A new report from HR tech firm Businessolver highlights the powerful role of empathetic leadership in reducing employee attrition and enhancing business outcomes. According to the findings, organizations perceived as lacking empathy face a 1.5x higher risk of employee turnover within six months, potentially costing U.S. businesses up to $180 billion annually.

Businessolver defines empathy as the ability to understand or share another person’s feelings or perspective. CEO Jon Shanahan emphasized, “Empathy isn’t just good for people — it’s good for business,” noting that companies failing to integrate empathy into their culture are missing a crucial growth lever.

Survey data revealed that employees who view their workplace as unempathetic are three times more likely to experience toxicity, 1.3 times more likely to struggle with mental health, and four times more likely to feel disconnected from leadership — especially the CEO. These factors contribute to absenteeism and reduced productivity.

Flexible hours and remote work emerged as strong indicators of workplace empathy. Yet, while 41% of CEOs utilize flexible hours, only 29% of employees and 21% of HR professionals report doing the same. Despite this gap, the perception of progress is growing — 63% of employees believe U.S. companies are adapting to modern workforce needs, a significant improvement from 2016, when 60% felt employers were stagnant.

Shanahan added, “Transparency, flexibility, benefits, and leadership accountability are key to creating a workplace where employees feel seen and supported.”

Other studies support these findings. Research by The Predictive Index noted that nearly half of workers feel misunderstood by their managers — a disconnect that may outweigh even burnout in driving talent loss. Meanwhile, studies from University of Hawaii and Durham and Athens Universities found that empathy and kindness from leaders directly contribute to improved team morale, productivity, and resilience — particularly in remote and hybrid environments.

As the workplace evolves, empathetic leadership continues to emerge as a strategic advantage — benefiting both people and performance.

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Source: Hrdive.com