If you search the term “Return on investment” (ROI), Google will yield about 330 million results. Almost every substantial business purchase requires a business case to articulate the positive economic impact expected from the purchase. We measure ROI on investments in infrastructure, software, training and more. But what about the ROI that comes from building trust in the workplace? Does a culture of trust or lack thereof have an economic impact on the business?
Stephen M.R. Covey, author of “The Speed of Trust” and keynote speaker at PSNI’s Super Summit, answers with an all caps, “YES!” He maintains that trust in the workplace is not a soft benefit, it’s a significant economic driver. Before we examine his argument more closely, let’s look at how employees feel about the culture of trust in their workplace.
The Current State of Workplace Trust
In 2016, EY conducted their third annual Global Generations research study on trust in the workplace. What they found was striking. Less than half of global professionals trust their employer, boss or colleagues.
· Only 46% place “a great deal of trust” in their employers
· 15% indicate “very little” or “no trust at all”
· 39% say they have “some trust” which isn’t negative but hardly a ringing endorsement
The generation that is the least trusting? Gen Xers. The primary reason Gen Xers cite for their low trust was “unfair employee compensation.”
The top five factors influencing trust in bosses globally are:
1. Is not open/transparent in communication
2. Is not appreciative/does not provide recognition or praise for a job well done
3. Does not communicate with me enough
4. Does not value my point of view
5. Does not make wise business decisions
For more findings from the EY study, take a look at their Trust in the Workplace infographic.
A larger global study, the 2017 Edelman Trust Barometer, asserts that trust is in crisis. Only 38% of US respondents find CEOs to be credible. The global average for CEO credibility is 37%. [Click to Tweet]
How to Create a High-Trust Culture
Great Place to Work, a trust consulting firm, has studied employee trust for 30 years. They found that employees in high-trust workplaces:
- · Believe leaders are credible (i.e., competent, communicative, honest)
- · Believe they are treated with respect as people and professionals
- · Believe the workplace is fundamentally fair
They also found that high-trust companies foster this culture by:
- · Forgiving honest mistakes
- · Involving and including employees in decisions
- · Increasing cooperation
- · Showing appreciation for extra effort
The EY study reveals a similar set of factors that are important to building trust.
- · Delivers on promises (67%)
- · Provides job security (64%)
- · Provides fair compensation and good benefits (63%)
- · Communicates openly/transparently (59%)
- · Provides equal opportunity for pay and promotion and operates ethically (tied at 57%)
Companies operating in a trade deficit may worry that creating a culture of trust is a long-term project or perhaps even impossible. However, Stephen M. R. Covey asserts, “Trust is a learnable leadership skill.” He suggests thinking of trust as a verb instead of a noun. As a noun, trust is the outcome. But as a verb, trust is a competency. “It is a learnable and measurable skill that makes organizations more profitable, people more promotable, and relationships more energizing.”
The Impact of Trust in the Workplace
Covey often shares his theory of a Trust Tax™ and a Trust Dividend™. He writes, “Trust impacts two measurable outcomes: speed and cost. When trust goes down, speed goes down and cost goes up. This creates a Trust Tax. When trust goes up, speed goes up and cost goes down. This creates a Trust Dividend. It’s that simple, that predictable.” [Click to Tweet]
On the positive side, there is considerable evidence to support and quantify the economic impact of building a workplace of trust. In the Business Case for a High-Trust Culture, Great Place to Work shares several outcomes that high-trust companies have achieved. You can track the impact the investment you make in creating a culture of trust against these measurable economic outcomes:
- · Stock market returns
- · Turnover rates
- · Customer satisfaction rating
- · Operating margin
- · Growth rate
- · Productivity
Over the years, Great Place to Work and its partners have tracked these results for high-trust companies.
- · Stock market returns two to three times greater than the market average.
- · Turnover rates that are 50 percent lower than industry competitors.
- · 2.8 to 3.2 points higher customer satisfaction rating.
- · Employees are 3x more likely to report their colleagues are willing to give extra to get the job done.
How to Start
If you’d like to improve trust at your workplace, there are a couple of steps you can take today.
- 1. Assess the current level of trust at your company using the estimator tool in the Great Place to Work Business Case Executive Summary.
- 2. Visit the Speed of Trust web site for videos and resources.