The last two years have tested leaders in ways previously unthought of. In fact, it could be argued that the job description for C-Suite Leaders has been rewritten entirely; focusing on running a successful business today means being able to understand – and engage with – an ever-growing list of stakeholders on issues related not only to operations but broader impact. And employees have solidified their position at the top of this list. 

To understand how leaders are navigating these new expectations, we partnered with KRC Research to survey over 100 executives. And to hold them accountable, KRC Research also polled 500 employees on a variety of topics, including their perceptions of leader performance. 

What the executives are saying 

We found that – despite growing economic and societal pressures – leaders maintain a balanced outlook. While 57% say the current national economy is weak, 75% say their company is growing (and 21% say it’s staying the same). 

More than three quarters of leaders (76%) see workforce development, reducing employee turnover and talent retention as a key buffer against recession – significantly more than any other area. 

So it’s not surprising that three of the top-four areas of focus that these leaders are building into 2023 business planning are centered around employees, from attracting and retaining them (74%), to getting them to adopt new technologies (57%), to engaging and empowering them (41%).  

BUT leaders are clear-eyed on their limitations. Only 13-24% of leaders believe that they are performing very well in these areas. And they are right to be worried.  

How this compares to employee perceptions 

Employees also have a balanced outlook on their companies’ ability to weather the current environment. Though slightly less bullish, more employees are optimistic (31%) than pessimistic (16%) about the future success of their organization. This is reversed when it comes to the over-all economy, where more are pessimistic (38%) than optimistic (26%).   

As far as employees’ personal experience at work, there are several red flags that leaders should be watching out for. About half worry about their mental health and wellness (55%) and turnover within their organization (50%). More than a third fear more layoffs (39%) including impact to their own jobs (36%).   

Even so, a vast majority (75%) say that they that their employer is taking the right steps to preserve jobs in an economic downturn and that they feel loyal to their employer (74%). But that isn’t stopping them from looking. Nearly 60% plan to change jobs over the next few years, including nearly one in five (19%) in the next year.   

Keys to employee retention/attraction  

One area where leaders and employees are aligned is the increasing importance of advancing not only business but society. Nearly six in 10 (59%) leaders report that their employees expect them to take a stand on societal issues, and that this is a critical piece of their ability to attract and retain them. Nearly six in 10 employees (59%) say that companies have a responsibility to speak up.  

But that doesn’t tell the full story. When drilling down further, a bigger majority of employees identify as important a wide range of specific issues. For example, about eight in 10 believe their employers should give back to local communities (82%) and make company decisions that are sustainable and protect the environment and climate (78%). Three in four think companies should advance racial equality and address systemic racism (74%). Far less – six in 10 – think their employer is doing a good job addressing these issues.  

It’s no surprise. Just one in eight leaders (14%) feels very equipped to address social issues.  

Both employees and leaders also recognize the importance of company culture. But while 90% of leaders feel equipped to ensure employee wellbeing, only 59% of employees feel like mental health and wellness is being prioritized within their organization. Similarly, while 86% of leaders are confident in their ability to conduct the company ethically and transparently, far fewer employees (67%) give leaders positive marks on this same topic; only two thirds (67%) also think leaders are doing a good job communicating company values and having zero tolerance for discrimination and harassment.  

A call to action 

It’s encouraging to see that leaders have become more self-aware of their shortcomings related to expanded expectations of their role. But it’s not enough to diagnose the problem – leaders now have to solve it. Offering guidance to leaders on where to focus their efforts are employees, who are becoming more vocal about their needs (and also creating more reputational risk when they don’t feel heard).  

Here’s where leaders should be focusing:  

• Even as budgets might be tightening, now is the time for leaders to get more comfortable by making strategic investments related to both education and action. Investments in their own learning and development related to cultural IQ – and in implementing those learnings – will pay dividends. 

• Leaders should be auditing their business practices to determine where improvements can be made to foster engagement and belonging, and ultimately productivity. Tackling topics related to establishing a supportive culture and aligning business resources against making impact on broader societal issues will often require some level of organizational change or transformation, from refreshing values to investing in diversity, equity and inclusion to designing and implementing new strategies and supporting business models.  

• While action should come first, the full benefit won’t be realized without effective communication. Leaders should continue to build their skills as effective communicators, also prioritizing opportunities to engage directly with their key stakeholders and especially employees. This doesn’t just mean touting successes – leaders must also actively listen and put into context why decisions are being made and how they will impact the business and society.  

In order to keep employees engaged, aligned, motivated and – most importantly – within the organization, leaders need to continue to support not only them, but their communities. And not only around issues related to the business, but in advancing culture and achieving impact on the issues they care about. With leaders’ ability to emerge stronger amid economic uncertainty hinging on their ability to do so, advancing culture and addressing societal issues should be at the top of every leader’s agenda in 2023.