The transparency paradox: Could less be more when it comes to trust?
Greater transparency can help organizations build trust—or erode it. What considerations should leaders keep in mind to ensure transparency is helping and not hindering?
Jason Flynn
Sue Cantrell
David Mallon
Lauren Kirby
Nic Scoble-Williams
Trust matters: It is the unseen, ineffable glue that holds relationships together and allows organizations, workers, and communities to flourish. Trust between workers and organizations has potentially never been more important, but for many organizations, how to build and sustain it has remained elusive.
Transparency is commonly thought to be a key driver of trust; the idea that more transparency equals more trust has become a truism. Eighty-six percent of leaders surveyed in our 2024 Global Human Capital Trends research say that the more transparent the organization is, the greater the workforce trust. It’s not an altogether incorrect assumption: Research shows that some forms of transparency do, in fact, drive trust. Deloitte research, for example, found that transparency—defined as an employer using straightforward and plain language to share information, motives, and decisions that matter to workers—is a key dimension of trust.1 Sharing information about decisions, results, strategies, and practices freely with workers, customers, investors, and other stakeholders is generally thought of as a good thing.2
But it’s not that simple. The relationship between trust and transparency is much more complicated and nuanced. “Trust is really important to us,” Sara Armbruster, chief executive officer of furniture company Steelcase told us in a recent conversation. “In many ways, transparency goes hand in hand with that. But if you are going to advocate and implement a high degree of transparency, you need to have systems in place to address any issues that arise.”
Some organizations are discovering that mishandling transparency can severely undermine trust. In an organizational context, transparency is usually thought of as information flowing from a leadership team to everyone else. But new digital advances mean that transparency also exists inside teams, and worker information can be made transparent too. Today, technology can make almost everything and everyone in an organization transparent to almost anyone else. As they increasingly interact with smart machines, workers leave an ever-expanding trail of data that can be analyzed using artificial intelligence and shared at negligible cost. The data may encompass virtually anything that happens in an organization:
- Workers’ time at their keyboards, actions taken, and effectiveness
- Worker motivations and sentiment
- A worker’s emotional tone while interacting with a customer or colleague
- Movements and interactions on a factory floor
- The distance and route covered by a driver
- Worker behaviors related to organizational culture, belonging, and inclusion
- The physical safety of workers in the field
- What topics are being discussed, by whom, on what channels and when
If transparency used to mean that leaders could shine lights on particular aspects of an organization, now it means the organization can be illuminated in every corner—for any audience.
Leaders may find this degree of transparency alluring. It offers microscopic visibility into the workings of their organizations and their people. But this newly available transparency can be both a gold mine and a land mine. On the one hand, if responsibly managed, the ability to use this kind of transparency can create new opportunities to measure and unlock human performance, creating shared value for both individual workers and organizations. On the other hand, there is significant potential for misuse—for example, privacy breaches, AI-driven surveillance, and efforts to control workers’ every move.
If transparency used to mean that leaders could shine lights on particular aspects of an organization, now it means the organization can be illuminated in every corner—for any audience.
New transparency-enabling technologies can give leaders a set of enormously powerful tools (figure 2). And according to Deloitte’s Quantified Organization research, many workers and organizations are surprisingly aligned on some of the positive possibilities these tools can bring; both agree that a variety of newly transparent data can help to improve everything from worker performance and job satisfaction, to worker safety and career development, to improved innovation and organizational agility.3
But using this new data effectively requires a sophisticated understanding of the relationship between transparency and trust. Understanding this relationship is becoming more important; 86% of workers surveyed and 74% of leaders surveyed in our research say an increasing focus on trust and transparency in the relationship between workers and the organization is very or critically important. In fact, this trend is ranked highest in terms of importance of the seven trends studied in our survey and was identified as the trend that would have the greatest impact on an organization’s success, both this year and in the next three years.
An increasing focus on trust and transparency was identified as the trend that would have the greatest impact on an organization’s success, both this year and in the next three years.
Leaders—in collaboration with workers—should consider important questions around what information to make transparent, why, whose information should be revealed, and to whom and how.
The essential role of trust
Like transparency, trust is a two-way street4—there is worker trust in leadership, and there is leadership trust in workers.
