Mind the Gap: How Leaders Can Bridge the Divide and Build Trust With Their People

In today's fast-paced business landscape, 67%?of employees feel disconnected from their leaders (??linked in comments). This disconnect is eroding trust, which directly impacts engagement, retention, and overall performance. As employees increasingly question whether their leaders genuinely have their best interests at heart, the consequences are far-reaching—diminished morale, reduced productivity, and a reluctance to innovate. For leaders, rebuilding and maintaining trust is not just about company culture; it's essential for fostering a resilient, motivated workforce and ensuring long-term organizational success. Failure to address this could jeopardize both talent retention and the organization's future viability.

The Current State of Trust and What's at Stake

I recently spoke with Bhushan Sethi , a partner at 思略特 (PwC’s consulting business) about the current state of trust in the workplace and what’s at stake. He shared that PwC's 2024 Trust survey (??) reveals a significant gap between how leaders and employees perceive trust.

While 86% of executives believe employee trust in them is high, only 67% of employees agree, marking an increasing gap. Trust is especially fragile when it comes to diversity, equity, and inclusion (DEI), as some companies are scaling back on their DEI commitments amid increasing polarization and politicization of the issue. The survey also highlights the impact of trust on employee behavior: 60% of employees have recommended their company as a good place to work because they trusted it. In comparison, 22% have left a company due to trust issues.

Sethi emphasizes that rebuilding trust is crucial for enhancing engagement, productivity, and the employee experience, as well as strengthening a company's external brand, reputation, and role within local communities. Sethi discusses the “Dividend of Trust” (??) and the lasting impact of trust extending far beyond quarterly earnings or analyst ratings, making it a critical investment for long-term success.?

Why Trust is So Low

Gallup's 2023 State of the Global Workplace report (??) highlights that only 23% of employees are engaged in their work, with trust in leadership playing a crucial role. Key drivers of this disengagement include a lack of transparency, ineffective communication, and inconsistent leadership practices. As senior leaders become more isolated in echo chambers, their trustworthiness, empathy, and relevance are compromised, further widening the gap between them and their employees. Let’s explore some of these gaps.

• Gaps in Perception: There is a considerable disconnect between leaders' perceptions of their actions and employees' experiences of them, particularly concerning recognition, support, and engagement. According to Microsoft’s 2023 Work Trend Index (??), while 85% of leaders believe they are fostering an environment that maximizes their effectiveness, only 31% of employees share this sentiment.?

• Clinging to Leadership Styles of the Past: As my favorite executive coach, Marshall Goldsmith says, “What got you here won’t get you there.” Today’s workforce will not bow down to the hierarchy and are not impressed by the aggressive alpha male CEO of the 1980s. These generations have unprecedented access to information, technology, and platforms for influence. Many have been raised with a strong sense of leadership, often being consulted by parents and exerting influence over peers through social media from a young age. They expect to be heard and to collaborate in shaping solutions. For most leaders, this means evolving their approach. In an environment where authority alone is insufficient to inspire followership, effective leadership now demands providing clear context, exemplifying desired behaviors, and leading from a foundation of shared goals.

• A Growing Contrast in Lived Experiences: Over the past several decades, the contrast between the lived experience of those in the C-suite and their employees has grown significantly. Today's diverse workforce contrasts sharply against a leadership demographic that remains predominantly white, educated, and male. Much of the workforce has a second shift of home and caretaking duties outside of their jobs, whereas the average CEO does not. Compounding these issues is the dramatic increase in the CEO-to-worker pay gap (??). While in 1965, CEOs earned about 20 times more than the average employee, by 2022, that ratio had ballooned to 344 times. This stark disparity underscores the growing chasm between those at the top and the broader workforce.?

• Not Making Employees Feel Trusted: PwC's 2024 State of Trust survey found a stark disconnect: while 86% of executives claim they trust their employees, only 60% of employees feel trusted. One of the key lessons from recent years is how hybrid and remote work arrangements have underscored a widespread lack of trust among leaders toward their teams. Practices such as micromanagement, employing surveillance software, and imposing arbitrary office attendance requirements to assess productivity are counterproductive. Monitoring employees' face time, keystrokes, and hours worked actively undermines trust and drives away top talent(??).

• Incongruence: Leaders who fail to uphold their own standards or overlook behaviors that conflict with the organization's values send a dangerous message: that it's acceptable to say one thing and do another. This duplicity erodes trust, reduces credibility, and weakens the very fabric of a healthy workplace culture .?

• A Lack of Transparency: In today’s world, where everyone is a broadcaster, if you don’t provide employees with information and updates as quickly as possible, they’ll see it on social media, eroding trust faster than you can send a tweet. When there is a lack of transparency across the organization about how things work, how the business is doing, or the impacts of upcoming changes, it fosters distrust and heightens anxiety. In a dearth of information, people’s brains start creating stories to make sense of things and these stories are rarely good. Therefore, leaders must prioritize proactive and ongoing communication, particularly during periods of change and uncertainty. Even when answers are not immediately available, acknowledging the gap and committing to provide updates as soon as possible is essential. This level of transparency not only builds trust but also helps to prevent the spread of misinformation within the organization.

• Relying on An Expired Social Contract: The traditional employer-employee relationship, once likened to a first date followed by an unrealistic promise of lifelong loyalty, has become obsolete. Pensions have largely disappeared, wages are often underwhelming, and many companies are quick to resort to layoffs when profits decline. The old social contract has broken down, and continuing to rely on it only amplifies mistrust.?

