The Role of Outplacement in Building Organisational Trust and Maintaining a Social Licence to Operate

A report by the Australian Institute of Company Directors (AICD) highlighted a concerning trend – organisations across Australia (in line with their global counterparts) are facing a serious and undeniable “crisis of trust”.

The 2018 Edelman Trust Barometer (a global survey on institutional trust conducted by public relations firm Edelman) found that trust had fallen across all four of the groups it covers – government, media, business, and non-government organisations (NGOs) – with trust levels at five-year lows and below the 50% threshold denoting the point they are classed as ‘distrusted’.

While ‘trust’ is a wide-ranging concept that can apply to the way an organisation is viewed both outside and within the business, one thing that’s clear is that building and maintaining trust is crucial to the way in which businesses operate. In fact, the AICD survey completed by almost 600 directors found that over 95% agreed or strongly agreed that trust was important to their organisations’ sustainability.

What’s more, trust is one of the key components of maintaining a ‘social licence to operate’ – a core consideration for any business wanting to remain sustainable and trusted by the community in which it operates.

In this article, I’ll be looking at why organisational trust is important, what it means in the context of a social licence to operate, and how outplacement can play a key role in building and maintaining trust within your company.

Institutional Trust and Social Licence to Operate

Firstly, it’s interesting to examine the concept of a social licence to operate (SLTO) – a term that’s been in use for around twenty years and used to describe the ‘non-formal responsibilities’ of an organisation.

According to The Ethics Centre, the social licence to operate refers to “the acceptance granted to a company or organisation by the community”. While we’re all aware of the many formal legal and regulatory license requirements that need to be met for businesses to operate legitimately, SLTO could be described as an informal license given to an organisation by the stakeholders on whom their activities have an impact.

The Ethics Centre identifies three key components of SLTO:

  • Legitimacy: Adherence to the accepted standards or ‘rules’ of the community – whether these are legal, social, cultural, formal or informal.
  • Credibility: The provision of true and clear information to the community and the capacity to fulfil any commitments made.
  • Trust: “The willingness to be vulnerable to the actions of another”. Trust and confidence are key pillars of SLTO; they are hard to obtain and all-too-easy to lose.

With growing public expectation for businesses to demonstrate a commitment to corporate social responsibility, maintaining a social licence to operate should be a key focus for any company. And that means taking a proactive approach to ensuring high levels of institutional trust.

The Importance of Internal Practices in Organisational Trust

Two key findings of the AICD report showed the importance placed on maintaining trust at an internal level:

  • 81.6% of surveyed directors see “employees” as one of the two most critical stakeholders to maintain trust in an organisation (a close second to “clients or customers” at 82.3%).
  • “Internal culture and practices” was seen as the most critical issue relating to trust, with 74.1% of respondents selecting this issue as part of their top three.

Taking a bigger picture approach, prioritising trust at an internal level is logical given that individuals within an organisation will inevitably interact with external stakeholders and make decisions that reflect the credibility of the organisation as a whole.

The Role of Outplacement in Building Organisational Trust

With ‘internal culture and practices’ seen as a critical issue relating to trust and more than 90% of directors surveyed by the AICD stating they were making efforts to improve the corporate culture of their organisation, a practice such as outplacement can play a critical role in building organisational trust ‘from the inside out’.

In fact, making outplacement an internal practice that forms part of your organisational culture can go a long way in building trust at both an internal and external level. Here’s how offering outplacement services can positively impact trust on various stakeholders:

1. Outgoing Employees: Outplacement can increase trust and reduce negative feedback

By showing your willingness to act with fairness and respect, providing outplacement support to departing employees following redundancy or retrenchment helps to protect the relationship between an outgoing staff member and your organisation.

This will help to maintain their trust and confidence in your brand even under difficult circumstances. Aside from minimising any resentment on the employee’s part, this is also beneficial should you wish to recall them in the future as a ‘boomerang’ employee (which is particularly relevant in our COVID-19 era when current cut-backs may be reversed as the economic landscape changes).

2. Existing Employees: Outplacement maintains trust and engagement

For your surviving employees, providing outplacement to departing staff members demonstrates your company’s commitment to upholding its brand values at every stage of the employee lifecycle.

This will help to ensure a positive perception of you as an employer, which will have a knock-on effect on internal trust levels, as well as ensuring surviving employees remain motivated and connected with your brand.

3. External Stakeholders and the General Public: Outplacement protects brand reputation

A study by Career365 found that 95% of people would be “far less inclined” to post adverse comments about their former employer had they been offered an outplacement program.

By providing outplacement support to departing employees, you can help safeguard organisational trust in the wider community by reducing the chance of negative feedback being shared online or via word of mouth from unhappy former employees.

Career365’s affordable online outplacement programs – delivered via online training modules and video-based coaching – coupled with video conferencing via Zoom, Teams or Skype can be accessed from any location, at any time, on any device, making them ideal for a COVID-19 environment.

If you need support or advice on outplacement services for retrenched employees in the wake of the COVID-19 pandemic, visit to find out more about our fully online outplacement programs.

Greg Weiss has authored two books about career transitioning and is soon to release a third. He has deep expertise in outplacement and employee onboarding, and is the Founder of Career365 (formerly CareerSupport365) – a leading Australian employee transitioning firm, specialising in outplacement and employee onboarding.


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