- Employee confidence is down. Only 45.1% of employees are optimistic about their company’s six-month business outlook, according to the Glassdoor Employee Confidence Index.
- Affected industries. Layoffs are top of mind, particularly in the tech and media industries, where mentions of layoffs in company reviews are up.
- Transparent communication is key. Transparency and consistent communications are key for employers looking to rebuild trust.
Employee confidence hit a new low in February, according to the latest data from the Glassdoor Employee Confidence Index. Only 45.1% of employees are optimistic about their company’s six-month business outlook, down from 45.7% in January and hitting another new low since data tracking began in 2016.
Glassdoor collects tens of thousands of employee ratings of their employers’ six-month business outlook (rated as “positive,” “neutral” or “negative”) each month. The index is the share of U.S. full-time and part-time employees who report a positive six-month business outlook for their employer.
While the decline in employee confidence stretches across all industries Glassdoor tracks, it has hit white-collar industries particularly hard. Compared to one year ago, employee confidence is down 7.1% in the tech sector, 7.2% in media, 7.9% in financial services, 8.9% in management and consulting, 10.4% in telecoms and 12.2% in human resources.
The Glassdoor report pointed to recent major layoffs in the headlines as one source of the persistent employee pessimism, despite other improving economic indicators. Mentions of layoffs are up 4.6 times in tech company reviews and 3.1 times in media company reviews compared to two years ago.
“The overall trend is surprising because we have seen employee confidence continue to reach new lows despite increasing optimism from experts that the economy is heading toward a soft landing,” said Daniel Zhao, lead economist and senior manager on Glassdoor's Economic Research team.
The prevalence of layoff references in employee reviews is even higher now than it was peak-pandemic, according to the data.
This spike reflects a wider shift in employee expectations around company transparency and communication, Zhao said.
“After the crises of the last few years, employees have a different expectation that leaders should communicate quickly and openly, even if they don’t have the answers,” he said.
Rebuilding Trust After Layoffs
Employee confidence affects how engaged employees are in both the short and long term, Zhao said. Short term, employers risk decreased productivity. Long term, they could lose top talent.
“Research shows that when employees lack trust in the organization and experience fear, their innovation, willingness to take risks and desire to go the extra mile can decrease,” said Justin Sun, senior rewards manager at Expedia Group. “Failure to manage employee morale can have a direct adverse impact on business results.”
To rebuild trust, it’s important to recognize employees for their contributions and promote opportunities for continued career growth and development, he said.
“Reminding employees of the way that the company is continuing to invest in them, whether it’s through promotions or internal career movement, can help reassure employees that amid a cost-savings environment, the organization is still committed to their long-term success,” Sun said.
It’s also important to train managers to help retained employees move through the emotional stages that follow layoffs, which come with increased risk of employee turnover, anxiety and burnout, said Karen Mann, senior vice president of HR research, learning and advisory services at McLean & Co.
“Managers need to set clear expectations about work redistribution, help employees close any skill gaps if they are taking on new responsibilities and help them connect the work they are doing back to the organizational purpose to feel fulfilled,” she said.
Transparent Communication and Feedback Loops
When broaching sensitive workplace topics such as layoffs, communicate transparently, early and often, Mann said, and prioritize clarity and empathy.
“Ideally, layoffs are implemented as a last resort, so communicating this to employees — with the data to back it up, where possible — will help to mitigate the erosion of trust that often follows layoffs,” she said.
Employers seeking to build trust can use feedback loops to help them respond to employee needs and sentiments, Mann said. This can be done through pulse surveys with the opportunity for anonymous open-ended feedback, fireside chats, town halls and more.
Enabling employees to ask upper management questions pertaining to the current and future state of the organization can promote psychological safety, Sun said.
“Transparency is the cornerstone of trust within any organization,” he said. “While providing talking points to leaders for these conversations can be helpful, employees want to know that they’re hearing from a real, authentic human being. Ensuring that the message doesn’t sound scripted and that leaders say what they mean — and mean what they say — is critical.”
Editor’s Note: Additional Content
For more information and resources related to this article see the pages below, which offer quick access to all WorldatWork content on these topics:
