Shaping the Future: The Essential Role of Human-Centred Leadership? in Building Thriving Workplaces

"In today's dynamic business environment, the imperative to adopt a human-centred approach in leadership and workplace culture is clear, with its transformative impact evident on employee well-being, organizational resilience, and productivity"

Let's start with the why

• Psychological Injury Claims: Approximately 7,200 claims annually in Australia, costing the economy up to $60 billion.
• Employee Engagement: 85% of employees are not engaged or are actively disengaged at work, leading to a global productivity loss of about $7 trillion.
• Leadership Crisis: 69% of employees dissatisfied with senior management will likely leave within a year; 58% trust a stranger more than their boss.

In today's dynamic and challenging business environment, the urgency to embrace a human-centred approach in leadership and workplace culture has never been greater. The rise in psychological workplace injuries, declining employee engagement, recruitment challenges, stakeholder pressure and a leadership trust crisis are not just alarming trends but stark realities that organisations globally are grappling with.

In this article, we delve into the challenges workplaces face and how adopting a human-centred approach to business can transform employee wellbeing, organisational resilience and overall productivity, setting your people and your business up for success in 2024 and beyond.

Recognising that empowering organisations and individuals to thrive involves more than just intention; it requires a strategic and human-centred response to the global, deep-seated challenges workplaces face. Deanne Boules, Founder & Chief Enabling Officer, Insync Workplace Solutions.

The Rise of Psychological Injury Claims and its Impact on Business

A critical and concerning trend in today's workplace is the alarming rise of psychological injury claims. Safe Work Australia reports that work-related mental health conditions have become a significant concern, accounting for approximately 7,200 compensation claims each year in Australia. These claims represent a substantial financial burden and a profound impact on employee wellbeing and organisational productivity. The Australian Productivity Commission estimates that mental health challenges in the workplace cost the Australian economy up to $60 billion annually.

This increase in psychological injury claims is more than a matter of individual employee health; it often signifies deeper systemic issues prevalent within organisational cultures and leadership styles. Traditional business models, which often prioritise profits and productivity, tend to overlook the importance of employee mental health, leading to work environments rife with stress, burnout, and other mental health challenges. The consequences of such neglect are far-reaching, impacting not just the human aspect but manifesting in increased absenteeism, high turnover rates, and a notable decline in productivity.

At the root of these issues is a failure to adequately prioritise and invest in psychological safety and employee wellbeing. This oversight highlights the urgent need for a shift in how businesses approach workplace culture and employee management, underscoring the critical role of psychological safety in creating sustainable and thriving work environments.

The Leadership Crisis – The Impact of Poor Leadership and Organisational Culture

Organisational culture is fundamentally shaped by its leaders. A well-known adage in business is 'Your culture is your brand; it eats strategy for breakfast, lunch, and dinner.' Despite the profound truth of this saying, many senior leaders still fail to recognise the significance of culture and their critical role in nurturing or undermining it.

A Deloitte study highlights that 69% of employees dissatisfied with their senior management are likely to leave their jobs within the following year. Furthermore, the Harvard Business Review reported that 58% of employees trust a stranger more than their boss. These alarming statistics underscore a crisis of confidence in leadership, underscoring the urgent need for a shift toward more supportive and empathetic leadership styles that prioritise psychological safety and employee wellbeing.

Reflecting on a recent experience in an Executive Leadership team meeting brings this issue into sharp focus. The topic of psychological safety was raised, and the CEO's abrupt dismissal of its existence ('there is no such thing as psychological safety) immediately changed the room's dynamics. The ensuing silence was profound. Suddenly, no one felt comfortable expressing their feelings, discussing their challenges, or offering diverse perspectives. This incident vividly illustrates how leadership attitudes directly influence the level of openness and psychological safety within a team, along with its ripple effects.

In another telling instance, a senior leader I was coaching, despite her decade-long tenure at the organisation, shared her sense of powerlessness in effecting change. She confided, 'There is no psychological safety in our executive team, so how can we build a psychologically safe work environment for our workers?' This sentiment highlights a broader issue: when the highest levels of leadership in an organisation lack an understanding of psychological safety and its critical importance for organisational success, this deficiency adversely affects the entire organisation, from top to bottom.

The High Cost of Low Employee Engagement

Employee engagement is another critical area where many businesses are facing significant challenges. According to Gallup's State of the Global Workplace report, a staggering 85% of employees are not engaged or are actively disengaged at work. This lack of engagement is not just a workforce issue; it translates into a global loss of approximately $7 trillion in productivity. Such widespread disengagement suggests a deeper, more systemic problem within the modern workplace.

