Psychological safety improves retention and wellbeing
Three tips and tricks from leaders at Finnish research center VTT.
Why You Should Care
Remote work has impacted employees’ sense of belonging, and made them feel disengaged at work.
This is leading to high attrition rates, dubbed the 'Great Resignation'.
Here's three ways that companies can build a culture of psychological safety, which, in turn, creates a more engaged workforce.
Workplace culture is in a pretty fragile state. Many people are struggling with reduced engagement and job satisfaction as a result of the pandemic, the ‘Great Resignation‘, and the intense competition over talent.
As a result, companies are finding it difficult to maintain a strong company culture, keep the employee experience high, and have teams performing at their best.
Why does this matter? According to SHRM, 90% of employees who believe their company’s culture is poor have considered quitting, compared with 32% of employees who believe the company’s culture is good.
And the overall feeling of disconnection and being overwhelmed is growing – Gartner shows us that just 24% of hybrid and remote workers feel connected to their company’s culture, while 53% of managers report that they’re burned out at work.
How does this affect businesses? Burnout is a human tragedy and employee turnover is expensive. Harvard Business Review estimates that the annual healthcare spending due to workplace burnout is anywhere from $125 billion to $190 billion. And the estimated replacement cost for the average worker is one-half to two times their annual salary.
But when organizations actively commit to wellbeing programs and invest in strengthening their culture, employees are 48% more likely to be loyal to the company.
Psychological safety is the key to high-performing teams
According to Harvard Business School professor Amy Edmonson, psychological safety is the most important factor in building strong cultures and high-performing teams. Psychological safety is the level to which employees feel comfortable voicing their ideas and opinions and how likely they are to be received and heard.
Organizations with high levels of psychological safety encourage team members to express opinions, offer new ideas, challenge the status quo, question decisions, take risks, and admit mistakes.
Essentially, people are free to speak up about their feelings without fear of humiliation or punishment.
Building this safety requires developing emotional agency – the awareness, understanding, and consideration of emotions in activities, interactions, and organizational practices. It is not a personality trait but a skill that can be developed.
Three tips for building and enhancing emotional agency
1. Commit to the vision and create structure
A vision without structure is just a poem. Leaders need to commit intentionally to improving their company’s culture – it can’t happen by just being at the office three days a week or having one whole company retreat.
Deciding to put employee experience first and become a great place to work requires the buy-in from every single leader and employee, and to improve daily, to make it happen.
Nothing will tangibly happen without a plan and commitment to making it happen. Like with any new skill, it takes time, and you need to practice it for at least three months.
Once you’ve decided on your new strategy as an organization – preferably using participative leadership so that everyone feels a part of the process and feels their contributions are valued – you need a structured program on how to start implementing the vision and how to communicate it to the company.
If the goal or target isn’t one sentence that everyone can articulate easily, then it’s not clear enough.
2. Embody the strategy in everything you do
Leaders are role models – this means that every leader, at every level of the organization, needs to display and encourage emotional agency consistently. You need to lead the emotional climate by example.
Some practical examples of this are regularly checking in with people to ask them how they’re doing, asking for feedback, demonstrating your concern and interest in them as people, and openly communicating how new ideas have impacted the company.
If you’ve made mistakes, own up to them – communicate how you feel, even if it’s a negative emotion.
Leaders need to have the guts to talk about what’s really happening and then show it in their daily actions. People need to see that you have their fears and concerns in your true interests.
If these types of behavior don’t happen publicly through a leader’s language and actions, team members won’t adopt or support this behavior or support others who do.
3. Encourage experimentation and tolerate risk
If you want to make a change in your company’s culture, experiments are a good way to implement them.
People are more open to change when it’s an experiment. They know it’s a test – if it goes well, it can be implemented long-term; if it doesn’t go well, you can bin it.
That said, you also need to give the experiment long enough to have an effect and understand if it’s working. Experiments can also be small or large in scale, depending on the change.
Ultimately, having a feeling of control gives employees a greater sense of relatedness and ownership of their work.
Companies must also tolerate risk and build a psychologically safe environment that supports risk-taking. Yet, you can’t innovate if you feel like you are not allowed to fail. By building emotional agency, you can improve the psychological safety of failure.
Another tip is to celebrate the failures! This could be through an event known as a Gala of Failures where everybody comes together to share their best failures, celebrate them, and laugh.
Fear is one of the biggest enemies of creativity, and organizations need to encourage people to experiment and try new things without fear of failure. And when failure inevitably happens, you can look at the human side of things and talk openly about it and learn.
For a company to truly succeed, employees must be aligned and connected to its culture. Organizations that successfully connect employees to their culture can increase employee performance by up to 37% and retention by up to 36%.
Yet, strengthening company culture and connectedness can’t happen through osmosis-like events, like being present at the office or company events.
Not only does a psychologically safe company culture help people feel engaged and improve the feeling of relatedness to their work, but it also attracts and retains the best talent, and drives an organization’s bottom line.
The International Festival of HR is back! Discover amazing speakers at UNLEASH America on 26-27 April 2023.
CHRO and SVP of HR
Nuotto is the CHRO and SVP Of HR at VTT, one of the leading technological research centers in Europe.
VP of marketing and communications
Santalo also co-leads a strategic pr Work @VTT, where the future of work is built through creative experiments.