The Impact of Leadership and Organisational Purpose on Employee Engagement

The recognition of the growing impact of organisational purpose on employee engagement has not just risen significantly over the last few years but has become a key trend shaping the future of work. It is no longer new for Top Employers to have clear commitments to a ‘positive impact’ on the world. In our World of Work Trends Report 2023, we identified that the importance of a ‘lived’ purpose—one that comes straight from the heart of those within the organisation—would become a constant in everyday business decisions.

In our latest research, in our World of Work Trends 2024, we dived deeper into this trend as we recognised that organisations that provide opportunities for employees to reflect on their sense of purpose and connect this to that of the organisation enjoy higher engagement, revenue growth, and profitability. It’s not surprising that 2023 saw an eight-percentage point increase in adopting this practice among Top Employers.

The importance of organisational purpose and leadership

Looking at this year, we saw that this trend continues to evolve, especially as the world becomes increasingly unpredictable and trust in traditional institutions is declining. For example, trust in government and journalists is low (41%, 47%), while trust in CEOs currently sits at 64%.

This context is of interest to us in this article. The link between employee and organisational purpose is becoming more important and equally challenging as further disruption in the world affects the workplace and workplace values become increasingly diverse. In this changing environment, it will be the leaders within organisations who will be tasked with navigating this complex world and transforming company values into action.

We identified that organisations will only see employee engagement and financial benefits from a strong organisational purpose if they have the right leaders in place to bring it to life. Purpose-driven leadership will be critical to success in 2024 and beyond.

The impact of leadership and organisational purpose on employee engagement in numbers

We analysed the relationship between organisational strength and organisational purpose and collected information about employee engagement in 1 860 Top Employers. We found the following:

Companies with strong organisational purpose and good leadership had employee engagement rates of 79%.
Companies with strong organisational purpose without good leadership had employee engagement rates of 76%.
Companies with weak organisational purpose and good leadership had employee engagement rates of 79%.
Companies with weak organisational purpose without good leadership had employee engagement rates of 75%.

It is clear that leadership has a clear impact on how organisational purpose is felt and how that affects employee engagement rates. Therefore, we need to investigate what employees really want from their leaders. What makes employees trust their leaders?

What makes a great leader?

People are different, and what they want from their leaders reflects this difference, but there are still similarities in what people now expect from them. On big-picture issues, they want leaders to have a perspective beyond immediate business concerns. 60% of employees are interested in hearing their CEO speak about controversial social and political issues that they care about. It is now common for employees to closely review the actions and opinions of their leaders to see how they align with organisational values.

But empathy is really at the heart of purpose-driven leadership. When employees were asked about the criteria they used to decide who to trust, 79% cited empathy as a deciding factor.

Empathy as the Key Factor

It is clear that empathy stands out as a critical leadership skill. Empathy is the ability to understand and share the feelings of another. For people wanting to become empathetic leaders, here are key strategies to aid in this transformation:

Active Listening: Empathy starts with listening, and leaders who want to develop this skill need to take the time to proactively listen to their employees. That involves being fully present, understanding, responding, and remembering what employees say and share.
Open Communication Channels: Leaders must create an environment where open communication is encouraged and valued. This work can be done with regular check-ins and multiple feedback channels.
Recognition and Validation: Recognising employees’ hard efforts is a powerful tool for leaders to show empathy. Leaders should be trained to acknowledge both their team members’ achievements and emotional states. This validation helps employees feel seen and appreciated, boosting morale and engagement.
Conflict Resolution Skills: Empathetic leaders are skilled at resolving conflicts in a way that respects all parties involved. Training leaders in conflict resolution techniques can help them navigate disputes with sensitivity and fairness, ensuring that all voices are heard and considered.
Feedback with Compassion: Providing constructive feedback is essential, but doing so with empathy makes a significant difference. Leaders should be trained to deliver feedback in a supportive way that focuses on growth rather than criticism. This involves balancing honesty with kindness and offering actionable suggestions for improvement.
Leading by Example: Finally, leaders must lead by example. Demonstrating empathy in their interactions sets a standard for the entire organization. When leaders consistently act with empathy, it becomes a core part of the company culture, influencing the behaviour of employees at all levels.

Final Thoughts

Empathy in leadership is the cornerstone of an inclusive and effective workplace. Organisational purpose is an evolving, collaborative process that demands the lived commitment of every employee. Without authentic buy-in, neither the employee nor the organisation truly benefits. Once seen as a top-down process owned by the C-suite, strategy is facing a similar revolution. By prioritising this essential skill, HR professionals can help build a thriving, resilient organisation equipped to meet the challenges of the modern work environment.

David Plink on Innovation & Leadership in a Rapidly Evolving World of Work

In September, David Plink, CEO at Top Employers Institute, participated in CNBC Africa’s 2023 Future of Work Virtual Conference in a live panel discussion on leadership. He met with other C-suite leaders to discuss how work is changing and how leadership is innovating to meet the needs of their employees.

The other speakers in the panel included Dr Nejri Mwagiru, Senior Futurist at Africa: Institute for Futures Research (IFR) at the University of Stellenbosch, Amadou Diallo, CEO at DHL Global Forwarding Middle East & Africa, and Stephen van Coller, CEO at EOH.

In the session, their discussion answered questions including:

How will the future of work impact income inequality, social mobility, and job security?
What policies and regulatory frameworks should be implemented to safeguard workers’ rights and ensure a just transition?
How can governments, businesses, and civil society collaborate to mitigate the potential negative consequences of automation and ensure a fair distribution of opportunities?
And more.

