Amid a trust recession here are two trends to avoid

A complex operating environment is temping some companies into increasingly questionable practices that may erode employee trust and tarnish their reputation. Two such trends that have recently come to light are "silent layoffs" and "quiet firing." In the case of silent layoffs, companies provide staff with severance packages but ask them to keep the details of their exit confidential. This approach, while intended to minimize negative publicity, can backfire if the news leaks, leading to a breakdown of trust among current employees and the general public.

Similarly, quiet firing involves subtle moves by bosses to make a role less appealing, essentially pushing employees to quit rather than conducting formal layoffs. This tactic can create an "us versus them" mentality within the workplace, fostering a culture of mistrust and disengagement. While these practices may seem like an easy way out for companies looking to restructure or cut costs, they often come at a high price in terms of employee morale and public perception.

Another red flag for investors and regulators is the use of "trust words" in annual reports. A recent study found that companies using words like "ethical," "integrity," and "responsibility" in their 10-K filings were associated with a variety of negative outcomes, including decreased stock interest, higher auditing fees, and a greater likelihood of receiving SEC comment letters.

Rather than conveying trustworthiness, the use of these words may instead highlight potential pitfalls. As companies navigate these challenging times, it is crucial for CEOs to lead with transparency, fostering a culture of open communication and genuine engagement with their employees. By avoiding these questionable practices and prioritizing trust-building, companies can cultivate a more resilient and productive workforce, better positioned to weather the storms ahead.