Empathy: The Best Currency In The Bidding War For Talent

For organizations that find themselves in the unenviable role of facing today’s talent shortages while trying to hire for the business, their talent leaders may be experiencing sleepless nights. That’s because when it comes to the labor market, one thing is clear: jobseekers are in the driver’s seat and their hands are firmly on the steering wheel. But instead of looking to wrestle away control, businesses can pave a way that leads candidates right to their door. And it involves more than just wage increases.

Fair and competitive pay is always important, but an equally important incentive is empathy, which results in greater company loyalty. The World Economic Forum reported that workers at companies with highly empathetic leaders tend to be more innovative and engaged. In Randstad’s own Workmonitor survey of worker sentiments, more than one-third of respondents say working for a respected and caring employer is the most important consideration driving their career decisions.

Why empathy is needed more than ever

Randstad Sourceright’s recent Business Health Index confirms that 73% of U.S. human capital and C-suite leaders said they hired extensively during the past year — the highest among all countries surveyed. This outlook was shared by more than half of those surveyed in India (68%), Australia (62%), Mexico (60%), Canada (58%), France (58%), Brazil (58%), Belgium (56%), the U.K. (54%) and Italy (54%) . Adding to this competition, The Great Resignation shows no sign of slowing. According to the U.S. Labor Department, the job quits rate reached 3% in November of last year, matching a series high. 

Clearly people continue to express their dissatisfaction with employers by leaving and seeking opportunities elsewhere. A recent study published in MIT Sloan Management Review, for which the authors examined 34 million employee records, found that 3 of the top 5 reasons for resignations were related to empathy — or lack thereof.

In fact, the researchers found that a toxic corporate culture is 10.4 times more powerful than compensation in predicting a company’s attrition rate compared with its industry. Furthermore, failure to recognize employee performance is nearly three times more useful as an indicator of turnover than pay is. This shows that while compensation may help to attract great talent, it’s not the only factor that will retain great people.  

More recently, a survey of job seekers conducted by Monster as part of its Future of Work report found that only 22% of job candidates feel like they’re getting back on track after last year’s setbacks. This is alarming because even during these unique times — when people, not companies, have the upper hand in the labor market — workers still feel uneasy about their situation. Clearly, organizations need to better support people’s professional and personal needs. The global crisis isn’t going to ebb soon, even when the pandemic is no longer a concern.

If the pandemic has taught us anything, it’s that more than ever people are contemplating the meaning of their lives and careers. The most effective way to engage them and build loyalty during this time is to listen and offer the support they need.

Like many businesses, Randstad increased the frequency of employee surveys during the pandemic, and perhaps more importantly, made a commitment to act on the results. Leadership made a conscious decision at the outset of the pandemic to retain rather than lay off workers, even when the business experienced a precipitous decline in the short term. Instead, the company rolled out a number of initiatives aimed at gauging and alleviating worker stress while they struggled to juggle home and work responsibilities. These initiatives helped to not only engender greater loyalty from employees but also better prepared Randstad’s workforce for the rapid recovery in 2021.

Empathy’s impact on employer brand

Beyond elevating engagement and productivity in the near term, there is a more lasting benefit to being an empathetic organization: the positive effect on employer brand. In today’s sharing economy, the impact of employee reviews on a company’s reputation is far-reaching.

When people say good or bad things about an organization, their words resonate with job seekers. According to Glassdoor, 86% of employees and job candidates research company reviews and ratings to decide on where to apply for a job.

Jobseekers today are no longer satisfied with decent wages and benefits; in this tight labor market, these are simply table stakes. Workers want to know employers have their back, whether that means offering flexible schedules, a clear career path or training and development to further their employability. Staying in tune to what your workforce needs often results in authentic and impactful endorsements that are widely seen by job applicants.

Conversely, workers who don’t feel listened to or looked after can severely hamper a company’s ability to attract talent. Their negative reviews can also have a financial toll, according to the Harvard Business Review. Past research has shown that a poor reputation can cost an employer at least 10% more per hire. And the reputational stain doesn’t go away easily; poor reviews can follow a company around for years.

Make talent well-being a priority

To become an employer of choice, it’s not enough to say you are an empathetic organization; you have to show it. Doing so doesn’t require tremendous investments or large-scale changes to workforce policy. Sometimes it’s the little things that matter most to workers, like recognizing a job well done, giving impromptu time off or even celebrating birthdays.

Seek to understand the daily challenges your employees are going through and let them know you, as an organization, are paying attention. Here are four ways to help achieve this:

1) Capture the experience. Design your employee surveys to fully gauge the talent experience. It’s not enough to simply ask how employees are doing or what they need. By creating comprehensive questionnaires that cover all aspects of their jobs, you’ll build a clearer picture to support meaningful organizational change without putting the onus on employees to pinpoint challenges.

2) Be inclusive. An empathetic culture is an inclusive culture, so make sure your policies support all employees, whether they are working parents, have disabilities, have special caretaker responsibilities, or face other unique circumstances. According to one study, 50% of people with empathetic leaders reported their workplace was inclusive, compared with only 17% of those with less empathetic leadership.

3) Develop empathetic leaders. Listening and offering support might seem like natural traits of leaders, but that’s not always the case. Organizations should provide training and development that helps leaders manage in a compassionate and sensitive way. Your culture should promote this value to all employees, but especially so for managers.

4) Make your efforts ongoing. Don’t limit your policy making to today’s challenges alone. Embed empathy in your culture long-term. Companies that are considered the top places to work make those lists perennially. That’s because leaders at these businesses understand the need to continually reinforce their employee value proposition by assessing and delivering on workforce needs.

With the labor market still facing disruption and talent scarcity, organizations need to reconsider their approach to talent attraction to acquire the best people. Taking steps to listen and support your people will not only help drive better business results, but will also make it easier to win over the loyalty of employees and job candidates alike.