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.

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