I remember working with senior executives from a multinational professional services firm shortly after the Great Financial Crisis. (GFC) During their meeting, the leaders struggled to agree on talent attraction and retention strategies. Several leaders were deeply concerned about losing talent, with one team member expressing concern: “We cannot shrink ourselves to glory.” The group’s dilemma was understandable, given that any loss would have an impact on client retention and profitability. Others did not agree with the idea of maintaining the status quo, citing the firm’s financial viability as the most crucial factor.
When I left the room that afternoon, nothing had been resolved. Later, I learned that many key positions had been eliminated, leaving those who hoped to keep them disappointed. The organization successfully weathered the Great Financial Crisis, and while my contact informed me that the staff cuts directly impacted many people, they will undoubtedly remember the experience, particularly how they learned the news, which changed their perception of how their employer treated them as loyal, hardworking employees.
Fast forward more than a decade to a new world of work and essentials for organizational survival. The battles in the boardrooms continue, although the conversations have shifted dramatically. While human capital remains at the top of the list, demand for talent exceeds supply, making retaining top talent critical.
As businesses strive to attract and retain skilled employees, the role of leadership becomes increasingly important. Emotional intelligence (EI) among leaders has emerged as a critical factor in talent retention. A leader’s influence now goes beyond influencing the trajectory of an employee’s career. There is a direct link between mental and emotional well-being and how leaders self-regulate in order to create a happy workplace where employees want to stay.
UKG, a global Human Capital Management (HCM) firm, found the following:
- Managers have a greater impact on their employees’ mental health (69%) than doctors (51%), therapists (41%), and spouses.
- More than 80% of employees would prioritize good mental health over a high-paying job.
- Two-thirds of employees would accept a pay cut for a job that promotes their mental health, and 70% of managers would as well.
- 40% of C-suite executives expect to leave within a year due to work-related stress.
Understanding the concept of emotional intelligence
In the context of leadership, emotional intelligence is a valuable tool for promoting employee well-being, creating a positive work environment, and cultivating strong relationships. Emotional intelligence is the ability to recognize, understand, manage, and effectively control one’s own emotions. It includes self-awareness, self-management motivation, empathy, and social skills, all of which help to achieve the overall goal of retaining top talent.
Creating a positive workplace environment
Leaders with high emotional intelligence are excellent at fostering a positive and inclusive work environment. They are aware of their team members’ emotional needs, encouraging trust and open communication. A positive work environment boosts employee satisfaction and engagement, making people more likely to stay with a company that cares about their well-being.
Building strong relationships
Effective leadership entails developing meaningful relationships with team members as well as meeting objectives. Leaders who are emotionally intelligent develop strong relationships. Being sensitive to other people’s emotions makes them more approachable and understanding. Leaders’ relationships with their teams foster loyalty and a sense of belonging. Employees who have a strong bond with their leaders are more likely to stay because they know their contributions are acknowledged and valued.
Communication breakdowns are a common source of workplace conflict and miscommunication. Leaders with high emotional intelligence excel at communicating by recognizing both verbal and nonverbal cues. They actively listen, express themselves clearly, and tailor their communication style to meet the needs of the team. Clear and empathetic communication is essential for creating a healthy work environment and quickly resolving problems, which contributes to talent retention.
Beyond the paycheck: Recognition and validation
Employees seek more than just a paycheck; they want to be recognized and appreciated for their contributions. Leaders with emotional intelligence understand how important it is to recognize their team members’ efforts. These leaders promote a positive work culture by giving constructive feedback, recognizing accomplishments, and celebrating milestones. Such a culture not only boosts morale, but it also helps to retain talent because employees feel valued for their work.
An organization cannot achieve greatness by limiting its capabilities or losing top talent. Retaining and developing exceptional people is critical if your leaders want to avoid “shrinking themselves to glory.” In a world where competition for talent has never been fiercer, allowing top talent to leave rather than exercising emotional intelligence through meaningful recognition and relationship-building is one aspect over which you have control.