Three Reasons Leadership Transparency Is Mission Critical

November 8, 2017

Believe it or not, employee distrust is pervasive as only half of employees believe their employer is open and upfrontworkplace-1245776_1920 with them according to an American Psychological Association survey. Managers account for up to 70% of variance in employee engagement which is defined as the level at which employees are emotionally invested in, and focused on, creating value for their organizations every day.
Here are three reasons it’s time to build a culture of transparency.

1. Meaningful relationships. When employees quit their jobs, they are essentially breaking up with their bosses. Many simply don’t trust the managers to whom they report and/or have a low opinion of their performance. Leading with transparency means employees are communicated to on a consistent basis so that they understand how their individual roles contribute to the company’s overarching purpose and goals. Human beings are always more trusting of people who communicate openly and honestly by nature.

Leaders who communicate openly and consistently with their employees are applying Dale Carnegie’s 28th Human Relations principle, ‘Give the other person a fine reputation to live up to.’ The by-product is a win-win situation—employees are more trusting of their transparent bosses and they are more likely to model that behavior with their co-workers. Since employees are apprised of company happenings, successes, failures and feedback, they are more likely to feel genuinely valued, vested and compelled to keep others in the loop.

2. Rapid resolution. Problems are solved more quickly when leaders are transparent. Their transparency is an opportunity to apply Mr. Carnegie’s 3rd principle, ‘Arouse in the other person an eager want.’ Because employees are actually made aware of the company’s challenges and problems, they are ultimately given a chance contribute to procuring an ideal solution. Consider sharing company performance and progress reports on a regular basis to highlight issues and encourage employees to propose solutions. Not only is it the right thing to do, but it helps drive accountability and employee engagement levels.

3. Less turnover. Still not convinced leadership transparency is critical to workplace culture? Consider the costs incurred when employees jump ship to any organization’s bottom line. Research conducted by the Center for America Progress revealed that losing an employee can cost anywhere from 16% of their salary for hourly, unsalaried employees, to a whopping 213% of the salary for a highly trained position.

In August 2012, the number of Americans voluntarily leaving their jobs was 2.1 million according to U.S. Bureau of Labor Statistics reports. By August 2016, that number jumped nearly 50% to 3 million workers. An increase in the total count of employees voluntarily leaving their jobs typically signals greater confidence among workers who believe they have more and better options. The bottom line—if your employees don’t trust their leaders, the likelihood of their eventually jumping ship and subsequent turnover costs are extremely high.

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