The empathy advantage: The business case for empathetic leadership

For a long time, empathy was misunderstood, often equated with sympathy, and perceived as a weakness. However, peeling back the layers reveals that empathy is about understanding and sharing the feelings of others. Empathy in the workplace means recognizing that employees bring their whole selves to work, including their external stresses and emotions.

As leaders, it is crucial to meet people where they are and understand their current state without necessarily knowing every detail. It’s about acknowledging their struggles and providing the support needed to help them perform their best. Empathy is not about solving their problems but facilitating their journey forward. Beyond that, there is a profound business case for building empathetic leadership.

The pandemic’s role in highlighting empathy

The COVID-19 pandemic underscored the importance of empathy. It disrupted traditional work environments, pushing many into remote or hybrid work setups. Those who could tap into their empathy emerged as strong leaders, guiding their teams through unprecedented challenges. This period showcased the necessity of understanding and flexibility, with empathetic leaders rising to the occasion.

According to a study by Catalyst, a global nonprofit working to build workplaces that work for women, employees with empathetic managers report being more innovative (61% vs. 13%) and engaged (76% vs. 32%) than those with less empathetic managers. The pandemic highlighted these trends, with employees relying heavily on empathetic leaders for support and guidance.

Trust: The companion to empathy

Empathy in leadership cannot stand alone; it must be coupled with trust. Trust fosters open communication, allowing employees to share their struggles and successes without fear. When leaders lead with trust, they create an environment where employees feel valued and understood. Trust and empathy together build a robust foundation for effective leadership, especially in a remote or hybrid work environment.

Trust and empathy are intrinsically linked. When employees trust their leaders, they are more likely to believe that their well-being is a priority. This belief encourages employees to open up about their challenges and share innovative ideas without the fear of retribution or dismissal. For example, a team member who trusts their leader will be more inclined to discuss difficulties with a project, leading to collaborative problem-solving and better outcomes for the organization.

A study published in the Harvard Business Review found that employees who trust their leaders are more productive, more satisfied with their jobs, and more likely to stay with their organizations. This study underscores the importance of building trust through empathetic leadership. When trust is present, employees feel secure in their roles, which reduces turnover and increases engagement. They are more willing to take risks and contribute to the organization’s success, knowing that their leader supports them.

Moreover, trust mitigates the uncertainty and stress that often accompany remote and hybrid work arrangements. In a physically dispersed team, it is easy for misunderstandings to arise and for team members to feel isolated. Leaders who prioritize trust and empathy can bridge these gaps by maintaining transparent communication and showing a genuine interest in their team’s well-being. This approach not only fosters a cohesive team environment but also ensures that all members feel connected and supported, regardless of their physical location.

Building trust is a continuous process that requires consistency and integrity from leaders. It involves keeping promises, being transparent about decisions, and showing appreciation for employees’ efforts. Leaders who demonstrate these behaviors consistently reinforce the trust their employees have in them, which in turn enhances the overall effectiveness of their leadership.

In practice, leaders can build trust by:

1. Being consistent: Consistency in actions and decisions reinforces reliability. Employees need to know what to expect from their leaders, which builds a sense of security and trust.
2. Showing integrity: Leaders should act with integrity, adhering to moral and ethical principles. This behavior sets a standard and earns respect from the team.
3. Maintaining transparency: Open and honest communication about organizational changes, challenges, and successes fosters trust. When leaders share information openly, employees feel included and valued.
4. Expressing appreciation: Regularly recognizing and appreciating employees’ contributions builds trust and encourages a positive, collaborative work environment.
5. Encouraging feedback: Creating an environment where employees feel comfortable providing feedback helps build trust. Leaders should actively seek and act upon feedback to show they value their team’s insights.

Empathy and business outcomes

Empathy is not just about feeling good; it has tangible benefits for businesses. Studies have shown that empathetic leaders drive better employee engagement and productivity. According to a Businessolver report, 92% of employees said they are more likely to stay with an empathetic employer. Additionally, empathy correlates with innovation and collaboration, critical components of business success in today’s competitive landscape.

The Center for Creative Leadership also found that leaders who show empathy toward their employees are viewed as better performers by their bosses. Empathy is not just a nice-to-have quality but a critical component of effective leadership that drives performance and organizational success.

Empathy in action

In my career, I’ve seen the power of empathy firsthand. Leading a team in a hierarchical and traditional work environment, I decided to empower my direct reports, many of whom were women in Mexico. By trusting them to make decisions and supporting them through their challenges, I saw them grow and gain respect from their peers and leaders. This empowerment, rooted in empathy and trust, transformed our team’s dynamics and performance. Traditionally, many decisions had been elevated to my level as the leader of the function, with the local team operating in more of an execution capacity, versus learning how to develop strategies. By empowering them to make many decisions locally, I saw a shift in self-confidence in their own capabilities, as well as a shift in how local leaders began partnering with them on things that impacted their site and their employees. These women became trusted confidants of their leadership teams, and it all started with trusting their capabilities, ensuring they had the support when they needed it, and giving them the freedom to step into their own power. 

Building empathetic leaders

Empathy should be a core component of leadership development programs. Organizations must prioritize emotional intelligence training, helping leaders understand and practice empathy. This approach not only enhances individual leadership skills but also fosters a culture of understanding and collaboration across the organization.

According to the World Economic Forum, emotional intelligence, which includes empathy, is one of the top 10 skills needed for the future workforce. Investing in developing these skills among leaders can significantly enhance organizational performance and employee well-being.

Practical steps for leading with empathy

To cultivate empathy in leadership, consider the following steps:

1. Active listening: Encourage leaders to listen actively to their employees. This means fully engaging in conversations, asking questions, and showing genuine interest in their concerns and ideas.
2. Personal check-ins: Regular one-on-one meetings can help leaders understand their employees’ personal and professional challenges, fostering a deeper connection and trust.
3. Training and development: Invest in training programs that focus on developing emotional intelligence and empathy among leaders.
4. Lead by example: Leaders should model empathetic behavior, showing vulnerability and openness, which can encourage employees to do the same.
5. Feedback and adaptation: Create a feedback loop where employees can share their experiences and leaders can adapt their approaches based on this feedback.

Empathy in leadership is not a trend but a fundamental shift towards more effective and human-centric management. By embracing empathy and trust, leaders can create a supportive and productive work environment, driving performance, engagement, and long-term employee retention. As we navigate the complexities of modern work, leading with empathy will remain a crucial element of leadership excellence.

This article is part of the Precision Matters series. In the series, HR and L&D leaders share their expert strategies for utilizing Learning & Development tools to craft precise, impactful business outcomes and foster organizational growth.