In psychology and sociology, trust is often defined as a belief that the other party won’t cause harm, and that one can rely on another to act in a way that is beneficial, honest, fair, and reliable. At its heart, trust involves a willingness to be vulnerable and to depend on others for mutual cooperation and benefit—a belief that people will act in each other’s best interest.5 But to be mutually vulnerable, people typically need to feel empathy and psychological safety. While there are many components that drive trust, Deloitte defines trust as the outcome of high competence and positive intent, underpinned by capability, reliability, humanity, and transparency.6
The four factors of trust
Based on over 400,000 survey responses with customers and workers across nearly 500 brands, in-depth focus groups, conversations with leaders committed to building trust, and case studies exploring situations when trust was won or lost, Deloitte distills trust down to four factors:7
- Humanity: Demonstrating empathy and kindness and treating everyone fairly
- Capability: Creating quality experiences, products, and/or services
- Reliability: Consistently delivering on promises and experiences
- Transparency: Openly sharing information, motives, and actions in straightforward and plain language
Trust has always been important to organizational success, and it seems to grow more so by the year.
- Deloitte research shows that companies deemed “trustworthy” tend to outperform their competitors by up to four times, measured by market value.8
- Shares of companies graded trustworthy by Trust Across America and the Initiative on Quality Shareholders have outperformed the S&P 500 by 30% to 50% over recent five-year periods.9
- Workers in high-trust companies are 50% less likely to leave, 180% more likely to be motivated, are 140% more likely to take on extra responsibilities, and are generally more productive, more satisfied with their jobs, and healthier.10
A confluence of trends today is putting trust at risk. Information and misinformation are omnipresent, perceptions often supersede facts, and digital security and data privacy are commonly at risk. These trends expose people to the possibility that private or inaccurate information may be exposed in ways that harm them, making many cautious about extending trust to organizations. Meanwhile, turbulence related to outsourcing, mergers, downsizing, shifting business models, digital transformation, return to office, and other changes, can create a breeding ground for distrust among workers. Other factors that tend to impact trust include:
- Increasing uncertainty for organizations and workers: The less people know what to expect, the more they rely on trust to feel safe.
- Disappearance of traditional boundaries: As many traditional boundaries of work and the workplace continue to erode, trust, perhaps even more than culture, is emerging as a tie that binds—a means to keep the organization cohesive and mission-aligned. Especially as organizations grapple with questions around what defines a job and how a workforce should operate in a boundaryless world, trust can create a common foundation for decision-making.
- Generative AI and other forms of automation: As technology automates rote tasks, human capabilities such as empathy and curiosity can increasingly differentiate leading organizations from the rest—and to express these capabilities, workers will need to trust the organization to use their work for mutually beneficial purposes. It’s worth noting that AI itself faces a trust deficit: Deloitte research reveals that workers can perceive employers as much as 2.3 times less empathetic and human when AI tools are offered.11
Amid these challenges, workforce trust may be even more important than employee engagement when it comes to navigating relationships. Many organizations use employee engagement as a proxy to measure the worker-organization relationship. Trust, however, may be a better measure for this relationship. Engagement simply measures workers’ willingness to extend themselves on their organization’s behalf, not the degree to which they trust an organization to support their interests. Trust, on the other hand, may be a better metric to evaluate whether workers are getting what they need from their relationship with the organization.
What we mean when we talk about transparency
Transparency is in vogue. Demands for visibility into pay, for example, have led to pay-range transparency laws in eight states in the United States,12 where pay transparency in job postings has more than doubled since 2020,13 and globally, where pay transparency also continues to increase over time.14 Meanwhile, employers are increasingly sharing other information they once kept private. For example, Patagonia revealed its external supply chain to show consumers its commitment to climate change,15 and Asana publishes the minutes from its board meetings for workers so they’ll have clarity on the organization’s strategic priorities.16 Some organizations even allow anyone at the organization to access things like financial records to the minutes or recordings of meetings among executives so they can weigh in on organizational direction and decision-making.
Signals your organization should think more carefully about transparency
- Your organization is rapidly adopting transparency technologies (for example, sensors and connected devices; analytics based on worker email, calendar, and collaboration-site data; or AI and machine learning).
- You worry that workers are hiding, posturing, or otherwise reacting to the feeling that they are being surveilled.
- Workers are resistant to performance management decisions being made based on newly available data.
- Your workers are withholding data because they are not confident their data is being used in responsible ways or for their benefit.
- Your workers are experiencing information overload, contributing to burnout and slowed decision-making.
