Neuroscience has served tech well, so leaders shouldn’t ignore it now.
Why employee engagement is bombing
2023 began with staff cuts across many industries, especially tech, and critique has been levied against leaders for prioritising profitability over retaining their people during the downturn. Uniquely positioned to profit from disruptive technological developments, big tech can presumably afford a more cavalier approach to people, buying them back in once profitability improves. But the ‘hire and fire’ model has its problems.
Low engagement is currently estimated to cost around 11% gross global GDP (Gallup), with a reported four in five employees worldwide feeling disengaged at work. A meta-analysis of decades of research by the same firm showed that high engagement, defined as a strong connection with one’s work, correlates with higher organisational productivity, quality and profitability. What’s more, a PwC global survey found that 55% of CEOs see ‘lack of trust’ as a threat to their growth.
Corporate leaders’ investment in governing on behalf of stakeholders is undermined by their commercial agenda, as a Harvard study points out. But undermining stakeholder trust can be costly. In a study published in The Economic Journal, neuroscientist Paul Zak and economist Stephen Knack identified an explicit mathematical relationship between trust within organisations and their financial performance. As Elon Musk’s recent Twitter debacle highlights, even tech monoliths aren’t ‘too big to fail’ as a result of disaffected stakeholders, especially in the current climate.
So it’s hardly surprising that employee engagement is a top priority for CEOs in 2023 (Gartner). In the context of a cost-of-living crisis, coupled with weightier workloads due to resource constraints, keeping employees motivated will be a major challenge in the coming months. But if leaders really want to solve their employee engagement problem, they need to fix its root causes. As last year’s unprecedented churn rate revealed, employee disengagement reflects profound shifts in the nature of work. This constitutes a ‘talent time bomb’ that organisations have less than two years to address before suffering financial and reputational adversity.
The ‘talent doom loop’
Despite its advantages, technological advancement involves a loss of human agency that was only compounded by the global pandemic. For around half of the world’s workforce, this loss is literal: McKinsey research suggests that by 2030, half of us will have lost jobs to automation. Professional success now means keeping pace with technological change for both employees and employers. Many companies mistakenly assume that this means hiring in technical skills. This perceived deficit of technical skills leads companies to create ‘unicorn’ or ‘purple squirrel’ job descriptions that constrain talent pools and block internal mobility.
Since skill obsolescence is inevitable, organisations instead need to increase their internal capability for upskilling. This means recruiting individuals who can learn and process new information quickly, who have high fluid intelligence or ‘aptitude’. By overlooking ‘soft’ skills in favour of technical capabilities, organisations are also failing to capitalise on the fundamental human need for self-efficacy and losing productivity as a result. Without clarifying priorities and motivations, companies and professionals waste years seeking the professional and personal alignment that is vital for success. But time is ticking.
The neuroscience of employee engagement
If they are to rally their disaffected troops in a hybrid world, companies must evolve from ‘culture by osmosis’ to intentional culture creation, McKinsey analysts argue. In doing so, leaders could do worse than to follow the neuroscience. Experiments show that our bodies produce oxytocin when we feel a sense of purpose and trust in others, causing us to feel happier (Zak). Consequently, dissonant leadership is almost as damaging as trusted leaders are engaging. According to a study in Ivey Business Journal, interaction with resonant leaders activates 14 regions of the brain, whilst ineffective leadership activates only six, shutting down a further 11 areas of the brain.
What does this mean for leaders in practice? In The Neuroscience of Leadership Behaviour and Teamwork, Talan Miller presents research showing that the social brain prioritises leaders who are not perceived as a threat and who do not trigger feelings of injustice, anger or frustration. Talan identifies five requirements of the human social brain, which are:
High trust organisations enjoy 76% higher employee engagement, 50% higher productivity and 40% less burnout, according to Zak. To start enjoying these benefits, the neuroscientist outlines eight management behaviours that leaders can adopt that foster trust. They are summarised below.
1. Recognise excellence
Neuroscience shows that recognition is most effective at building trust when it takes place immediately after completion of a goal, is publicly shared by peers, is tangible and personal.
2. Introduce ‘challenge stress’
Difficult but achievable goals create moderate stress, releasing oxytocin and adrenocorticotropin, which intensify people’s focus and strengthen social connections. A Harvard Business School study by Teresa Amabile found that 76% of employee satisfaction is linked to progress against goals.
3. Allow autonomy
A 2014 CitiGroup and LinkedIn survey found that almost half of employees would sacrifice a 20% salary increase for greater control over how they work. Being trusted to figure things out is a major motivator, and an important enabler of innovation.
4. Enable job crafting
Whilst maintaining accountability for performance, allowing your people to focus on what they care about creates purpose which maximises productivity.
5. Share information widely
Since the pandemic, less than half of workers (39%) say they have access to the information they need to carry out their work successfully (Sinequa). A 2015 study of 2.5 million teams showed that daily communication with supervisors improved employee engagement.
6. Be intentional about relationship-building
When people intentionally build social ties at work, their performance improves (Zak). A Google study concurs, finding that managers who “express interest in and concern for team members’ success and personal well-being” outperform in both the quality and quantity of work.
7. Facilitate personal and professional development
Studies show that professional development is more successful when it is teamed with personal growth (Zak). Accenture and Adobe Systems both take this approach in manager feedback and personal development reviews.
8. Show vulnerability
Asking for help is powerful because it taps into the human instinct to cooperate with others. Research shows that requests for help increase oxytocin production, leading to enhanced collaboration with others (Zak).
Wondering how your talent culture compares against global benchmarks? Download the Global Report: ‘The Talent Culture Timebomb’.