Few cinematic tropes capture the challenge of empathy like the classic body swap — most memorably brought to life in movies such as “Freaky Friday,” which has undergone several remakes and is now being revived in a sequel. In “Freaky Friday,” a mother and her teenage daughter predictably butt heads until they mysteriously wake up in each other’s bodies. Unable to determine how to switch back, they’re forced to experience daily frustrations from each other’s perspectives. Personal struggles and unspoken pressures come into focus as they walk a mile —literally — in someone else’s shoes. By the time they switch back, they’ve gained not only a new understanding of each other but also compassion for one another’s unique challenges, transforming their relationship.Movies aren’t the only place where empathy for others can lead to growth and better relationships. According to a recent study from the Center for Creative Leadership, when leaders in the workplace exercise empathy, it often results in greater employee satisfaction and performance. Indeed, according to research, empathetic leadership pays off in customers who are willing to reach out during their most vulnerable financial moments, and employees frequently report rising stress and burnout. Yet “empathetic leaders” within the financial institution are better equipped to spot early signs of burnout in their staff members, address staff well-being, and help their teams balance both innovation and resilience. These trends not only increase staff engagement and reduce turnover but also lock in customers and create a bond with new ones. Further, training staff to be more empathetic can go a long way in “de-escalating” tense or awkward situations with customers interacting with their organization. Recent research also refutes the idea that exercising empathy means avoiding tough choices. Empathy’s Impact on EmployeesEmpathy can result in more than customer and employee retention, according to research. Another study by Catalyst that surveyed nearly 900 employees discovered that — in addition to garnering better retention numbers, especially with women — empathetic managers were more likely to foster greater “innovation” among their direct reports (61% of employees being more innovative with empathetic managers, as compared to just 13% innovating with less empathetic managers). More than three-quarters (76%) of employees who felt their bosses were empathetic felt engaged, as opposed to less than one-third of employees (32%) who experienced less empathy. Strategies for Increasing EmpathyGiven the positive impact empathetic leadership can have on your employees and your institution, there are countless reasons to start building a culture based on empathy today. Here are some ways your management team and others in the company can build their empathy skills:
- Practice active listening. It’s a common habit when listening to someone speak to focus firstly on formulating a response to them. In doing so, we may actually miss the intent of the person’s message. This is where active listening can come in handy. Active listening means resisting the urge to skip ahead to your response in favor of paying close attention to what’s being communicated. Some tips for active listening include paraphrasing what the other person said to verify that you interpreted their message correctly, paying attention to their nonverbal cues and body language to gauge their emotions and what they may not be saying, asking questions for clarification, and focusing on understanding rather than judging. Doing this when interacting with your direct reports can help make sure that your team members feel seen and heard. It can also help you get a better idea of what is needed or being asked for, so that you can provide the most effective solution.
- Conduct perspective-taking exercises. When considering a problem or a puzzle to solve, take a step back. Try and remove any biases you might have based on your own life experience and where you are in the workplace hierarchy. Fill those gaps in with any pressures, challenges, and barriers that the person you’re speaking to has expressed to you and even some roadblocks you’ve witnessed them experience. This shift in perspective should give you pause and help you understand where your teammate is feeling stuck and why.
- Create a supportive culture. Even if you haven’t mastered active listening, role playing, or any other tried-and-true empathy-building skills in the workplace, desiring to build them is a solid start. Making active choices in the culture of your team and organization to demonstrate that support is available makes a world of difference to someone who is struggling. One great example is having an open-door policy where teammates can seek out superiors whenever they need to for guidance on an issue they’ve encountered.
In today’s rapidly changing financial sector, empathy is no longer just “nice to have” — it’s a fundamental driver of lasting business success. Leaders who prioritize understanding and connection inspire higher engagement, foster innovation, and create stronger bonds with both customers and employees. By practicing active listening, embracing perspective-taking, and building a supportive workplace culture, banking professionals can empower their teams to navigate challenges with resilience and trust.