Indeed, the “why” behind transparency can vary. Patagonia and Asana are examples of what we call proactive transparency, where leaders or workers intentionally choose to share information to improve trust, accountability, decision-making, or to achieve mutually beneficial outcomes. Reactive transparency, on the other hand, is the result of legislative or regulatory changes forcing leaders to disclose information that was previously closely held. Finally, forced transparency typically involves collecting and analyzing information about workers or executives as a blanket organizational policy or without their knowledge or voluntary consent. Workers can also force transparency on the organization, when they publicly share information about an organization or its leaders through social media or other channels, for example.
Although there has been a growing trend toward proactive transparency, much of the recent movement towards transparency has been either reactive or forced transparency.17 And until recently, the direction of transparency—who shares the information with whom—has primarily been one-way: organizations and leaders sharing information with workers. But today, transparency can work the other way, too. With the advent of new technologies, workers are increasingly sharing their information transparently—proactively or by force. Figure 3 presents a simplified view of bidirectional transparency.
As technologies have enabled leaders to gain greater transparency into work and workers, many organizations have rushed to capitalize. One study reveals that organizations surveyed are collecting data from an average of 400 different sources including computers, smartphones, websites, social media networks, and more,18 and Deloitte’s Quantified Organization research reveals that the vast majority of organizations are collecting email and calendar data already and are likely to begin collecting data from other sources in the near future, such as wearables, biometrics, and location-tracking tools (given transparent data practices and respect for potential worker privacy concerns).19
Whether the use of this newfound transparency is helpful or harmful will depend on how it is used; forced transparency that is used as surveillance, with punitive consequences, can damage trust. Already, 78% of employers surveyed say they are currently using remote tools to monitor their workers;20 studies show that workforce turnover is almost twice as high at companies that use monitoring software as surveillance than at organizations that do not.21
Workforce turnover is almost twice as high at companies that use monitoring software as surveillance than at organizations that do not.
Many use cases, however, can be beneficial, such as using workforce data and AI as a coach to help workers grow or using wearables and smart sensors to track and improve worker safety practices. For example, a British multinational retail distribution center integrated AI with their CCTV systems, enabling them to identify unsafe events that resulted in an 80% reduction in safety incidents in the first three months.22
It’s worth noting that transparency shouldn’t be implemented just for the sake of being transparent, assuming that transparency will automatically create trust. The flip side of transparency is privacy; greater openness is risky as developments in technology and society, particularly the rise of social media, have made it easier to share potentially harmful information far, fast, and permanently. Privacy can sometimes be a better path to trust than transparency. And when greater openness is the chosen path, it requires more earned belief in collective safety and common interest. Getting it right is critical, as trust earned with difficulty can be lost with ease. The measures that can help boost transparency from workers, for example, typically require sacrifices of privacy, whether that means sharing data about people’s well-being or monitoring workers’ time at their keyboards—so those measures have the potential to erode trust rather than build it.
There are also other potential downsides to transparency, such as:
- Gaming the system. Social scientists have identified various behaviors people undertake in response to demands for transparency, typically to protect themselves or manipulate a situation in their favor. These include dishonesty, hiding, cheating, posturing, productivity theater, window-dressing, and impression management—for example, using a mouse-moving machine to trick productivity-tracking software.23 But it’s not just workers that can avoid transparency. Organizations can play at this, too. For example, some companies will comply with pay-transparency laws in job postings by including a wide salary range for a job—for example, “between US$50,000 and US$250,000”—rendering the information essentially useless to job seekers.24
- Negative impacts on decision-making. Providing more data and visibility into decision-making processes may lead to information overload, endless debate, second-guessing, and accountability gaps—situations in which people have important information but are not accountable for using it wisely. Beyond slowing decision-making, without sharing the rationale behind the decisions, workers may also misinterpret the information being shared.25
- Hindering creativity. People who think their ideas and experiments could be made public may experience a phenomenon called “the spotlight effect.” They may avoid risk-taking and experimentation, and innovation can suffer. Ethan Bernstein, a professor of leadership and organizational behavior at Harvard Business School, has reported these impacts among creative workers. In addition to the spotlight effect, Bernstein found that many workers will also conceal their most creative thinking from management because they don’t want to be punished for straying outside of organizational norms.26
Using transparency in ways that build trust
Most organizations are in the early stages of coming to grips with the new transparency landscape and its implications for privacy and trust. When we asked whether organizations were addressing trust and transparency between themselves and workers, only 13% of respondents said they are leading in this space. The biggest challenges they identified were internal constraints, such as culture, and lack of leadership alignment or commitment.
How then do organizations navigate the tricky territory of using transparency in a way that builds trust, rather than undermining it?
