Economic crisis: Managers required – employee trust is falling!

Economic crisis: Managers required – employee trust is falling!

The German economy is facing significant challenges, which are reflected in declining growth figures and declining employee confidence. The current state of gross domestic product shows a slight contraction in the second quarter of 2025. This despite small glimmers of hope in the form of isolated stabilization signals. Loud FAZ Major companies in the automotive industry such as Volkswagen, Audi, Porsche, BMW and Mercedes are reporting drastic declines in profits. Bosch is also responding with additional job cuts and ZF is tightening its austerity measures.

A key factor contributing to these developments is Donald Trump's 15 percent tariffs that have come into force. These trade restrictions add to the uncertainty and present additional challenges for companies to overcome. Clear communication is crucial for managers in such crisis situations in order to maintain the trust of employees and strengthen loyalty to the company.

Low employee retention and challenges in leadership

The results of a recent Gallup survey paint a worrying picture of employee retention in Germany. After all, only 9% of employees feel strongly emotionally connected to their company. The vast majority, namely 78%, say they are simply doing “duty by the book”. These results come from a study carried out between November 18 and December 20, 2024, in which a total of 1,700 randomly selected employees aged 18 and over were interviewed by telephone ( Gallup ).

Additionally, the Edelman Trust Barometer 2025 shows a decline in employees' trust in their employers. Employees expect regular updates about the company's situation, especially in times of crisis. The involvement of middle management is of great importance for the successful implementation of business decisions. Resilience is another key word in the current discussion. Resilient employees not only show higher job satisfaction, but also better performance and lower absenteeism.

Value-oriented leadership as the key to success

Given the challenges companies face, values-based leadership is essential. This includes attributes such as honesty, reliability and respect as well as the assumption of social, ecological and economic responsibility. Employees' trust in their managers is crucial, and this can only be strengthened through transparent communication. Positive effects of values-based leadership are notable and similar to the outcomes promoted by resilience.

Current developments require managers to actively address these challenges. A strategic approach that promotes both emotional connection among employees and resilience could be crucial for long-term success in a market characterized by uncertainty.