• Playing the Short Game: While layoffs may sometimes be necessary for a business's survival, their frequency, and handling will either mitigate or worsen the consequences. Beyond the immediate financial impact, layoffs carry significant intangible costs that deeply affect an organization. These include eroded trust, reduced productivity, and long-term damage to the company’s culture. Layoffs not only demoralize those who lose their jobs but also have far-reaching effects on the employees who remain. The company’s brand suffers in the eyes of potential employees and customers, leading to a loss of reputation and loyalty. For the remaining employees, the aftermath often brings survivor guilt, heightened anxiety, and a shift in focus toward finding a job somewhere else. According to Harvard Business Review(??), this environment typically results in a 41% decline in job satisfaction, a 36% decrease in organizational commitment, and a 20% drop in performance.

How Leaders Can Rebuild Trust and Bridge the Divide

While many leaders understand the importance of building trust with their teams, some may see it as a time-consuming or resource-intensive effort. However, I challenge these leaders to view trust as the lubricant that keeps organizational processes and relationships running smoothly. When trust is present, everything functions more efficiently; without it, friction arises, leading to decreased performance and stalled progress. Here’s how you can get started:

• Consistency and Alignment: Leaders build trust by consistently aligning their words with their actions. By reliably fulfilling promises and embodying their values, they establish credibility and reliability, signaling dependability to employees. Sustaining this requires leaders to authentically model expected behaviors, hold themselves accountable, and address shortcomings courageously. This commitment to honesty, integrity, and organizational values fosters a culture of trust, integrity, and respect.

• Listen and Co-Create: One of the most essential trust-building leadership competencies is the ability to listen. According to Gallup research (??), employees who believe their leader is willing to listen are over four times more likely to trust them. In conversation with Bhushan Sethi , he advised leaders to return to the fundamentals: step out and genuinely listen to their people. Take the time to understand their concerns, identify where trust has been eroded, and explore avenues for rebuilding it. Involve your team in generating ideas to strengthen trust. Finally, Sethi emphasized the importance of transparency—being clear about what you can and will address, as well as what you won't.

• Advocate: Even when leaders are unable to alter certain aspects of the organizational structure—such as rigid promotion processes, perceived biases in performance management, or the sense that the company only pays lip service to its values—Sethi offers (??) that they can still build trust with employees by advocating on their behalf. By voicing concerns to senior executives and highlighting how current programs, investments, or decisions are affecting employee trust, leaders can demonstrate their commitment to their teams and strengthen the trust that‘s essential for organizational success.

• Get Curious and Build Relationships With Your People: Given that the majority of CEOs are wealthy, educated white men, it is particularly important for them to understand the experiences of employees who differ from them in race, gender, socioeconomic background, and/or caregiving responsibilities. However, a Harvard Business School study (??) found that CEOs typically spend just 6% of their time with frontline teams, 3% with customers, and 72% in meetings, leaving them at risk of becoming disconnected from the realities their employees and customers face. To bridge this gap, Bill George , former CEO of Medtronic, recommends?CEOs dedicate 30% of their time to frontline engagement (??). This increased involvement not only motivates employees and fosters a sense of ownership but also provides leaders with valuable insights into customer needs and the broader organization—perspectives they might otherwise miss.

• Default To a High-Trust Environment: Trust is reciprocal; leaders who prioritize it and empower their employees with flexibility, autonomy, and accountability create a virtuous cycle of trust and performance. Granting autonomy and decision-making power to team members signals confidence in their abilities while holding them accountable reinforces a strong sense of responsibility. Equally important is cultivating a supportive environment where mistakes are seen as opportunities for growth rather than failures. This approach encourages risk-taking and innovation, further deepening trust and enhancing team performance.

• Nail the Moments That Matter: When companies approach difficult decisions—such as layoffs, organizational change, or moments of crisis—with empathy, transparency, and respect, they can maintain, and even build, trust. The way businesses and leaders conduct themselves during these times leaves a lasting impression on those affected and the broader marketplace, shaping perceptions for years to come. Executing effective change management during these times of transformation and uncertainty is crucial. A prime example is Airbnb CEO Brian Chesky 's May 2020 letter to employees(??), which serves as a masterclass in conducting layoffs with dignity. This approach should be studied in every MBA program. Chesky took full responsibility for the decision, providing clear context on how the layoffs were determined, including the data and reasoning behind it. He demonstrated empathy, humility, and vulnerability, which earned respect and even goodwill from those losing their jobs. The company also extended generous severance packages, benefits, and support services, including a talent directory, and placement assistance, and even allowed departing employees to keep their laptops. Chesky expressed deep gratitude for the contributions of those being laid off and made it unequivocally clear that the decision was driven by the challenging business environment, not by the employees' performance or abilities. This approach not only helped preserve the dignity of those affected but also fostered a sense of respect and trust in the organization during a very difficult time.

• Authenticity: A recent Harvard Business Review study (??) revealed that 85% of employees consider authenticity the most essential quality in a leader or manager. Authentic leaders build trust by connecting with others on a human level, cultivating relatability and transparency. This could be as simple as admitting in a meeting that you don’t have the answer to a question, openly sharing with your team that you’re experiencing a challenging mental health week, or expressing your enthusiasm for pickleball. When leaders are genuine, they allow others to see them as human, which fosters trust and likability. By sharing personal stories, discussing challenges, and creating opportunities for meaningful interactions, leaders can deepen connections and strengthen trust.

Trust is the cornerstone of high performance and organizational success, and is essential for attracting, unlocking, and retaining top talent. To build trust, leaders must consistently align their actions with their words, demonstrate genuine intentions, communicate transparently, and actively listen to their teams. This includes embodying competence, care, and integrity, as well as advocating for their teams, directly engaging with frontline employees, and responding empathetically during critical moments.

How do you build trust with your team?