First, organizations will need to put transparency in conversation with privacy. Typically, they are not in conversation, with transparency largely under the purview of executives and information technology, and privacy often handled by legal and human resources. Cross-functional governance conversations will be important to striking the right balance for each organization, based on an organization’s own culture, values, and decision-making practices that can vary based on geography, industry, or life-cycle stage of the organization. Think in terms of best fit rather than best practice.
Second, organizations should bring workers together in conversation with leaders about what and why information should be made transparent, to whom, and how. As discussed in “Negotiating worker data” in our 2023 Global Human Capital Trends report,27 cocreating transparency practices—and enabling transparency to be proactive rather than forced—can help create a mutual relationship of trust and provide a window into what workers’ needs and desires are when it comes to transparency.
In particular, workers and leaders can cocreate responsible transparency practices, ones that create mutual benefits for workers and organizations alike, allow workers to opt in to data collection for specified time periods and purposes, and enable workers to challenge potentially incorrect data or raise concerns about how it is being used.
When workers see personal benefits to transparently sharing their data, they are more likely to embrace it; a study by Gartner found that 96% of digital workers would accept more data-monitoring in exchange for benefits like training and increased career development opportunities.28 Likewise, our Quantified Organization research showed that workers who are given the choice to opt in to transparent data collection have more trust in their organizations, are more likely to report that data collection efforts improve business outcomes, and are less likely to report negative outcomes such as presenteeism or privacy concerns.29 Other research shows that giving workers input and agency reduces the risk of them engaging in these negative behaviors.30 For example, one global health care provider conducted an organizational network analysis based on worker communications and collaboration data to optimize cross-functional teaming. Workers could opt out of data collection, and the final data was aggregated and anonymized to protect worker privacy.31
Organizations that build workers’ trust in transparent data practices stand to benefit: When workers are confident in their organization’s approach to responsible use of newly transparent data, they are 35% more likely to trust their organization. But there is still a long way to go: Only 37% of workers surveyed say they are very confident their organization is using work and workforce data in a highly responsible way.32
Only 37% of workers surveyed say they are very confident their organization is using work and workforce data in a highly responsible way.
To strike the right balance between transparency and privacy in a way that elevates trust, it may be helpful to consider the following questions. Each question includes examples of transparency that are likely beneficial (Go) and others that may pose trust issues (Caution).
WHAT information or whose actions will be made transparent?
When making decisions about what to make transparent, consider the potential impact of that information. For example, publicly sharing organizational information may increase trust among stakeholders, but sharing highly personal worker information about an individual’s emotions in the organization may introduce complications and have unintended consequences.
Go (proceed thoughtfully) with information such as:
- Leadership priorities and goals. Finnish software consultant Reaktor, for example, maintains an online forum where workers can openly discuss organizational policy and business decisions.33
- Business information like financials or operational data
- Leadership’s decision-making process
- How compensation and other workforce decisions are made
- Skills needed today and in the future, given the disruption of work by generative AI and other emerging technologies
- Recorded leadership meetings and other sensitive discussions
- Details about the creative process
- Personal information about individual workers, including pay, health and well-being data, and information about emotions. For example, if an organization’s bonus policy is perceived as inequitable, bonus transparency may lead to envy among workers and encourage them to think about their relationship with the organization in transactional terms.
WHY is it important to make this information transparent?
For workers to trust an organization with their data, they need to understand why they are being asked to share it and be offered benefits in return; we call this “give to get.” Using transparency in ways that foster human performance rather than punitive or compliance-oriented ends can help promote trust.
Go (proceed thoughtfully) with transparency for the purpose of:
- Creating better outcomes for workers: For example, using AI video analytics in a factory environment to drive improvements in ergonomics, safety, and other matters that benefit workers.34
- Holding leadership accountable for social metrics, such as by publishing equity, diversity, or well-being metrics
- Helping workers make better decisions by aligning their actions with business goals
- Elevating trust and confidence in leadership and in the vision and strategy they are seeking to advance
- Involving more people in decision-making. Unless there are clear expectations, criteria, and decision-makers identified, including too many people in decision-making can create information overload, reduce accountability, and bog down decisions.35
- Performance management decisions. For example, making people’s individual performance reviews transparent to others may cause strife, as will making performance decisions based on an individual's unique data (for example, docking pay or limiting eligibility for promotions by using location tracking to determine adherence to return-to-office policies).
- Surveilling or punishing workers. In contrast, Metlife employs AI to coach call center workers—not to punish them, but to help them learn and improve at their jobs.36
WHO will provide the information, and who will receive it?
