As many employees face downsizings, restructurings and a looming global recession, most say that empathic leadership is a desired attribute but feel it can be disingenuous when not paired with action, according to the 2023 Ernst & Young LLP (EY US) Empathy in Business Survey.

The study of more than 1,000 employed US workers examines how empathy affects leaders, employees, and operations in the workplace. The survey follows the initial EY Consulting analysis of empathy in 2021 and finds workers feel that mutual empathy between company leaders and employees leads to increased efficiency (88%), creativity (87%), job satisfaction (87%), idea sharing (86%), innovation (85%) and even company revenue (83%).

"A transformation's success or failure is rooted in human emotions, and this research spotlights just how critical empathy is in leadership," said Raj Sharma, EY Americas Consulting Vice Chair. "Recent years taught us that leading with empathy is a soft and powerful trait that helps empower employers and employees to collaborate better, and ultimately create a culture of accountability."

The evolving state of empathy in the workplace

There are many upsides to empathetic leadership in the workplace, including:

Inspiring positive change within the workplace (87%)
Mutual respect between employees and leaders (87%)
Increased productivity among employees (85%)
Reduced employee turnover (78%)

"Time and again we have found through our research that in order for businesses to successfully transform, they must put humans at the center with empathetic leadership to create transparency and provide employees with psychological safety," said Kim Billeter, EY Americas People Advisory Services Leader. "Empathy is a powerful force that must be embedded organically into every aspect of an organization, otherwise the inconsistency has a dramatic impact on the overall culture and authenticity of an organization."

In fact, half (52%) of employees currently believe their company's efforts to be empathetic toward employees are dishonest ― up from 46% in 2021, and employees increasingly report a lack of follow-through when it comes to company promises (47% compared to 42% in 2021).

To fulfill the authenticity equation, previous EY research indicates offering flexibility is essential. In the 2022 EY US Generation Survey, 92% of employees surveyed across all four workplace generations said that company culture has an impact on their decision to remain with their current employer.