A Matter of Trust: Keeping the faith of your workforce in bad times

As tumultuous as 2008 was, the current year is likely to be the most challenging that employers have faced in a long time. Naturally, with economic conditions around the world continuing to remain fragile, many organizations are simply focusing on the challenges of surviving.

And often, that survival instinct in the face of economic pressures can mean that businesses respond with panic, resulting in job cuts, recruitment freezes, slashed training spending, and renegotiated or diminished benefits. However, in times like these, organizations need the skills, knowledge and talent of an engaged workforce to both survive and optimize opportunities. Moreover, it is equally important to look beyond the near future and be prepared to capitalize on recovery. In order to be prepared, an organization's leadership must work to maintain its employees' trust.

What is trust?

As a concept, trust may be difficult to define, but we all recognize it, feel it, and know it when we see it. And just as trust is crucial to the success and long-term maintenance of personal relationships, so it is to the health of a commitment between employee and employer.

According to Dr. Duane C. Tway, Jr. in his 1993 dissertation, A Construct of Trust, trust is "the state of readiness for unguarded interaction with someone or something". Tway theorizes trust to be made up of three important components:

1. the capacity for trusting: total life experiences have contributed to an individual's willingness to risk trusting others
2. the perception of competence: how employees view their own abilities and the abilities of their colleagues to rise to the challenge and perform effectively no matter the situation
3. the perception of intentions: actions, words, direction, mission, or decisions are motivated by mutually-serving rather than self-serving motives.

So what happens when trust is eroded between employee and employer? Disengagement ensues, productivity declines, and retention issues result. During tough and stressful economic times, the importance of trust is greater than ever.

Breaking Trust

The challenge is to maintain this trust when workers themselves are worried about the economic downturn. The fear of recession and its psychological impact threatens to break the bonds of trust between employer and employee.

And clearly, fear exists. Among 2,670 Canadian respondents in the latest POLLARA Financial Outlook Survey, 91% feel the economy is in a recession. And in terms of the future, 57% believe the economy will worsen in the next 12 months, with half expecting an increase in inflation and taxes.

As well, Ceridian's international research shows that workers are already deeply affected by the global picture. It also shows that employers have not made the best start in maintaining trust. Significant numbers of employees exhibit various signs of deteriorating trust:

• A significant number say their organizations have already cut jobs as a result of the downturn.
• Many individuals working for companies that have made redundancies say this has put pressure on the stated values of the business.
• A growing number do not trust their bosses sufficiently to have an honest conversation about the impact that recession might have on job security.
• Many say they would stay in a job they did not enjoy until business conditions improved. However, the vast majority state they would find another job within six months if they had to, suggesting that many could become more willing to leave their current job when the upturn arrives.

Clearly, the process of breaking an employee's faith in the values of their organization has begun. However, interestingly enough, the POLLARA survey found that although the vast majority is very pessimistic about the economy (91% believe Canada to be a recession), only 31% feel they will be personally affected by the downturn. Although an apparent disconnect, could this personal confidence be the reason that research also shows that a loss of trust in the organization can lead to the loss of the best employees when an upturn arrives?

While the research illustrates the severity of the situation, it also points the way to priorities and strategies for making the most of the economic climate. Organizations must make certain that their employees believe in the organization and its leaders. They must use their people policies to inspire the trust of all their stakeholders—current staff, managers, customers, future recruits, and shareholders. According to Jim Thomson, VP, HR Operations at Ceridian Canada, "Agile people policies — clearly communicated — will strengthen the bond of engagement between employees and their organization."

Building and Maintaining Trust with Existing Staff

Leadership is never more important than when times are tough — and the roles of the executive leadership team and front-line managers become even more critical than during flush periods.

In particular, leaders and managers need to communicate clearly, honestly and regularly — and deliver a consistent message. They must be open about how the business is performing and be clear about the numbers. Employees can tell how a business is doing in hard times; if what leaders say doesn't match what employees see, it will only diminish their trust and confidence in the future. And while normal lines of communication are important, face-to-face communication is the best and most reassuring method during economic downturns.

