Organizations Looking to Stem Resignations and Address Labor Shortages Should Invest More in Women

New research from Potential Project confirms that women leaders drive the best organizational outcomes for employees and the business

As millions resign from their jobs to seek opportunities elsewhere and organizations face a 15-year high in talent shortages, companies are racing to offer creative new perks and benefits to avoid the cost of losing talent. The better answer is to invest more in women leaders.

The latest study by Potential Project found that women leaders are more likely to embody “wise compassion”, the leadership style most likely to drive engaged, happy and productive teams and reduce the negative human capital costs that companies want to avoid. Wise compassion means the ability of leaders to do the hard things that come with their jobs while still remaining good human beings.

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The Human Leader study, which surveyed over 2,000 participants from more than a dozen industries, found that:

  • 55% of the women leaders in the study were ranked by their followers as being wise and compassionate, compared to only 27% of the men. Conversely, 56% of the male leaders in our study ranked poorly on wise compassion, landing in a quadrant called Ineffective Indifference.
  • When leaders leverage wise compassion at work, employee job satisfaction increases by 86%, job performance increases by 20%, and burnout improves by 64%.
  • Employee disengagement translates into significant organizational expense (due to absenteeism and lower productivity). Women leaders drive more engaged employees and save their organizations $1.4MM for every 1,000 employees (assuming an average salary of $60,000).

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“The pandemic delivered a crushing blow to women in the workforce, driving labor force exits and setting gender parity back by decades. This alone is problematic, but as organizations lose women leaders, they also risk losing the engagement and commitment of their workforce,” said Jacqueline Carter, Partner and North American Director at Potential Project. Marissa Afton, Potential Project’s Head of Global Accounts, added, “Our research shone a spotlight on women’s strengths as leaders, and their ability to do hard things in a human way, but this type of leadership is available to anyone who is motivated to change. Compassion can be learned.”

Jacqueline Carter and Marissa Afton are authors (along with Rasmus Hougaard and Moses Mohan) of Compassionate Leadership: How to Do Hard Things in a Human Way. The book — published by the Harvard Business Review Press — provides proprietary research and case studies exploring how leaders can build their own capacity for wisdom and compassion to boost their companies’ productivity and support sustainable cultures.

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