Apr 104 min read

Bridging the Trust Gap: Why Trust Matters and How To Build it

A recent survey from PwC (2024) indicates that executives overestimate the amount their employees and customers trust them and their organization. The disparity between executives' perception of trust and its actual levels within organizations underscores the need for a strategic approach to cultivating trust for internal and external organizational success. Below we examine key findings from PwC’s 2024 Trust Survey, and related research, and share vital statistics most impactful for executive coaches and their clients today.

The Gaps

PwC identified several “trust gaps” between how executives believe they are trusted and how they actually are. Consider the following statistics from PwC’s 2024 Trust Survey:

90% of executives believe customers highly trust their business. In reality, only 30% do (PwC, 2024)
“86% of executives report highly trusting their employees.” However, only 60% of employees feel highly trusted (PwC, 2024)
“86% of business executives think employees highly trust their business.” However, only 67% trust their business (PwC, 2024)

The Essence of Trust in Business

Several studies reveal that trust is essential in coaching (Fitouri & Zouaoui, 2023; Passmore & Lai, 2019; Pandolfi, 2020). PwC’s survey echoes this finding and states that trust is also essential for productivity, efficiency, profitability, stakeholder relations, customer loyalty, and employee engagement (PwC, 2024).

Productivity

Slack reports that trusted employees are twice as productive as those not trusted (Slack, 2023)
42% of executives in PwC’s study cited productivity as the biggest risk of employees not trusting their employer (2024).
61% of employees who don’t feel trusted report a negative impact on their job performance (PwC, 2024)
Employees who trust their employer” report being “more motivated to work” (Reichheld & Dunlop, 2022)

Stakeholder Relations

“41% of executives say the cost of capital is at risk if investors don't trust their company” (PwC, 2024)

Customer Loyalty

Over 60% of customers will recommend brands they trust to friends and family (PwC, 2024)
Over 40% of consumers will purchase more from trusted companies or alternatively stop purchasing from a company they no longer trust (PwC, 2024)
Over a quarter of consumers will pay more for goods and services from brands they trust (PwC, 2024)
When consumers trust a brand they are “88% more likely to buy again” (Reichheld & Dunlop, 2022)

Employee Engagement

Employees who feel trusted report being over twice as focused as their non-trusted counterparts (Slack, 2023)
Trusted employees also report being 4.3 times more likely to find “overall satisfaction” in their work (Slack, 2023)
22% of employees have left an employer due to lack of trust (PwC, 2024)

Crafting a Trust-Centric Culture

Building trust entails safeguarding data, ensuring equitable treatment and compensation, flexibility, and inclusivity in decision-making processes. It also necessitates a commitment to transparency, particularly concerning environmental and ethical practices (PwC, 2024).

Building Employee Trust—What Employees Want

77% fair pay and treatment (PwC, 2024)
72% data protection & ethical behavior (PwC, 2024)
71% request flexibility regarding when and where work is done (PwC, 2024)
83% involving employees in “major decision-making” (PwC, 2024)
Increased transparency during decision-making (Slack, 2023)
Knowing employee feedback is taken into account (Slack, 2023)
Enhancing transparency regarding environmental impacts and AI governance policies (PwC, 2024)

Building Customer Trust—What Customers Want

79% Data protection (PwC, 2024)
74% Quick issue resolutions (PwC, 2024)
73% consistent and reliable customer experience (PwC, 2024)
Transparency regarding environmental impacts and responsible AI practices (PwC, 2024)
Fair treatment, kindness, and empathy towards consumers (Richheld & Dunlop, 2022)
Transparent “motives and choices” (Reichheld & Dunlop, 2022)
High-quality goods and services (Reichheld & Dunlop, 2022)
Consistent and dependable, “delivers on promises” (Reichheld & Dunlop, 2022)

Building Stakeholder Trust—What Stakeholders Want

Much of what employees and customers want (clarity, communication, ethical behavior) is similar to what stakeholders need to increase trust. Consider the following findings:

Clear, consistent, and strategic communication (PwC, 2024)
Empathy and understanding of stakeholders wants and needs (Young, 2023)
Regular basis of stakeholder engagement (PwC, 2024 & Young, 2023)
Taking responsibility for mistakes and commitments (Young, 2023)
Transparency about environmental actions and AI governance (PwC, 2024)
Proactive and candid disclosures (PwC, 2024)
Creating opportunities for feedback (Young, 2023)

The main takeaway

PwC's 2024 Trust Survey reveals a critical insight for organizations: the need to bridge the trust gap between executives' perceptions and the actual trust levels of employees and customers. By implementing strategies focused on transparency, fair treatment, and stakeholder engagement, companies can foster a culture of trust that is crucial for achieving sustainable success and a competitive advantage. This journey towards building a trust-centric culture not only enhances organizational performance but also solidifies loyalty and trust across all stakeholder groups, ultimately contributing to a thriving, trust-based corporate ecosystem.

Read the original PwC survey here.

References

Fitouri, M., & Zouaoui, S. K. (2023). Analysis of the impact of the psychological contract, commitment and trust on the effectiveness of business coaching: Perspectives for success. Research Square (Research Square). https://doi.org/10.21203/rs.3.rs-3048963/v1

Pandolfi, C. (2020). Active ingredients in executive coaching: A systematic literature review. International Coaching Psychology Review, 15(2), 6-30.

Passmore, J., & Lai, Y. (2019). Coaching psychology: Exploring definitions and research contribution to practice? International Coaching Psychology Review, 14(2), 69–83. https://doi.org/10.53841/bpsicpr.2019.14.2.69

PricewaterhouseCoopers. (2024). Trust in US Business Survey. PwC. https://www.pwc.com/us/en/library/trust-in-business-survey.html

Reichheld, A., & Dunlop, A. (2022, November 1). 4 Questions to measure — and boost — customer trust. Harvard Business Review. https://hbr.org/2022/11/4-questions-to-measure-and-boost-customer-trust

Slack. (2023). New research reveals trust is the key driver of productivity. Slack. https://slack.com/blog/news/future-of-work-research-summer-2023

Young, D. (2023, October 2). How to build trust with stakeholders for better outcomes. Mural. https://www.mural.co/blog/stakeholder-trust