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Canadian business leaders have work to do when it comes to employee trust, but there’s hope

Canadian business leaders have a big problem: an alarming lack of employee trust.

In the 2023 Proof Strategies CanTrust Index, Canadian employees gave their employers a lackluster “C” grade on their capacity to build trust with external stakeholders for the second consecutive year. This follows a disappointing “D” grade in 2021.

According to a recent Ipsos study, just 30 per cent of the global public trust business leaders to tell the truth. All these findings highlight the urgent need for Canadian executives to prioritize and improve employee trust.

Generational divide

However, it is not just the overall lack of trust that is cause for concern; a generational divide in trust levels has also surfaced. The 2023 CanTrust Index exposes a stark contrast between generations, with only 36 per cent of Gen Zs and 37 per cent of millennials trusting their CEOs or most senior bosses, compared to 46 per cent of Gen X and 48 per cent of boomers.

Corporate scandals and unethical decisions from big business have left younger generations feeling disappointed, fueling mistrust among Canadians who are desperate for progress.

Only 25 per cent of millennials trust large companies to do the right thing.

Younger generations don’t shy away from social issues. Even now, as some US politicians work to advance anti-LGBTQ+ legislation that would make several states less equitable, Gen Zs across the country are staging massive protests by leveraging social media. Young people aren’t afraid to speak up about important issues impacting society and the planet – and expect their business leaders to do the same.

In Canada, Gen Z holds CEOs to a higher standard, with 61 per cent expecting business leaders to actively address pressing societal issues such as climate change, racism, and social equity. In contrast, only 48 per cent of boomers share this expectation.

Trust can be rebuilt

The good news is that trust can be rebuilt. And while it doesn’t happen overnight, the benefits of trust are immensely important to the success of an organization and worth investing in.

Trust encourages teamwork, open communication, and the sharing of ideas. It empowers employees to take risks and contribute their unique perspectives, driving innovation. Trust also builds loyalty, leading to increased engagement and retention. The case for trust is strong, with research showing that trusted companies outperform their peers by up to an astounding 400 per cent.

3 approaches to consider

So how can business leaders cultivate employee trust and bridge the generational divide? There are three key approaches business leaders can consider:

Live by your values and make sure they are known

When employees witness decisions and policies that align with the stated values of the company, trust naturally follows. For instance, if a company’s values prioritize teamwork, collaboration, and innovation, returning to office-based work may be viewed as an opportunity to strengthen these values. However, it is crucial to incorporate flexibility to accommodate values such as trust and autonomy, ensuring that employees have agency over their work environment. Transparently linking decisions to values builds trust by demonstrating a consistent commitment to organizational principles.

Understand the audiences that matter to your organization — and don’t assume they are all the same

Leaders must recognize and appreciate the diversity of their workforce. In today’s multigenerational workplace, with five different generations coexisting, it is essential to understand their unique perspectives and find common ground. By acknowledging and addressing the differences among employees, leaders can establish trust by fostering an inclusive environment that values the contributions and needs of each generation.

Representation also matters greatly. Young people want role models. People they can learn from but also see themselves and their experiences reflected in. In large corporations, representation among senior positions is still lacking for women, visible minorities, Indigenous groups, and members of LGBTQ+ communities. When asked what makes a brand more trustworthy, 56 per cent of millennials said that diversity and inclusion policies do. Business leaders need to make this a priority.

Walk the talk

Walking the talk is essential when it comes to all decisions a business leader makes. In today’s era of heightened transparency, employees are closely observing their leaders’ actions and scrutinizing their credibility. When leaders make promises or commitments internally, such as enhancing benefits or giving regular updates, it is important to follow through and deliver on those promises. This consistency and integrity in their actions builds trust in the workplace. Trust is built from the inside out, and leaders must demonstrate authenticity to foster trust among their employees.

Taking action externally is also key, though. If you live by your values internally but don’t do the same externally, trust may falter – especially among younger employees. For instance, posting messages on social media in support of equity, diversity, and inclusion can be helpful, but if executives fail to translate those words into meaningful action, their credibility and trustworthiness may crumble.

Canadian business leaders have work to do when it comes to earning and maintaining employee trust, but there’s hope. By understanding the differences and finding common ground among the diverse generations in the workforce, living by organizational values, and demonstrating consistency between words and actions, leaders can rebuild trust and foster a more engaged and productive workforce.

Maddy Porter is a senior consultant at Proof Strategies. McCartney Lee is engagement and content specialist at Proof Strategies. The annual Proof Strategies CanTrust Index is a leading source of research and understanding of trust in Canada.