Communication should also be two-way. Whatever form that communication takes, it's an opportunity to involve employees in decision-making and in finding solutions. In fact, hard times are fertile ground for innovative ideas that might not otherwise be suggested or considered. Ideas put into action can generate immediate savings — a highly desirable alternative to cutting jobs.

While pay raises are likely out of the question for existing staff, it's important to look at other benefits as a means of maintaining trust and engagement. Two strategies include tailoring benefits to individual needs in a way that doesn't increase cost, and looking at non pay-related benefits like flexible work times or working from home.

And while some organizations are quick to abandon Employee Assistance Programs (EAPs), they are often most valuable during a downturn. It's during such times that employees most need support and confidence in order to navigate the choppy waters of a recession. It is also an initiative that can stop minor problems from becoming major issues.

Building Trust by Developing Skills

Leading employers know that reduced spending for training is a short-term, short-sighted response. In fact, training can be a key element of any recession strategy. This is especially true when a hiring freeze is in place, and skills and expertise must be tapped from within the existing workforce.

A carefully thought-out learning and development (L&D) strategy can deliver short-term savings without compromising longer term business capability. Not only that, it sends a powerful signal in a crisis that an organization is still very much invested in the development of its people. It acts as a great motivator and goes a long way toward maintaining workforce engagement.

A strategic approach to L&D enables a business to control training expenditures without losing sight of the people and skills required. This means reviewing existing L&D provisions to differentiate between must-have and nice-to-have. It can also mean other strategies, such as encouraging networking within the business, as well as building a coaching culture that strengthens knowledge-sharing and helps develop leadership capability.

Building Trust Among Potential Recruits

During times of economic downturn, leading organizations understand the need to have a pipeline of talent, ready and waiting for when times improve. It is forward-thinking employers who seize the opportunity to strengthen the talent pool in the midst of a weak economy. It's also vital that employers take a strategic look at their short, medium, and long-term recruitment requirements, and focus on the skills and talents needed.

A review of recruitment methods may identify the need to follow the recruitment industry migration online, as well as other creative solutions. A reassessment of recruitment suppliers can help to secure more favourable terms, but can also provide opportunities to leverage experience with similar economic conditions in the past. Of course, revisiting internal systems — including recruitment technology — is always valuable.

Finally, maintaining a strong, visible employer brand during a downturn spells confidence to the outside world; it tells existing staff and potential recruits that the organization is planning for a positive future.

Building Trust with the Senior Management Team

If strategies for building and maintaining trust are to work effectively, they must have the support of the senior leadership team. However, given the pressure currently on most businesses, it is likely that CEOs and financial directors will be looking for the extra value they can leverage from their people management strategy. For those in charge of people policy within an organization, this means developing a strategy that is focused on business performance. At the same time, any strategy for building trust must respond to short-term changes inevitable in a recession without compromising the longer-term aims of the business.

It is important to demonstrate to the senior leadership team that well-being initiatives such as wellness campaigns or Employee Assistance Programs can be used to develop a more resilient workforce able to cope with the stresses and extra workload that recession brings.

It is also important to ensure the quality of "people" data during such times. Senior leaders need to be able to trust the quality of management information that comes their way. This means developing a simple set of metrics that can reliably measure the efficiency, effectiveness and business impact of people policies.

Successful people management in a recession does not mean the implementation of drastic, poorly thought-out initiatives. It is simply a matter of doing what has always been done — only better, and with a sharper focus on business needs. This is the best way of delivering leadership that will inspire employees to keep faith with the organization, even if they are uncertain about their own future in the business.

As Jim Thomson, VP, HR Operations at Ceridian Canada explains, "Global conditions may have gotten businesses into the current economic downturn — but it is their people who will get them out of it."

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