The business perks of empathetic leadership

The new EY report found that empathetic leaders encouraged staff retention and productivity

Lack of empathetic leadership can lead to employee turnover, according to a new report by Ernst & Young LLP US entitled the ‘2021 EY Empathy in Business Survey.’

Lack of empathetic leadership and employee turnover

The survey of over 1,000 employed Americans found that many respondents have left a job because their boss “wasn’t empathetic to their struggles at work” (54%), while another 49% said their boss wasn’t empathetic to issues in their personal lives.

The survey also found that over half (58%) of employees have left a job because they didn’t feel valued by their boss, while 48% have left a job because they didn’t feel like they belonged.

A significant number also said that their company’s approach to empathy was performative, where 46% of said “efforts to be empathetic toward employees are dishonest.” Furthermore, 42% said their company “doesn’t follow through when it makes promises.”

Ultimately, empathetic leadership is not only good for employee wellbeing, but its power to aid retention could stem the harmful effects of the “great resignation” on firms, where a record 4.3 million US workers quit their jobs in August 2021 while vacancies continue to flood the jobs market globally.

What an empathetic leader looks like

To the employees involved in the survey, an empathetic leader is transparent and fair and follows through on actions. The top five qualities employees look for in an empathetic senior leader are:

• Being open and transparent (41%).

• Being fair (37%).

• Following through on actions (37%).

• Encouraging others to share their opinions (36%).

• Being trusted to handle difficult conversations (34%).

The perks of empathetic leadership

A vast majority of respondents (89%) agreed that empathy makes for better leadership, while 88% said empathetic leadership “inspires positive change within the workplace”, and a further 87% said that it creates trust between employees and leaders.

Additionally, 85% said that empathetic leadership in the workplace increases workplace productivity among staff.

Respondents also cited mutual empathy between leadership and staff as important, where this increases efficiency (87%), creativity (87%), innovation (86%), and company revenue (81%).

Employees also said that being able to have open and honest conversations with bosses was important, where 85% said cultivating a climate in which diverse perspectives are valued was key.

However, around 30% said they are not comfortable advocating for cultural changes within their organisation, while one-in-four (26%) do not feel comfortable raising ethical concerns.

Employees shared what would make them feel more comfortable about having open discussions with leadership:

  • Having regularly scheduled one-on-ones (45%).
  • Providing opportunities to give anonymous feedback (42%).
  • Participating in team-building exercises (37%).
  • Receiving frequent reminders that they’re in a safe space to have open discussions (36%).
  • Participating in training/communication workshops about having open discussions (36%).

Steve Payne, EY Americas Vice Chair – Consulting, said: “As a result of the COVID-19 pandemic, leaders are working to establish business transformation models to adapt to the new normal. Our research finds that empathy is not only a nice-to-have but the glue and accelerant for business transformation in the next era of business. Empathy’s ability to create a culture of trust and innovation is unmatched, and this previously overlooked trait must be at the forefront of businesses across all industries.

“The ability to connect with employees and provide a supportive work environment is more important than ever. Organisations and leaders must prioritise empathy to foster innovation, inspire growth, and successfully lead business transformation efforts.”

In this article, you learned that:

  • Lack of belonging, not feeling valued, and lack of empathy from leadership about an employee’s professional and personal life can contribute to them leaving a job.
  • A majority of employees involved in the survey said “being open and transparent” (41%) was the most important characteristic of being an empathetic leader.
  • Empathetic leadership was believed by a majority of staff to boost productivity (85%).

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