Development Crossing

Corporate Social Responsibility (CSR) and Sustainability

Why People Don’t Trust Your Company

Public relations firm Edelman has released an annual global survey on trust for the past 14 years, providing a snapshot for how people view governments, leaders, institutions and other entities across the world. For its recently released 2015 Trust Barometer, Edelman processed feedback from 33,000 respondents in 27 countries, and one of the most significant takeaways is the increasingly important role that employees play in building trust.

Overall, the state of trust is poor. Edelman reports that three out of four institutions have lost the global public’s trust, with trust in business, media, and even NGOs suffering over the past year. This has led to the head-scratching result of government being the only institution to experience an uptick (albeit slight) in the past year, driven by improvements in 16 countries. That said, government is still the least trusted institution, with people in 19 out of 27 countries distrusting governments to do what is right.

At the other end of the spectrum, nonprofits are still the most respected institution, but that trust is fading, with nonprofits experiencing a bigger decline in trust than any other institution.

As for business, trust declined for the first time since the Great Recession, with 16 out of 27 countries showing dips in trust. Although still the most trusted industry, the technology industry now has lowered levels of trust, with decreases in the consumer electronics and telecommunications sectors and in technology in general.

If you’re a CEO, you’re at a disadvantage of being the public face of your company’s community relations. The public looks at you with a great deal of skepticism, with only 43 percent believing that you’re a credible spokesperson for your business. Even your own employees don’t trust you all that much, with only 47 percent finding you credible, versus 63 percent of employees who trust information coming from “a regular person just like themselves.”

But employees are a different story. Over the past five years, the Edelman Trust Barometer has shown a steady increase in the credibility of regular employees, and that number continues to rise. In 2009, 47 percent of the public believed that information about a company was credible coming from “a person just like yourself.” This year, that number stands at 62 percent. For “regular employees,” the increase in credibility between 2009 and 2015 has shot up 20 percentage points, from 32 percent to 52 percent.

The survey also showed that treating employees well is one of the most important things a company can do to build trust, with 58 percent of the public viewing this as essential to a company’s credibility. Despite this, only 31 percent of the public believes companies are actually performing against this expectation. Lower on the list of factors that go into trusting businesses are:

  • Creating programs that positively impact the community in which the company operates (45 percent of the public thinks this is important; only 26 percent believe that companies are actually doing this)

  • Addressing society’s needs in its everyday business (45 percent of the public thinks this is important; only 26 percent believe that companies are actually doing this)

  • Partnering with nonprofits, governments and third parties to address societal issues (34 percent of the public thinks this is important; only 21 percent believe companies are actually doing this)

Executives and employees also concur that treating employees well is nearly the top factor in building a company’s credibility, at the same level as listening to the needs and feedback of customers. If you don’t treat your employees well, then other factors on this list - including positively impacting your community, working to protect and improve the environment, and addressing society’s needs - don’t carry as much weight.

Indeed, how a company treats its employees can significantly help or harm the overall trust in the organization. At the top of the list of positive factors that impact trust are respecting employee rights; one of the top negative factors that impact trust are substandard working conditions.

Executives and employees agree that CEOs should build trust in themselves and their companies by regularly engaging with employees about the state of the business. Other trust building exercises include:

  • Telling the truth, regardless of how unpopular and complex it is

  • Communicating clearly and transparently

  • Being front and center during challenging times

  • Being personally involved in supporting charities and good causes

  • Having an active media presence

Given all of this data, Edelman recommends that business leaders take several actions to bolster trust:

  • Increase the trust that employees have in their companies, engage employees regularly on the state of the business, with a focus on CEO transparency underpinned by storytelling that underpins personal commitment.

  • Increase the trust that employees have with their colleagues, engage internal technical experts (such as scientists, engineers and developers) to co-create the company’s innovation story, particularly as it relates to pursuing new ideas that benefit society

  • Increase the trust that employees have amongst the general public, foster a culture of “speaking out” and advocating for the company, especially on topics where employees are highly credible, such as employee experts on working conditions, integrity and business practices, and technical issues.

All of this is fascinating data from Edelman makes compelling recommendations for how to improve the state of trust in business. But I see there’s a missing connection that could bridge several trouble spots for trust: increasing the opportunities for employees to make an impact in their communities.

When company leaders create strong, innovative volunteer and giving programs that fully engage employees, they’re empowering the people who are their best brand ambassadors. What’s more, they’re giving these ambassadors a voice to advocate not simply for the company itself, but for how the company stands in the world for the world.

With the high concern amongst every constituency about how a company treats its employees, robust volunteer and giving programs help address this interest in ways that benefit everyone. Employees are given opportunities to engage with the world on behalf of their companies, and if there are added benefits such as volunteer grant programs, paid time off to volunteer and matching gifts programs, employees are even further validated as contributors to a company’s social mission. Local communities and the public at large see employees as the front face to a company’s cause efforts, and given that employees are one of the most credible sources of information about a company, this can only serve to strengthen the effect of the company’s community outreach.

Seeing employees as the emissaries of a company’s community impact also bolsters the impression that the company is treating its employees well. And of course, the NGOs that are the recipients of a company’s volunteer and giving program benefit from the active philanthropic relationship forged by these efforts.   

The Edelman Trust Barometer observes that businesses have a license to lead for the good of society, and that employees strengthen their credibility to do so. I think that the closer the connection between a company’s role as a good citizen and its employees’ empowerment as the missionaries of this good citizenship, the more that businesses can increase trust in exponential ways.

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