Decisions around who has control over transparency of information can be affected by the reach of that transparency—whether the information will be shared internally or externally, with just the individual, their manager or team, or organizational leadership. Giving workers agency over their information can help provide transparency while also fostering trust. In addition, making determinations about who has access to information should be based on the recipient’s commitment to listening deeply to worker voices and ability to act on the information (for example, making policy adjustments based on aggregated feedback from workers).
Go (proceed thoughtfully) with transparency that provides:
- Information about a worker to that worker. This practice, called auto-analytics, can be a valuable learning tool. For example, some organizations use AI tools to analyze conversational and emotional tone in customer meetings, using the information to help workers work more effectively.
- Operational or process information within workers’ own teams, in forums such as scrum teams or daily standups.
- Worker information and data to coaches who can help workers grow or support human sustainability. For example, AI tools can analyze sales representative videos and provide personal coaching on emotions, topic coverage, and personality. The videos can be made available to managers to personalize further coaching and mentoring work.37 Or organizations can help managers coach workers on well-being by revealing, for example, how often workers have taken time off or are working on weekends.
Caution (think twice) before implementing transparency that provides:
- Individual data about workers beyond themselves or their immediate teams, unless it is aggregated or anonymized. For example, if an organization requires all intra-organization communication to happen on an open platform that exposes all communications in the name of visibility, workers may feel surveilled or intimidated.
HOW will the information be made transparent?
Enact guidelines that give workers reason to believe data about them will be assessed and used fairly. Pursue leading practices for consent and preference management—for example, making transparency initiatives temporary and storing data for limited periods of time, so workers don’t have to worry about how their information might be used in the future.
Go (proceed thoughtfully) with transparency plans that:
- Clearly explain how information will be disclosed and used.
- Are opt-in and seek permission from workers to make their data transparent.
- Have fair guidelines about how the information will be assessed and used.
- Are temporary and store data for limited periods of time.
- Explain clearly to workers how decisions based on worker data are made, such as performance, hiring, and assessments. If AI is used to inform these decisions, ensure that workers understand how it uses their data to make recommendations.
Caution (think twice) with transparency plans that:
- Are vague about how information will be disclosed, evaluated, and used. When one well-known news outlet installed body heat detectors at desks, it intended to use the information gathered to lower costs for space and energy. But the intent wasn’t communicated to workers, who interpreted the detectors as surveillance, inundated managers with complaints and leaked negative stories to other media outlets.38
- Could be used to identify specific individuals. Instead, individual data should be anonymized and aggregated.
- Are enacted without context, since data in isolation may be misinterpreted or misunderstood.
- Leadership doesn’t intend to act on. Workers need to know that their data is being collected with the intention to create mutual benefit.
The trust and transparency conversation
To build trust, organizations and workers should have an ongoing dialogue that gives each party reason to believe the other is looking out for its best interests. This dialogue should focus on what kinds of transparency organizations and workers will provide; why it is valuable for them to provide it; who will provide the information and who will receive it; and how that information will be delivered, evaluated, and used.
Regulations can help guide organizations, but they typically lag the pace of technological innovation and are constantly evolving. Organizations thus should develop their own frameworks of responsibility when it comes to transparency.
Organizations should expect the dialogue around trust and transparency to continue, as evolutions in society and technology present new possibilities and challenges. For example, advanced sensing and tracking technologies can already make behavior highly visible in real time, and the depth and breadth of those kinds of insights will likely only increase.
And although it may sound like science fiction, the day when technology can interpret and convey the contents of individuals’ brains could arrive sooner than most people think possible.39 How will organizations and workers collaborate to navigate these kinds of developments? They have enormous ethical implications for organizations’ practices and relationships with workers, and they will further complicate the critical job of earnings workers’ trust. Asking the right questions now can help organizations develop frameworks around transparency—positioning them to navigate this future in ways that build workers’ trust and help empower all parties to build a better future together.
Research methodology
Deloitte’s 2024 Global Human Capital Trends survey polled 14,000 business and human resources leaders across many industries and sectors in 95 countries. In addition to the broad, global survey that provides the foundational data for the Global Human Capital Trends report, Deloitte supplemented its research this year with worker- and executive-specific surveys to represent the workforce perspective and uncover where there may be gaps between leader perception and worker realities. The executive survey was done in collaboration with Oxford Economics to survey 1,000 global executives and board leaders in order to understand their perspectives on emerging human capital issues. The survey data is complemented by over a dozen interviews with executives from some of today’s leading organizations. These insights helped shape the trends in this report.