Introduction

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According to Mercer's 2024 Global Talent Trends report, employee trust in employers is on a downward trend, with only 69% of employees believing their employers will act in their best interests. This represents a significant drop from the 80% trust level recorded in 2022.

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The decline in trust isn't limited to the workplace; it reflects a broader trend across society in the 21st century. Much of this general mistrust can be linked to how information is proliferated and consumed through social media, leading to an erosion of trust in knowledge. While reversing societal trends might be beyond our reach, HR teams play a crucial role in preventing the erosion of employee trust.

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Why is employee trust important?

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Employee Retention

Employees who trust their employers are more likely to stay, reducing the costs associated with recruitment and fostering a stronger, more cohesive culture with lower turnover. Considering analyst estimates that employee turnover can cost up to twice the departing employee’s salary, the financial impact of retention issues can be substantial.

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Culture

Trust fosters an environment where employees feel comfortable providing feedback, facilitating organizational growth. Furthermore, employees who trust their employers tend to have better well-being, leading to improved productivity and stronger business results.

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Improving Employee Trust

Adopting a robust compensation philosophy and embracing pay transparency can significantly enhance employee trust. Establishing fair, equitable, and consistent compensation practices demonstrates to employees that their welfare is a priority.

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At Assemble, we've observed firsthand the positive impact of these practices on employee trust. For instance, Wisp faced challenges with trust around compensation until the introduction of the Assemble Employee Portal. This initiative led to a shift from a majority questioning their pay fairness to 75% believing in the fairness of their compensation.

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For further insights, explore our case study with Wisp.

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Even for organizations not ready to fully embrace pay transparency, sharing the compensation philosophy can build confidence among employees, paving the way for future transparency.

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Conclusion

While the erosion of societal trust poses challenges, HR teams have a toolkit to ensure employee satisfaction, productivity, and engagement. Establishing a solid compensation philosophy and moving towards pay transparency are pivotal steps in building a successful, trustworthy workplace.

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