New research finds an important, and perhaps worrisome, paradox that needs to be on the HR radar: C-suite leaders almost universally recognize the outsized impact empathy in leadership can have on a company’s performance—yet, at the same time, they increasingly acknowledge their organizations have a toxic culture. What’s more, toxic cultures and financial growth are going hand in hand.

“It is a little bit of what you fear,” says Marcy Klipfel, chief engagement officer at Businessolver. “Organizations are running into the trap of empathy being a buzzword instead of woven into the fabric of who they are as an organization.”

The culture challenge

While organizations with toxic, unempathetic cultures aren’t necessarily struggling financially right now, they could be speeding toward what the Businessolver report, based on a survey of about 1,300 employees and executives, labels a “cultural reckoning.”

For instance, employees at such organizations score their companies significantly lower on employee belonging, connection to leaders and peers, trust and more. Those at empathetic organizations report better outcomes and better financial performance.

“Employees will spot that inauthenticity,” Klipfel says. “If you’re just saying [you’re empathetic], but it’s not coming through in how you communicate, how you approach different people practices, if it’s not in the fabric, it falls short.”

HR’s role is to bridge the gap—between C-suite leaders who think they’re leading empathetically and employees who don’t see it coming to life in the day-to-day. It’s a reality that is particularly salient given ongoing AI transformations.

“There has to be a balance,” Klipfel says. “You can’t let AI run wild and straight-up replace the human element. That’s what is so empowering and exciting, to me, about being in human resources and engagement right now; we have the opportunity to bring this all to life from our seat.”

Benefits as a driver of empathy

Benefits is one area in which empathetic leadership can be demonstrated.

Firms like Deloitte and Zoom recently made headlines for trimming benefits offerings, particularly around high-value programs like paid time off and family leave.

Klipfel says HR and benefits leaders today do need to be cognizant of the pressure for cost efficiency; yet, it will be up to the function to drive home to leadership the long-term ROI of empathy in benefits.

Much of that work should be underpinned by understanding your workforce and what their unique needs are.

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