When Trust Goes Bust, What Happens to Empathy?

As downsizing and economic uncertainty shake up the workplace, employees wonder if ‘empathetic’ leaders are telling the truth.

Massive layoffs in 2023 were a wake-up call for over 200,000 employees of tech giants like Amazon, Microsoft and Google, as well as fintech startups. Feelings of shock and betrayal replaced the trust workers once had in their employers—and who could blame them? The tech industry has been notorious for its empathetic culture, perks, and commitment to employees’ well-being.

At Salesforce, many of the 8,000 laid-off workers complained the company’s “touchy-feely” culture was a façade (Fortune, April/May 2023). CEO Marc Benioff, a self-described “empathetic” leader who spent decades developing a we’re-all-in-this-together family culture, was forced to justify Salesforce’s first-ever layoffs to shaken workers.

The truth, and nothing but the truth

From corporate downsizing to a slowing economy, it’s no wonder employees have lost some of the psychological safety they once had. As trust slides, so does their job satisfaction, productivity, creativity and innovation. Employees surveyed in the 2023 Ernst & Young’s Empathy in Business report overwhelmingly agreed that there’s a lot of talk about empathy but not enough follow-through. In fact, over half of employees surveyed (52%) perceive corporate attempts at empathy as inauthentic (an increase from 46% in 2021).

52% of employees perceive corporate attempts at empathy to be inauthentic.

2023 Ernst & Young’s Empathy in Business report

And in Businessolver’s 2023 State of Workplace Empathy report, the number of respondents who believed their company cared about them was at an all-time low: Only 66% believed they worked in an empathetic workplace—a substantial drop from 78% five years ago.

Employees report a lack of consistency when it comes to company promises, and this has a way of breaking down a culture of empathy. For example, recent return-to-office mandates have had a head-spinning effect on workers who relied on the flexibility of previously instituted hybrid models. (In Businessolver’s report, 96% of respondents considered flexible working hours the most empathetic benefit an employer can offer.)

Sensitivity and authenticity

Time and again research has shown that for businesses to be agile and adaptable, company leaders must provide transparency and psychological safety. Rather than focus solely on employee output, empathetic leaders put themselves in employees’ shoes. They listen, they’re approachable, and they’re flexible. As a result, their authenticity improves retention, performance, morale, motivation and collaboration—leading to substantial business outcomes. 

“How to be a good leader is how to be a good human,” says Dejun “Tony” Kong, an associate professor of organizational leadership and informational analytics at Leeds. “It’s about how responsive you are to other people’s concerns—the basis of any relationship. People want to be heard and understood.”

Kong teaches Leeds’ Executive Leadership course and challenges students to imagine what kind of leaders they want to be. Strong leadership, he says, comes from self-awareness and reflection on one’s strengths and weaknesses.

His work on trust in the workplace—how it can predict a company’s performance during times of great stress, such as a pandemic, economic crisis or political upheaval—has won the Most Influential Article Award and a Best Paper Award from the Academy of Management’s Conflict Management Division.

Kong is now studying a new model for how companies can build systems and structures that cultivate a trusting culture. He says human resources staff will play a big part in creating systemic change that’s self-sustaining in maintaining an empathetic work environment. This, combined with leadership training, could positively influence the psychology, attitudes and behaviors of employees.

He points out that in recent years, the pandemic’s impact on the workplace has prompted a great need for empathetic leaders who can help employees adapt to the changing business environment. This requires a special skill set, and empathy tops the list.

Indeed, it is what leaders must get right.