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The Future of Work Issue

A sniffed-at trait may be vital to your company hitting its goals

Empathy is tricky. In recent years, it’s become a sniffed-at, laughed-at, or memed trait. Still, leaders who do the work appear to hit their goals and see a boon in productivity, one of the most tangible business metrics.

Words by Stephen J Bronner

Illustrations by Jordan Bogash

If you ask Michelle Tillis Lederman about hybrid work in the years ahead, she’ll point to “relational equity” as the key challenge at the heart of it.

“Relational equity is the build-up of experience and time from working with somebody,” Lederman tells The Workback. “Relational equity makes it easier to grant people the benefit of the doubt; the feeling like they know how to interpret and receive a person’s communications because they had done it with them before.”

The author of The Connector’s Advantage and The 11 Laws of Likability started exploring the concept before March 2020, when many knowledge workers were together in offices five days a week. They accrued trust in each other faster. The give-and-take had downstream effects.

At the heart of relational equity lies empathy, a so-called “soft skill.” However, it’s been under closer examination in recent years as a factor for improving the bottom line and reducing costly employee churn

Researchers at the Center for Creative Leadership found a positive correlation in 2016 between empathy and job performance. Here’s the key finding: “Empathic emotion as rated from the leader’s subordinates positively predicts job performance ratings from the leader’s boss,” they write. Moreover, “Empathetic leaders are assets to organizations, partly because they are able to effectively build and maintain relationships—a critical part of leading organizations anywhere in the world.”

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Empathy is tricky, though. In recent years, it’s become a sniffed-at, laughed-at, or memed trait. Still, leaders who do the work appear to see a boon in productivity, one of the most tangible business metrics: A 2021 survey of more than 1,000 Americans conducted by Ernst & Young found that empathy is a critical factor in productivity and talent retention: “A staggering 89% of employees agree that empathy leads to better leadership.

In fact, 88% feel that empathetic leadership inspires positive change within the workplace, and 87% say it enables trust among employees and leaders. Additionally, 85% report that empathetic leadership in the workplace increases productivity among employees.”

A headshot photograph of Michelle Tillis Lederman.

“Leaders now and in the future can create real business value for their companies if they can use empathy to accrue relational equity with employees who have their own challenges.”

Research conducted in 2019 by Deloitte makes the link even more explicit, stating that leaders who focus on boosting employee “human skills,” like empathy, have higher productivity rates and increased revenue. These skills will also become more critical in the next decade as A.I. takes up work historically done by humans. Leaders will focus more on tasks that require human skills like empathy, communication, and problem-solving.

In other words, leaders now and in the future can create real business value for their  companies if they can use empathy to accrue relational equity with employees who have their own challenges.

“Empathy is so much a part of being a connected leader,” Lederman says. “When leaders put empathy into practice, they don’t need to have all the answers. They should spend more time listening, asking questions, and confirming their understanding.”

Lederman spoke with The Workback on skills leaders can hone to accumulate equity in a hybrid world. We’ve edited the following interview for clarity and brevity.

Why do so-called soft skills like empathy matter for productivity and worker longevity?

There’s a correlation between someone’s first two weeks on the job and the longevity of that job. Up to 20% of turnover happens within the first month and a half of the job. Voluntary turnover collectively costs companies $1 trillion a year. If people don’t like who they work with, they’re more likely to be disengaged or leave. Disengaged employees cost between $450 to $500 billion per year. If people like working at the company, it will reduce turnover.

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Many things that cause disengagement are the softer things: Employees feel they’re not in the loop, are not given credit, and don’t know how their job connects to the company’s purpose. It makes sense, then, that during exit interviews, the number one reason people cite for their leaving is they don’t like the boss. 
See also: Losing workers comes with a cost—and collaboration is just one way to prevent it.

How do likability and relationship-building drive a business forward?

Likability impacts the way a leader’s message is heard. People are more open to the ideas of people whom they like. Relationships drive sales and results. People are four times more likely to buy when they’re referred by someone they like or trust. That matters when it comes to taking a job or landing a client. The relationship closes the deal—not the price or the product.

Have the skills of relationship-building changed in the hybrid era?

Yes and no. We always had online networking, social media, and all these channels—we just weren’t leveraging them as much. Now our networking time has shifted. As a result, we need to build those skills we might not have been leveraging because in-person networking was easiest for most. Leaders need to understand how to make each environment work for them. 

We always wondered how you show up in the physical room. Now, we also need to think about how to show up in the virtual room with similar energy. Leaders must be more conscious and aware that they are being watched more closely virtually than they would be in person. Specifically, that’s focusing on attentiveness, eye contact, the camera, background, etc. It’s about staying curious and engaged and not multitasking.See also: The future of work depends on our “digital” body language

What skills should executives develop as knowledge workers adjust to hybrid schedules over the next few years?

Relationship building, because it will get more complex. Everything that I write and believe in is real relationships, real results. The other two skills are listening, which becomes harder when we have so many more distractions, and on the flip side of that is mindfulness, the ability to stay present in the moment. These skills all help leaders become likable, and people do business with people they like.

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How does relational equity tie into the skills you’ve described?

Relational equity goes a long way toward engagement and productivity. I feel that 90% try their hardest at work when they are engaged, and employees are 125% more productive when they’re inspired.

People don’t work for organizations; they work for people. They don’t quit organizations; they quit people. When you build relational equity with the people who work for you, they will want to work for you and want to work hard for you. But relational equity can erode. If you don’t maintain your house, the house’s value goes down, and your equity in that house goes down. You need to continue the maintenance for it to maintain equity.