How Empathy Affects Employee Performance & Retention

Empathetic leadership affects retention rates

Empathetic leadership, or the ability to understand and share another person’s feelings, has been proven to positively affect employee retention within organizations across the globe. Despite its advantages, many leaders have often taken an impersonal approach to business, which can lead to lackluster results and high turnover rates among workers. Here are three ways empathy affects employee performance and retention.

What is empathy?
There is a simple definition of empathy: to feel what another person feels. Because we are naturally social beings, it makes sense that we sometimes find ourselves feeling what others feel and then responding by wanting to help or comfort them. You’ve probably experienced empathy in your life—maybe when you heard about a friend who was going through a tough time and felt bad for them, or when you felt happy when a family member landed their dream job. So why is empathy something leaders struggle to demonstrate in the workplace?

1) Employee Attitude Reflects Leadership
Studies have shown that employees’ attitude reflects leadership. Thus, it becomes imperative that one of a leader’s responsibilities is to create a work environment where their staff feel comfortable and look forward to coming to work. One way to do so is by being empathetic and understanding of an employee’s needs.

For example, according to a recent study by Catalyst, only 32% of employees with less empathetic leaders felt engaged at work compared to 76% of workers with empathetic leaders.

These actively disengaged employees can cause a ripple effect throughout the company, affecting team morale, increasing resource use, and lowering desired outcomes.

2) Work-Life Balance
When employees feel good about their work-life balance, they are more inclined to think positively about their employers and enjoy their time at work. Encouraging leaders to focus on work-life balance is a simple yet powerful way to foster positive attitudes, increase retention, and encourage empathetic leadership. If an employee is spending most of their waking hours feeling tired or overworked, their attitude will start to reflect in their work. This may lead to lower morale among workers and lead to higher turnover rates.

3) Innovation
There is a common assumption that leadership plays a significant role in fostering an environment where employees feel comfortable sharing their ideas. This is true; however, empathy demonstrated within leadership plays an equally important role in creating this open environment.

Leaders who are able to experience affective empathy – or feelings of emotional closeness with others – have higher rates of innovation within their team, leading to a higher project success rate.

Empathetic Leadership = Higher Retention
When leaders demonstrate compassion for their employees, it improves both retention rates and overall employee happiness. By empathizing with their employees’ situations, it sends a clear message that they’re willing to accommodate them in their times of need which can be inspiring. So, while showing empathy might not seem like it has much to do with maintaining high-quality leadership, what you do for your employees is often what they will do for you in return.

Curious to see how Enterprise-EQ brings emotional intelligence into staffing – improving mental health, job performance, and leadership skills? Book time with one of our experts to experience the EQ difference, turning your HR from a cost center to a revenue generator.