Transparency can drive employee trust—only if it’s done right

In a post-pandemic environment with new employee expectations, transparency is increasingly being looked to as a tool for building trust between leaders and their workforce. In fact, 86% of 14,000 HR and business leaders surveyed across the globe in various industries acknowledge a connection between transparency from leadership and employee trust, according to Deloitte’s 2024 Global Human Capital Trends report released Tuesday.

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Nearly three-quarters of those surveyed said providing more transparency between leadership and the workforce is critically important to the company’s success over the next few years. However, the report points out that transparency must be strategic, or leaders could risk eroding employee trust. This is a “vital” lesson for HR leaders, “as it guides them in handling sensitive information and communication within the organization,” says Art Mazor, Deloitte’s Global Human Capital Practice leader.

Art Mazor
Art Mazor, Deloitte

For example, if leaders share too much information or do so without appropriate context, employees may misinterpret or be confused by the messaging, Mazor notes. Some leaders, for example, openly discuss the firing of employees with those retained; others may encourage open debate about divisive topics without providing a safe and respectful forum for these discussions.

“Missteps can lead to mistrust and reduced employee motivation and productivity, adversely affecting the organization’s overall performance,” Mazor says.

HR professionals can play a crucial role in helping leaders balance the risks and rewards of transparency, as they are often involved in crafting internal communications and relaying employee sentiment to leadership.

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“Understanding the delicate balance of transparency,” Mazor says, “is crucial for HR leaders to foster a positive work environment and drive the organization toward its desired outcomes.”

Creating guideposts for effective transparency

Most employers are in the early stages of enhancing transparency and exploring its implications for trust; after all, the world of work is still adjusting to redefined employee-employer relationships coming out of the pandemic. Meanwhile, new regulatory requirements, such as those surrounding AI and pay equity, are also pushing employers toward strategizing for greater transparency.

As employers head down the path toward more transparent communication with employees, one of the first things they need to consider is what information should be made transparent and why. Then, leaders—including from HR—must determine with whom that information should be shared and how, Mazor explains.

To help leadership meet these challenges, HR can, among other roles, facilitate conversations among workers and leaders to co-create guardrails for transparency. The most responsible transparency practices, Mazor says, are created with both the needs of workers and organizations in mind. For example, an employer looking to create and share better people analytics can allow workers to opt into data collection for specified periods and purposes, he adds.

Such strategic design is key to effectively leveraging the value of transparency with employees, Mazor says. According to Deloitte, employers who can use transparency to build trust are twice as likely to achieve desired business outcomes and 2.4 times more likely to achieve positive human outcomes.  

“Well-managed transparency can build trust, which is a significant driver of both business and human outcomes,” he says.

Dawn Kawamoto, Human Resource Executive
Dawn Kawamoto
Dawn Kawamoto is HR Editor of Human Resource Executive. She is an award-winning journalist who has covered technology business news for such publications as CNET and has covered the HR and careers industry for such organizations as Dice and Built In prior to joining HRE. She can be reached at [email protected] and below on social media.