Family businesses in Nigeria understand the importance of trust among their employees as 82 percent indicated that they believe it is important for their employees to trust them. However, family businesses in Nigeria must adopt a more assertive strategy in fostering trust among their employees.
A recent PwC survey on Nigerian family businesses revealed only 48 percent of them believe their employees trust them. Despite recognising the need for employee trust, these businesses aren’t taking corresponding action. For instance, just 36 percent see building trust within their workforce as very important.
Moreover, only 27 percent make significant efforts and investments to attract and retain top talent. In addition, less than half (47 percent) have strong practices for rewarding their staff at all levels. This clearly shows a trust gap between Nigerian family businesses and their employees.
To tackle this issue, PwC developed a new trust formula for family businesses. It highlights the significance of having a clear purpose, open communication, and a strong commitment to environmental, social, and governance (ESG) values, as well as diversity, equity, and inclusion (DEI) principles.
The new formula for family businesses to build trust in employees:
Having a clear purpose and values:
This is traditionally where Nigerian family businesses have excelled. The survey reveals that many (85 percent) Nigerian family businesses have a clear purpose and 70 percent of family businesses reveal that they take actions to ensure employees understand what the company values and purpose mean.
However, only 52 percent of family businesses in Nigeria have the company’s value and purpose built into their appraisal and reward processes. This suggests these principles may not be taken as seriously as needed, which could further widen the trust gap.
To express commitment to their purpose and values, family businesses should:
(a) Clearly communicate their purpose and values.
(b) Align actions with their stated purpose.
(c) Incorporate values into employee assessments and rewards.
(d) Provide training to help employees grasp the company’s values.
Commitment to ESG and DEI:
PwC’s 2022 Global Workforce Hopes and Fears Survey asked over 52,000 workers from around the world how they feel about their employers. More than half (53 percent) said it’s important for their company to be clear about how it affects the environment, and slightly more (54 percent) said it’s really important for their company to be open about its efforts for diversity, equity, and inclusion (DEI). However, only 39 percent of family businesses in Nigeria regularly communicate how well they are performing against such non-financial indicators.
An effective approach for family businesses in Nigeria to enhance employees’ trust in their business is by showing a genuine commitment to Environmental, Social and Governance Principles and Diversity, Equity, and Inclusion (DEI) initiatives.
Devotion to ESG principles suggests that a family business is conscious of its broader obligations, not only to its shareholders but also to the environment, society, and forthcoming generations. This commitment can take different forms, including adopting sustainable practices, supporting social causes, or ensuring ethical governance.
Similarly, family businesses in Nigeria can commit to DEI by advancing diversity in recruitment, guaranteeing equity in opportunities and treatment, and nurturing an inclusive workplace. They should assure their employees that they are cherished, irrespective of their background.
There are numerous strategies that family businesses in Nigeria can adopt to foster trust among their employees, particularly in relation to ESG and DEI; including:
Consistently provide updates on the family business endeavours regarding ESG and DEI. This can be achieved through various channels such as reports, bulletins, dedicated sections on the company’s website, company-wide meetings, etc. Openness about objectives, advancements, and challenges pertaining to ESG and DEI helps to build credibility.
Leading by example:
It is crucial for leaders of family businesses in Nigeria to reflect the company’s ESG and DEI principles in their behaviours and choices. As employees frequently view their leaders as inspiration, the example set by those at the top can significantly influence the entire organisation’s culture.
Inclusive policies and practices:
Establish and articulate distinct policies that encourage diversity and inclusion in areas like recruitment, career advancement, and daily business activities. This demonstrates commitment to DEI beyond verbal assertions.
Training and education:
Regular training and educational programmes will enable employees to understand the significance of ESG and DEI, and how their specific responsibilities contribute to these goals.
Family businesses should set definitive benchmarks and goals for ESG and DEI, and ensure that leaders, managers are accountable to achieving them. This action underscores the business’ genuine dedication to these areas.
Active participation of employees:
Encourage employees to actively participate in ESG and DEI initiatives. This could be through volunteering, participation in employee resource groups, or seeking their opinions on ESG and DEI policies and strategies.
Open communication and accountability:
In Nigeria, only 46 percent of family businesses have established a system that encourages reporting of misconduct directly to management.
Nigerian family businesses need to establish structures for accountability and open communication that encourage employee feedback to build trust among employees. As it stands, only 24 percent of Nigerian family businesses surveyed have an internal process for employees to question management’s decisions.
By putting a robust communication and accountability structure in place, family businesses in Nigeria can deepen their relationships with their employees. This can lead to increased trust among employees, improved productivity, job satisfaction, and overall organizational performance.
Regular performance reviews provide an opportunity for employees to receive feedback, recognize their achievements, identify areas for improvement, and express their concerns or suggestions. This approach can boost morale, increase engagement, and build trust.
Furthermore, the implementation of an open-door policy, which enables employees to openly communicate their concerns to management without the fear of negative consequences can also foster a trusting environment.
To enhance this policy, implementing a whistle-blower mechanism can empower employees to anonymously disclose instances of unethical or inappropriate behaviour, further promoting transparency and trust within the organisation.
In summary, family businesses in Nigeria can foster employee trust by prioritising transparent communication, demonstrating real commitment to ESG and DEI initiatives, and living their stated values. This strategy will not only boost employee trust but also contribute to a healthier, more productive work environment.
Esiri Agbeyi, Partner and Private & Family Business Leader, PwC Nigeria, Olusola Adewole, Partner and People & Organisation Advisory Leader
PwC Nigeria; Oluwatoyin David, Associate Director, People & Organisation – Tax