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Lorne Armstrong

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Building trust and confidence in a recession

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Trust amongst the workforce can be shaken when redundancies are made, so Lorne Armstrong explains how businesses can ensure confidence is not lost and trust remains intact during a downturn.

Everyone has experienced the change and uncertainty the recession has brought, and we’ve witnessed first-hand the dramatic loss of trust in business leaders and government.
 
Involve recently commissioned independent research among 180 directors of FTSE 350 leaders and Times Top 1,000 companies, to explore the impact the recession has had on levels of trust. Unsurprisingly, levels have declined over the last year with almost a third of the respondents stating that trust in their organisations’ leaders has decreased.
 
Despite 61% of leaders interviewed feeling that customers had lost confidence in their organisations, our findings show only 43% of respondents feel their organisations are actively involved in generating and maintaining trust. And over a quarter thought their leaders were either ‘not or hardly’ involved in generating trust. 
 
From this research and that of others such as Harvard, Henley and Nottingham University, we concluded that the common four pillars of trust are best defined as reliability, capability, honesty and empathy (ranked in this order of importance by respondents). Yet interestingly, the findings show empathy appears to be the one that makes the most difference. Organisations that demonstrate high levels of empathy with employees report greater profitability, higher levels of customer confidence and fewer redundancies. Caring, listening, acting fairly, putting yourself in others’ shoes, being compassionate – these are the behaviours that appear to generate the most tangible outcomes on the bottom line.
 

Deciding factor
 

These findings come at a time when many organisations have been forced to make redundancies, and with it the real danger that leaders will lose trust during this process because there are other more ‘important’ issues to deal with. However, building and maintaining trust and confidence during the redundancy process will be one of the deciding factors between organisations that succeed, and those that fail. And while any redundancy situation will be painful, there are key things organisations can do to retain the trust and confidence of employees during the process.
 
Employees that leave the company carry the reputation of your organisation with them, therefore it’s crucial they are treated well during the redundancy process. And for the employees that stay, who are presumably key to the organisation’s success, the way the process is handled will make the difference between the organisation’s momentum continuing or declining.
 
Of course HR must work within a legal framework, but there is a degree of flexibility within this – don’t be impersonal and don’t march staff out on the spot with boxes, and treat leavers well during their notice period. Trust works both ways – you can either assume that the people you’re letting go are going to try and get the most out of the business, or you can trust them. If you behave in an untrusting, impersonal manner, those left behind with feel less confident and motivated. Do what’s right and fair and assume no one is going to sue!
 
Honest and open communication is key throughout the redundancy process. For those left behind – it’s natural that they will feel nervous about their own job security and about the future success of the company. The behaviour of the leadership team in this situation is critical. The ‘stayers’ must believe in the future success of the business if they are to continue delivering a capable and reliable service and retain customer trust. If leaders aren’t open, honest, transparent and reliable – the people left behind will lose trust and question if they want to stay working for the organisation, which will result in losing key talent. 
 

Behave correctly
 

Leaders must behave within the four pillars: be reliable – it’s about actions not words; make sure you do what you say you will do. Be capable – deliver on your expertise and promises. Be honest, open and transparent. People respect leaders and organisations that tell them the truth, even if they don’t always like it. And show empathy – care about what your staff think and need; listen to them and put yourself in their shoes.
 
While clear and consistent communication is crucial, at the end of the day it’s not enough to simply send out messages – you need to encourage feedback and maintain dialogue throughout to retain trust. Employees’ main concern will be their job security, but during the early discussions of redundancies, you may not have all the answers. However, it’s essential to let employees know what you do know and what they can control.  In tough times rumours can spread quickly and they are always negative, but employees and leaders can focus on communicating business performance and good results to keep the company moving. 
 
Asking people how they would like things approached is also important – involve people in the changes being made. For example if a team of 20 is now five – involve those five in thinking about how they are going to achieve what needs to be done. Allow employees to challenge leaders, and encourage staff to be proactive. If an employee has a suggestion of a way to avoid making a redundancy in a team, such as by taking pay cuts or working shorter hours – make sure there is a platform for this to be communicated.
 
The role of middle managers is crucial during the process, so make sure they are supported to handle it. Ensure your managers know what you mean by trust and what it feels like. Give them an opportunity to put into practice delivering a ‘trusted briefing’ for example, so that they have a chance to do it and really experience what you mean by trust rather than just have it talked about and shown on a slide deck. In a lot of instances it’s worthwhile getting external companies in to help, however be careful to stay involved and not to detach yourself from the process if you do this.
 
Acting fairly, being compassionate, respectful and empathetic must be applied to each stage of the redundancy process. You have to work at it – it takes time and effort, but ultimately it’s worth it to retain the trust and confidence of your stakeholders.
 
Lorne Armstrong, partner at Involve, the employee engagement specialists
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