This disengagement often stems from a work environment lacking human-centred practices. Employees today seek more than just a paycheck; they aspire to work in settings that provide adequate support, recognition, and opportunities for growth and development. They want to feel valued and have a sense of purpose and belonging; when these elements are missing, employees feel undervalued and disconnected, leading to diminished interest and investment in their work.

The consequences of low engagement extend beyond financial losses. Disengaged employees often exhibit lower morale, decreased motivation, and a higher propensity for errors, which can negatively impact the quality of work and customer service. Furthermore, disengagement can lead to higher turnover rates, with the cost of replacing an employee ranging from one-half to two times the employee's annual salary, according to a study by the Society for Human Resource Management.

The issue of employee disengagement is further compounded by its contagious nature, leading to a domino effect within the workplace. This situation often creates an environment where even the most dedicated employees experience a decline in motivation and satisfaction. A common cause of this erosion is the perception that they are being forced to 'pick up the slack' for their disengaged colleagues. This leads to increased workload and fosters conflict and resentment among team members. Consequently, what begins as individual disengagement can rapidly escalate into a widespread decline in team spirit and productivity, affecting the entire organisational dynamic.

Understanding the factors contributing to this widespread disengagement is crucial for businesses. It points to a need for a deeper examination of how modern workplaces fail to meet their workforce's evolving expectations and needs.

ESG Principles and the Social Responsibility of Modern Organisations

In the context of the current challenges in leadership and employee engagement, another critical aspect that organisations must address is their commitment to Environmental, Social, and Governance (ESG) principles, particularly the 'Social' component. This aspect is increasingly becoming a focal point for employees, shareholders, stakeholders, and the community, who expect organisations to demonstrate strong social responsibility.

The 'Social' in ESG is deeply intertwined with creating a healthy, inclusive, and respectful workplace. It encompasses diversity and inclusion, ensuring that the workforce reflects the varied backgrounds and perspectives of the broader community. This aligns with the need for empathetic and inclusive leadership, as diverse perspectives can only thrive in a respected and valued environment.

Moreover, the social aspect of ESG extends to upholding human rights, including preventing modern slavery and ensuring no tolerance for discrimination, bullying, or harassment. These issues are not only about legal compliance but are integral to building a culture of psychological safety, which is crucial for employee engagement and organisational success.

Respect for First Nations and cultural heritage is another essential element, reflecting the broader societal move towards greater cultural sensitivity and inclusivity. This respect must be embedded into the organisation's ethos, influencing policies, practices, and leadership behaviours.

Finally, the focus on health and safety under the social component of ESG aligns with the growing concern over psychological injuries in the workplace. Organisations must prioritise physical and mental wellbeing, recognising that a safe and healthy work environment is fundamental to employee engagement and productivity.

Incorporating these social responsibilities into the fabric of an organisation is not just about meeting stakeholder expectations. It is a strategic move that directly impacts leadership effectiveness, employee engagement, and the long-term sustainability and success of the organisation.

The Shift to Human-Centred Workplaces: A Necessity for Resilience and Growth

Adopting a human-centred approach is not just about improving employee satisfaction; it is about building resilience and fostering growth. According to McKinsey, companies focusing on employee wellbeing outperform the market by 2-3% annually. Additionally, the American Psychological Association found that highly valued employees who feel cared for by their organisation are 60% more motivated to do their best work.

The Power of Human-Centred Leadership?

The challenges of modern workplaces call for a transformation in leadership styles. It requires a more human-centred approach. Human-centred leadership goes beyond traditional metrics of success. It is about putting people first.

Human-centred leadership? is characterised by empathy, emotional intelligence and a genuine commitment to the psychical and psychological health, safety and wellbeing or employees, valuing the unique perspectives everyone contributes. It is about recognising that the success of an organisation is intrinsically linked to the wellbeing of its people. When leaders adopt this approach, they create an environment where employees feel genuinely supported and understood. This nurturing atmosphere fosters increased morale, higher levels of engagement, and enhanced productivity.

However, transitioning to human-centred leadership is not without its challenges. It disrupts the status quo, necessitates a critical re-evaluation of long-standing norms, and calls for profound, sometimes uncomfortable, organisational introspection. Embracing this leadership style requires not just a change in actions but a transformation in thought, acknowledging the significant role that emotional and relational factors play in the success of a business.

Building Resilience and Fostering a Sense of Purpose and Belonging

Creating a workplace environment that enhances resilience is a significant challenge for many organisations, particularly when leaders and employees may resist new approaches, especially if they feel undervalued, unheard or that it is just an act of 'tokenism' by the organisation to 'tick a box'. Additionally, fostering a sense of purpose and belonging in a diverse workforce with varied motivations and backgrounds is a nuanced endeavour. Leaders must be deeply attuned to their team members' diverse needs and aspirations.

