And one of the best ways to monitor trust, they agree, is to listen closely to your employees. They are on the front lines–and know best how trust is impacting the business.

You can read the full report here. More news below.

Alan Murray
@alansmurray

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This edition of CEO Daily was edited by Jackson Fordyce.