The Real Cost of Waiting: Why Now Is the Time to Act on Trust Gaps
Feb 05, 2025
When you’re a leader, every decision counts.
The stakes are high, and the impact of inaction can be far greater than most companies realize. As we navigate through a turbulent business environment—especially, these days, in sectors like tech—the cost of waiting to address leadership gaps and trust issues is more than just a missed opportunity. It’s a risk to the stability and future success of the organization.
Trust matters. The Edelman Trust Barometer found that trust in leadership has a direct impact on employee retention, with organizations with high trust levels seeing 50% lower turnover rates. A Harvard Business Review study reported that 80% of employees who have high levels of trust in their leadership feel more motivated and willing to stay at their company.
As we look ahead to 2025, the winds of change are not just blowing-they are fierce. Major companies like Meta, Microsoft, and Intel have already announced large-scale layoffs, signaling a recalibration of the tech industry after years of rapid growth. But while the media focuses on the layoffs themselves, there’s an undercurrent of deeper issues at play—particularly around leadership, trust, and organizational stability.
3 Ways Inaction Costs More Than You Think
When trust gaps go unaddressed, it doesn’t just affect morale—it undermines your entire organizational foundation. Employees who don’t trust leadership are less likely to collaborate, innovate, or contribute to the bigger picture. Inaction can lead to disengagement, higher turnover rates, and eventually, a talent drain that may have been avoided.
According to Gallup's State of the American Workplace report, disengaged employees cost the U.S. economy between $450 and $550 billion each year. This is due to lost productivity, higher turnover, and increased absenteeism.
The leadership instability that accompanies layoffs is a prime example of the hidden costs of inaction. When organizations don’t address the root causes of instability early, they pay the price with fractured teams, broken communication, and a culture that’s ripe for misunderstanding. As we’ve seen recently with Meta and Microsoft’s mass layoffs, “underperformance” is often cited as the reason for cuts, but without clear, transparent communication, it simply becomes a label that erodes trust. When employees are left questioning leadership decisions without proper context, the true cost is far greater than the short-term savings on payroll.
When an employee hears “you are being let go because you are underperforming” and they know it’s not true, their teammates know it’s hollow, and it erodes trust. In my work, I’ve seen the power of clear communication. Whether you are in tech, healthcare or another industry, if layoffs are necessary leaders need to own the decision with honesty. Employees can handle tough news, but they need to feel respected whether that’s through how you deliver the news, through the competitive severance package, reskilling opportunities, or even just being transparent about why decisions are being made.
These are three telltale signs that your organization may be at risk:
- High turnover rate: leaders leave quickly, especially within 90 days of a new supervisor stepping up.
- Succession planning problems: there are not enough internal candidates with the skills and experience to step into leadership roles.
- Morale and engagement suffer: when morale is low, employees feel uninvested in their work, the organization, and its future.
Understanding your organization's leadership stability doesn't have to be complicated. Our Element of Change Leadership Diagnostic helps you quickly assess where you stand and what needs attention.
Download our complimentary diagnostic tool to measure your organization's leadership health and identify areas that need immediate attention.
Who Can Help Us Rebuild Stability After a Reorg?
Rebuilding leadership stability after a reorganization isn’t just about filling vacant roles; it’s about restoring trust and setting the organization on a clear path forward. Leaders who can empathize with the struggles employees face during such transitions are vital. Companies should seek leadership development experts who specialize in guiding organizations through change, with a focus on communication and trust-building.
That’s where Element of Change comes in. We partner with organizations to build trust, reduce turnover, and kickstart growth. We have a unique ability to create environments where teams feel supported and empowered. Yes, even during turbulent times.
Who’s in Your Corner? Finding Help to Rebuild Trust
Finding the right partners—whether it’s an external consultant, HR expert, or leadership coach—can be the key to bridging trust gaps. These professionals can help establish clear, transparent communication and provide the tools for leaders to rebuild their credibility. At Element of Change, we specialize in helping companies not only navigate reorgs but also build the kind of leadership culture that drives trust and stability for the long-term.
Together, we work to:
- Strengthen team connection and collaboration, through leadership offsites.
- Equip leaders with a safe space to share and address their concerns, through integrated leadership coaching.
- Empower leaders with skills and tools to succeed, with stack and build behavior training.
Do We Really Have to Act Now? The Cost of Waiting
The answer is simple: Yes. The cost of waiting is immense, particularly in industries like healthcare, where rapid shifts in talent demand and technological innovation are reshaping the workforce. As we move into 2025, companies that delay addressing leadership instability and trust gaps risk falling behind, not just in terms of talent retention, but in the ability to adapt to new market demands.
Waiting means you’ll likely pay the price with higher turnover, disengaged employees, and a fractured company culture. The Center for American Progress estimated that the cost of replacing an employee can be about 20% of their annual salary for lower-level employees and can rise as high as 213% for highly specialized roles.
When large companies like Meta and Microsoft announce mass layoffs, the ripple effect isn’t just felt internally—it affects the entire market. Employees are left uncertain about their future, and competitors may begin poaching talent. More importantly, when leadership trust is eroded, it can take years to rebuild. The longer you wait, the harder it becomes to repair. Inaction today compounds the challenges you’ll face tomorrow.
The tech sector may be laying off employees, but the need for tech isn’t disappearing, it’s shifting. For example, healthcare has a need for data analysts, AI experts and digital transformation specialists. We’re seeing organizations prioritize roles that directly drive innovation and outcomes, even while trimming less critical positions. That same mindset is happening across the board: companies are doubling down on what moves the needle while letting go of what doesn’t. This goes beyond just a trend in tech, it’s a larger shift in how organizations are (and should be) thinking about talent and value. The challenge for workers is staying ahead of these shifts, and the challenge for leaders is how do you build trust while making these calls.
How Much Do We Want to Spend on Leadership Stability?
The truth is, investing in leadership stability doesn’t have to be expensive—it’s about prioritizing the right actions. Whether it’s investing in leadership development programs, conducting trust-building workshops, or hiring consultants like Element of Change to guide the process, companies should view this as a strategic investment, not a cost.
A good rule of thumb is: invest in leadership as you would in any other key asset. Just as companies invest in R&D, technology, or product development, leadership stability is essential to long-term success. Companies that allocate resources to building and maintaining strong leadership are much more likely to weather uncertain times and emerge stronger on the other side.
Avoiding Disaster: Spotting Leadership Pitfalls Early
The best way to avoid disaster is to stay proactive. Conduct regular pulse checks on employee sentiment, make sure leaders are trained in providing clear and constructive feedback, and ensure there’s a continuous dialogue between leadership and employees. Most importantly, be as transparent as possible about why decisions are being made and how they align with the company’s vision.
As we enter 2025, the urgency of addressing leadership gaps and rebuilding trust is clearer than ever. The cost of waiting is high—impacting not just your workforce but your organization’s ability to adapt to a rapidly changing market. With the right leadership and strategic investment in trust-building, companies can turn this moment of uncertainty into an opportunity for stability and growth. So ask yourself: Are you ready to act, or are you willing to wait and risk the long-term consequences?
We’re bringing together a panel of industry leaders as they share practical solutions for rebuilding trust and stability after a reorganization. To join the conversation join our next forum at www.eocleadership.com/rsvp.
