New research highlights rising employee disillusionment, driven by inequality, mistrust and a sense of powerlessness. By taking steps to rebuild trust and strengthen cohesion, HR can play a key role in reversing this trend.

Widespread disillusionment is damaging trust and weakening workplace culture, according to a recent report.

This year’s Edelman Trust Barometer shows 61 per cent of respondents globally have a moderate or high sense of grievance, which is defined as a belief that government and business make their lives harder and serve narrow interests.

Meanwhile, the number of employees who say they trust their employer to do what’s right has dropped to 75 per cent – a three-point decrease from last year.

The data also indicates an overwhelming sense of pessimism among the workforce; just 36 per cent of respondents believe that things will be better for the next generation.

When people lose trust in institutions, that mistrust often carries over into the workplace, eroding morale, collaboration and loyalty, says Dr Kelly Kirkland, Research Fellow at the University of Queensland’s School of Psychology.

“People are feeling disillusioned with the current state of the world, and are feeling as though they’re not being prioritised by institutions and governments in an environment where they’re really struggling,” she says.

“And in those environments, it’s very easy for distrust in leadership and organisations to breed.”

What’s driving disillusionment?

Edelman identified economic inequality as a critical driver of disillusionment and mistrust. Those in the lowest quarter of income are almost 15 percentage points less likely to trust institutions and government, and around two-thirds of respondents agree that the wealthy’s selfishness causes many of their problems.

The impact of the widening wealth gap in Australia and globally runs far deeper than we might imagine, says Kirkland.

“High inequality can breed conspiratorial thinking,” she says. “When you have those stark differences emerging, people no longer feel like there’s one nice, cohesive group in society they can relate to. Rather, it feels like there are two distinct groups forming – one which is those who are more privileged by the system, and the other those who aren’t so privileged.”

This fractured sense of belonging often mirrors how employees feel inside their own organisations, she adds.

“When you have a hierarchy among your employees, those who are in that bottom group no longer feel as though there’s this shared organisational identity. And that naturally breeds the sense that not only are we different from ‘them up there’, but also that they are actually actively working against our welfare down here.”

This is backed up by Edelman’s findings, which showed that 68 per cent of respondents believe that business leaders purposely mislead people – the highest percentage on record since this report series began.

The compounding sense of disillusionment poses a real risk to employee engagement, loyalty and productivity. As a result, leaders and HR teams need to focus on rebuilding a sense of shared identity – one where every employee feels recognised, included and connected to the organisation’s purpose. Without that foundation, the divide between staff and leadership is likely to widen even further, says Kirkland.

“People need to know what you’re doing and why you’re doing it. When people don’t have the answers, they naturally start to assume the worst.” – Dr Kelly Kirkland, Research Fellow at the University of Queensland’s School of Psychology

Four strategies to combat disillusionment

Below, Kirkland unpacks four strategies employers can use to combat workforce disillusionment and reverse the concerning trends revealed in Edelman’s research. 

1. Create appropriate outlets for dissent

Disillusionment often festers when left unspoken, says Kirkland. As a result, one of the most powerful first steps leaders can take is simply to listen.

“Often, the most important thing people want to see is acknowledgement of the hardship that they might be experiencing,” she says. “They want to feel as though the leaders of their organisation know what they’re going through.”

Open discussions around grievances are not seen as a nice-to-have by employees. In fact, four in five of Edelman’s respondents felt that businesses are obligated to facilitate discussions about contentious issues.

Open forums such as town hall meetings can be very effective in ensuring these conversations stay constructive, says Kirkland.

“No workplace is ever going to achieve 100 per cent cohesion, where everyone is happy with how everything is going,” she says. “There are always going to be people in the workplace who want things to change in some way, shape or form. So it’s always very important for workplaces to have appropriate outlets for people to be able to engage in less hostile forms of dissent.”

2. Address grievances transparently

Once you are aware of the grievances that are contributing to disillusionment, it’s imperative to follow up and demonstrate action, says Kirkland. Failing to do so will only serve to exacerbate employee mistrust.

“Actions speak louder than words…. People need to feel that not only have they been listened to, but that the [employer] has at least tried to do something about it,” she says.

Taking action based on an employee’s input also gives them a sense of agency, which can help rebuild a sense of a shared organisational identity.

“Building up that idea of shared power by making people feel as though they have some control and ability to affect the organisation in some way also helps build up the feeling of purpose,” says Kirkland.

Especially considering that many employee grievances relate to the broader social environment and are difficult for employers to resolve fully, it’s just as important to be transparent about why you’re not taking certain actions as well as why you are taking others, she adds.

“You can only build trust through transparency. People need to know what you’re doing and why you’re doing it. When people don’t have the answers, they naturally start to assume the worst.”

3. Provide a sense of career security

Compounding employee disillusionment, Edelman’s report highlights increasing fear among employees about losing their jobs due to forces like globalisation, economic instability and emerging technology.

Fifty-eight per cent of respondents now feel their jobs are threatened by automation (up from 53 per cent last year), and the same percentage report that a lack of training is putting their job security at risk. 

This is one area where strategic action on the part of employers can have a huge impact on overall optimism and wellbeing, says Kirkland.

“Anything an employer can do to make people feel good about their future will be beneficial, because it gives them that sense of security among all of the chaos that’s happening in the world,” she says.

Fostering a sense of career security might look like boosting upskilling efforts to ensure employees are equipped with a relevant, up-to-date skill set, she says. Increasing training investment in AI and automation will also demystify these technologies and help employees see them as a support tool rather than a competitor.

“It might also mean making pathways for mobility in the workplace easier and more accessible, or mapping out [career plans] for people so they can envision their future and the changes they might be able to make to get there,” she says.

4. Approach societal issues cautiously

Against a turbulent political backdrop, employers have been under increasing pressure in recent years to take a stance on societal issues. 

Edelman’s research shows many employees are on board with corporate advocacy; around three-quarters say CEOs are justified in addressing a social issue if they could make a major impact on the challenge or if doing so would improve business performance.

However, when addressing a contentious issue, Kirkland advises leaders to tread carefully and be clear on their intentions.

“There’s a risk in taking an active stance on a moral issue,” she says. “If you have a diverse workforce with diverse opinions, some people are going to feel like their organisation might no longer represent them. And then you’re going to lose that sense of shared identity.”

Instead of defaulting to silence or performative gestures, she recommends grounding your actions in your organisation’s core values and purpose.

“If you have a strong, broader sense of who you are as an organisation, that can make people feel connected, even though they may hold very different views,” she says.

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