The future of work is evolving as it is driven by technological advancements, changing demographics, and shifting economic landscapes. Watch the session in full below to hear more from this insightful session.

How Organisations Improve Employee Engagement with Emotionally Engaged Leaders

The world of work is permanently active. The business landscape is fast-paced and ever-evolving, but one thing that hasn’t changed is the importance of employee engagement. Employee engagement is a critical factor in an organisation’s success.

Engaged employees are more motivated, productive and stay in organisations longer, leading to higher levels of innovation and overall performance. One of the critical drivers of employee engagement is the presence of emotionally engaged leaders.

In this article, we will explore how emotional intelligence makes a leader emotionally engaged and how it impacts employees and their engagement levels.

Managers have a more considerable impact on people’s mental health than doctors and even therapists. Leaders that are emotionally engaged are better able to create a positive, supportive and psychologically safe work environment, which can improve employee wellbeing and employee engagement.

What is Emotional Intelligence?

In 1995, in the book Emotional Intelligence Daniel Goleman, the psychologist that coined the term defined emotional intelligence as a set of skills that help individuals recognise, understand and manage their own emotions, as well as the emotions of others. While emotional intelligence is usually emphasised more in personal relationships, it is critical to realise that emotional intelligence or a lack of it, also is essential at work.

In Emotional Intelligence, Goleman identified four traits of emotional intelligence, which are:

Self-Awareness: It is believed that the first step in developing emotional intelligence is self-awareness. Leaders and management should take time to understand the impact of their behaviour by reflecting on their own emotions. This needs to be done across different situations so that they have a fuller understanding.
Self-Management: The next step for leaders becoming emotionally intelligent comes from developing ways to manage their emotions; this can only come after becoming more self-aware. Self-management involves learning and using skills like stress management and mindfulness. If a leader is to engage with these skills, they must also practice active listening when interacting with coworkers.
Social Awareness: Leaders making an effort to become emotionally intelligent will need to develop the ability to understand and empathise with other people’s perspectives; this is especially important as more and more organisations become more diverse than before.
Relationship Management: The fourth trait of an emotionally intelligent leader is one of the most critical, and it relies on the other characteristics to truly achieve it. Relationship management uses emotional intelligence to build and maintain positive relationships, resolve conflicts, and influence and inspire others to achieve common goals.

You can download the World of Work Trends Report 2024 here for free.

What is an Emotionally Engaged Leader?

Emotionally engaged leaders are individuals who genuinely care about their team members, their wellbeing, and their professional development. These leaders demonstrate empathy, active listening skills, and emotional intelligence. They create a supportive atmosphere where employees feel valued, heard, and motivated to perform at their best. Emotionally engaged leaders also foster a sense of purpose and alignment by effectively communicating the organisation’s vision, goals, and values.

Three Ways that Emotionally Engaged Leaders Impact Employees

Trust and Transparency: Emotionally engaged leaders establish an environment of trust and transparency by being open and honest with their team members. This cultivates a sense of psychological safety, encouraging employees to share ideas, express concerns, and take risks without fear of negative consequences.
Personal and Professional Growth: Emotionally engaged leaders invest in their employee’s growth and development. They provide mentoring, coaching, and opportunities for learning and advancement. This commitment to individual growth enhances employee skills and knowledge and demonstrates that the organisation values their long-term success.
Motivation and Empowerment: Emotionally engaged leaders inspire and motivate their employees by recognising their achievements and providing constructive feedback. They empower their team members to make decisions, take ownership of their work, and contribute meaningfully to the organisation’s goals. This sense of autonomy increases job satisfaction and engagement.

How to Improve Employee Engagement with Emotionally Engaged Leaders

Understanding what makes a leader emotionally intelligent is essential; it is even more critical to see how they can improve employee engagement more concretely. We have four strategies that organisations can use to engage their employees with the help of emotionally engaged leaders:

Encourage Open Communication: Promote open communication channels within the organisation, allowing employees to voice their opinions, concerns, and ideas. Emotionally engaged leaders actively listen to their employees insights, seek their input, and take appropriate actions based on their feedback.
Leadership Development Programs: Organisations can implement programs focusing on emotional intelligence, empathy, and effective communication. These programs help leaders develop the skills necessary to connect with their teams on an emotional level and foster a positive work environment.
Regular Feedback and Recognition: Establish a culture of feedback and recognition where leaders provide regular, constructive feedback to their team members. Recognise and celebrate employee achievements, both big and small, to reinforce a culture of appreciation and motivate continued engagement.
Lead by Example: Leaders should model the behaviour they expect from their employees. Emotionally engaged leaders demonstrate integrity, empathy, and a strong work ethic. They are authentic, accessible, and approachable, creating a positive and engaging work environment that makes it safe for employees to model these behaviours.

Final Thoughts

Employee engagement is crucial for organisational success, and emotionally engaged leaders are pivotal in driving and nurturing team engagement. By developing emotionally intelligent leaders who prioritise trust, transparency, motivation, empowerment, and growth, organisations can create a culture that fosters high levels of employee engagement.

Investing in leadership development programs, promoting open communication, and recognising employee contributions are some of the effective strategies that can help organisations unlock the potential of their workforce, leading to improved productivity, innovation, and overall success.

Emotionally engaged leaders bring out the best in their employees and create a work environment where individuals thrive, and organisations prosper.

As the pace of technology accelerates, we must focus on the aspects of us that make us human- creativity, empathy, innovation and awareness. In the future workplace, our ability to capitalise upon this, and develop it in others, might ultimately lead to an organisation’s success or failure.

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