Transparency in Leadership: How Open Communication Builds Trust in the Workplace

In a 2023 survey of 1,500 U.S. employees, BambooHR found that workers who experience layoffs crave transparency. More than half of employees say companies should disclose actions they're taking to avoid further layoffs (60%) and be transparent about why roles were let go (56%).

For HR professionals, the benefits of transparency may seem obvious. As Howard Schultz, who served as the chairman and CEO of Starbucks for 20+ years, puts it: “I think the currency of leadership is transparency. You’ve got to be truthful.” A quick search will yield dozens of similar transparency quotes offering the same advice.

Yet distrust remains stubbornly present in the workplace. In 2014, just 52% of workers believed their employer was open with them. By 2022, Edelman found that 78% of workers trusted their employers—meaning that while trust is slowly improving, there is still room for improvement.

Read on to unpack the questions on everyone’s mind: What does being transparent really mean? Why is transparency in leadership important? And how can you use it to build trust in the workplace?

What Does Being Transparent Mean?

Transparency in leadership means keeping your employees in the loop, sharing the good and the bad, and welcoming honest feedback from members of your team.
As any leader who has conquered transparency will tell you, it can be uncomfortable. It requires a willingness to be honest and open with your employees, even if you feel somewhat vulnerable as a result.

Transparent leadership is a give and take. It operates under the assumption that you and your team are working toward the same goal. For your team to accomplish their goals, they need to have clear direction on the why and the how. For you to accomplish your goals, you need to count on your team of talented minds to give open, honest feedback that can move your whole organization forward.

Why Is Transparency in Leadership Important?

When you lead with transparency, you set a standard for the rest of the company to live by. The importance of transparency in leadership becomes more apparent as it fosters a workplace culture of open communication and accountable behavior for both employees and leaders.

How Does Transparency Build Trust in the Workplace?

Transparency makes leadership more approachable. When employees see you speaking your mind and being honest with others, they’ll likely be inspired to do the same. This mutual cause of developing honesty will naturally breed trust in the workplace.

Keep in mind: no relationship is one-sided. Your employees need you to give to them if they’re going to give in return. Sharing information with an employee, no matter how sensitive or mundane, can foster trust and build the foundation of a healthy working relationship.

3 Key Benefits of Transparency in Business

Once you understand the importance of transparency in leadership and consistently implement transparency, you can expect to see additional benefits. Here are a few of the most important ones.

1. Greater Employee Advocacy

Inviting feedback shows your employees you value them. This builds a foundation of trust and loyalty that nurtures greater employee advocacy—increasing engagement and helping to build your employer brand.

2. Increased Efficiency

Leading with transparency helps you ensure your employees have everything they need to accomplish the tasks ahead of them. This leads to an increase in efficiency because, with all the information up front, they can be off to the races—no sitting around twiddling their thumbs. In addition to that, clear, open, and frequent communication ensures employees are less likely to make false assumptions and then move forward based on those false assumptions.

3. Improved Employee Performance

The importance of transparency in leadership becomes crystal clear when you consider the positive effect it can have on employee performance. Information is empowering. And empowered employees perform well.

Is Transparency a Skill You Can Learn?

Though some leaders may seem more transparent than others, they weren’t born that way—transparency and open communication are skills that can be cultivated over time.

You’ll likely find transparent leadership easy or difficult depending on your personality type. For some, it will come easy. For others, it might feel unnatural or uncomfortable.

The good news? Knowing where you instinctively stand when it comes to transparency will help you develop an action plan to strengthen that muscle.

How to Practice Transparent Leadership: 4 Best Practices

1. Empathize with Employees

Employees want to relate to their managers and supervisors. They want to know they’re being led by people who have had similar experiences—both in work and life. Some leaders feel that this kind of relationship can take away from the authority of their role, but in reality, empathetic leaders foster cultures of productivity and collaboration.

Take the time to get to know your employees and meet with them one-on-one. Use this time to form personal connections with your employees and express your commitment to transparency.

2. Invite Employees to Speak Their Minds

A work environment that prioritizes transparency also encourages open communication.
That means your employees won’t be afraid to let you know what they really think about an assignment or a new office policy.

Some actionable steps you can take include encouraging employees to give honest feedback about company policies and recent changes or announcements. Adopt an open-door policy and ask team members in upper management to do the same.

Open communication not only reduces the risk of employees harboring resentment, but can lead to positive changes across the organization.

3. Encourage Better Accountability

When everyone in the office clearly understands their responsibilities and level of authority, they can hold themselves—and each other—more accountable for their tasks.

Conduct regular meetings with the entire company, each department, and individuals to make sure that everyone is informed about new developments, that clear expectations have been set, and that every employee has the chance to stay in the loop.

4. Set Realistic Expectations

Transparency lets employees know their leaders are grounded in reality.

For example, when a leader gives an aggressive deadline on a task without elaborating, it can seem like they’re asking too much of their employees. Alternatively, when leaders outline why they gave the employee the task, why they set the specific deadline, and why they chose the employee for the job, intentions are clear, and employees can move forward with confidence.

Establish a consistent policy for you and other leaders to be transparent about business developments and decisions. What’s the baseline information to include? What constitutes sensitive information, and how do you safely share it? For example, you may consider kicking off all team meetings with a confidentiality reminder if sharing sensitive information.