Adopting a human-centred approach is critical to significantly boosting workforce resilience. When employees feel that their individuality is understood and valued, they are inherently more resilient in facing challenges. This sense of being valued helps them cope with difficulties and enhances their engagement and dedication to their work.

Furthermore, cultivating a sense of purpose and belonging within the organisation is essential. When employees perceive their work as meaningful and recognise their role within the organisation's larger objectives, they are motivated to contribute their best efforts. This boosts productivity and sparks innovation, as employees are driven by a clear understanding of how their work contributes to the organisation's broader goals.

Integrating Human-Centred Values in HR and Safety Initiatives

Integrating human-centred values into HR and safety initiatives is crucial for building integrated employee experiences. These experiences aim to streamline systems and processes, removing complexities that often hinder innovation and growth. However, introducing these values often encounters resistance, particularly within organisations that adhere to traditional thinking in HR and safety practices. Implementing change in long-standing practices and policies is not only a matter of time but also requires a willingness to embrace new methodologies and approaches.

Continuous effort is needed to ensure these human-centred values are more than just theoretical concepts or written policies. They need to be part of the lived experience within the organisation. This involves recognising that physical and psychological safety are not separate entities but deeply interconnected aspects of employee wellbeing. By cultivating a culture of safety that extends beyond mere compliance and genuinely cares for the wellbeing of employees, organisations can mitigate risks associated with both physical and psychological harm. This approach not only enhances the safety and health of employees but also contributes positively to the overall organisational culture.

The Role of Coaching and Change Management

Coaching and change management are integral to the development of a human-centred workplace. Personalised coaching is pivotal in helping individuals realise their full potential. It aligns personal goals with organisational objectives, fostering a deep sense of engagement and purpose.

Change management, conversely, involves navigating the complexities of organisational change with a focus on the human element. Recognising and addressing the human side of change is essential in helping individuals adapt and thrive, which is crucial for the success and sustainability of change initiatives.

While implementing effective coaching and managing organisational change are critical components of a human-centred approach, these processes are complex and multifaceted. Personalised coaching requires significant resources, and its positive outcomes might not be immediately apparent. Moreover, managing change while maintaining a focus on human aspects presents its own challenges, particularly in environments that are resistant to change due to comfort with established procedures and norms. This resistance can be a significant barrier to transforming workplace culture into one that genuinely prioritises and values the human elements of work.

Final Thoughts: Overcoming Challenges for a Human-Centred Workplace – The Path to a Thriving, Inclusive, Psychically and Psychologically Safe Workplace.

Navigating the path to a human-centred workplace characterised by inclusivity, resilience, and physical and psychological safety is undoubtedly complex. At Insync Workplace Solutions, we recognise the multifaceted nature of this journey. It demands a steadfast commitment to shifting mindsets, embracing new strategies, and engaging continuously with employees at every level of the organisation.

Addressing the challenges outlined in this article head-on is crucial for transforming into a human-centred workplace. By doing so, organisations can foster environments where employees are safe and fulfilled and become active participants in cultivating a culture of inclusivity, innovation, and high performance. The rewards of navigating these obstacles are substantial—a more resilient, productive, and morally engaged workforce significantly contributing to the organisation's overall success.

Transitioning to human-centred leadership and business practices is a moral and strategic necessity. At Insync Workplace Solutions, we are steadfast in our belief in the transformative power of such an approach. Our goal is to guide organisations in creating environments where every individual can bring their authentic selves to work, feel a profound sense of purpose and belonging, and leave each day feeling fulfilled. In this endeavour, organisations do not merely enhance their resilience and productivity; they also play a pivotal role in constructing a more compassionate and inclusive world of work.

Through our comprehensive leadership, HR, safety, training, coaching, change, and investigations programs, we are dedicated to supporting organisations in this vital transition. The journey towards a human-centred workplace is challenging, yet the benefits are immeasurable, paving the way for a more humane, effective, and thriving organisational culture.

Take the First Step Towards Transformative Change

Are you ready to embark on the transformative journey towards a more human-centred workplace? At Insync Workplace Solutions, we are here to guide, support and hold your hand every step of the way. Our comprehensive suite of leadership, HR, safety, training, coaching, change, and investigations programs is designed to address your organisation's unique challenges.

Connect with us today to explore how we can partner with you to create a thriving, inclusive, and safe work environment. We can build a workplace where every employee feels valued, engaged, and equipped to contribute to your organisation's success. Let's make the shift towards a more compassionate and resilient future of work.

Contact Insync Workplace Solutions now to start your journey to a human-centred workplace.