Psychological safety leads to higher retention

Psychological safety leads to higher retention

The leadership of any organization is not only responsible for the business strategy and goals but also for shaping the organizational culture. How leaders interact with each other and their team members, make and communicate their decisions, the kind of behaviors and actions they recognize, and reward all goes into the making of the organizational culture. In today’s VUCA world, organizations need their workforce to be adaptable and resilient. However, this also requires companies and organizational leadership to be vested in the well -being of the employees, be empathetic and view them as individuals and not just human resources.

Mental wellbeing of the workforce necessitates psychological safety. A psychologically safe workplace also attracts the right talents and has higher retention rates.

The 2023 Gi Group Holding India report on this subject “The Safety Net: Supporting Well-being with Psychological Safety” looks in detail at how across Industry sectors and different cities of India both employers and employees view the concept of psychological safety.

By fostering a positive work culture, recognizing and addressing stressors, and providing resources for well-being, leaders can help employees develop resilience and cope effectively with challenges.

Psychological safety is not just a buzzword. Instead, Psychological Safety (or the lack of it) is actually a key component of any organization’s culture and resilience. It goes a long way in ensuring better employee retention and well- being. It is often stated that employees don’t leave organizations, they leave bosses. If organizations/leaders neglect this critical aspect, the results are not only poor engagement levels of the employees, erosion of employee value proposition for the organization but also increased attrition. On the other hand, when employees feel psychologically safe with in their workspace and work relationships, not only they perform enthusiastically and are more productivity, but the organization also sees lower attrition and better engagement levels.   When employees have psychological safety, they are also able to innovate, be more creative and take risks which always benefits the organization.

Based on the responses from a survey conducted amongst 500+ employers and 1000+ employees, we get a better understanding of how leaders can enable psychological safety and resilience for their teams.

 Open communication and a bias-free environment are critical in promoting psychological safety, according to both employee responses (74% and 65%) and employer responses (68% and 75%). Leadership qualities greatly contribute to psychological safety, as acknowledged by 71% of employers and Senior leaders, including C-level executives, bear a critical responsibility for psychological safety according to 43% of employees.

Also read: Tata Steel signs agreement with union; to pay Rs. 314.70 crore as annual bonus

Leadership styles play a significant role in fostering psychological safety, with supportive leadership (33%) and inclusive leadership (27%) being the most effective styles according to employee responses. The report also identifies the key qualities of ideal leaders, including emotional intelligence contributing to a psychologically safe environment (77% employee response), accountability for decisions and actions (72%), effective and transparent communication (44%), and modeling healthy interpersonal behaviors (42%). Effective communication is also crucial for establishing strong bonds, fostering collaboration, and building trust within teams.

By fostering a positive work culture, recognizing and addressing stressors, and providing resources for well-being, leaders can help employees develop resilience and cope effectively with challenges. Additionally, offering professional development opportunities and promoting a growth mindset further enhances employees’ confidence and ability to bounce back from setbacks. By practicing empathetic leadership, leaders can thus create a resilient workforce that is better equipped to handle adversity and maintain high levels of productivity and engagement.

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Sonal Arora

Country Manager, Gi Group Holding India

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Sonal Arora

Country Manager, Gi Group Holding India

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