Leading Through the Emotional Recession: Rebuilding Resilience in Today’s Workplace
Global EQ scores have fallen for four consecutive years, dropping by more than 5.5% — ushering in an Emotional Recession.
As organisations across Australia recover from recent global disruptions, one consequence has been largely overlooked: the decline in emotional intelligence (EQ) within the workplace. According to the State of the Heart 2024 report, global EQ scores have fallen for four consecutive years, dropping by more than 5.5%. This decline is ushering in what can be described as an Emotional Recession, where empathy, self-awareness, and interpersonal skills critical for leadership and collaboration are in short supply.
The impacts are profound: heightened burnout, reduced engagement, and weakened workplace cultures. Gallup’s Global Emotions 2024 report highlights that 40% of adults globally experience significant worry daily, and 37% face stress. In Australia, Deloitte’s 2024 Gen Z and Millennial Survey found that 30% of Australian Gen Zs and 28% of Australian millennials say that their job is a major contributor to their stress and anxiety. These stressors, exacerbated by fragmented work environments, are eroding team cohesion and resilience.
Why Leaders Must Understand Generational Differences
For the first time in history, workplaces span six generations—from the seasoned Silent Generation to the emerging Generation Alpha. This unprecedented age diversity presents both opportunities and challenges, particularly when it comes to emotional intelligence. Different generations have different approaches to communication, conflict resolution, and work culture, and leaders must be aware of these differences to foster inclusivity and collaboration.
The Deloitte 2024 Gen Z and Millennial Survey reveals a stark generational divide in emotional intelligence and workplace expectations. 50% of Australian Gen Zs have rejected assignments or job offers due to value misalignment, while 59% feel their mental health is not adequately supported by employers. In contrast, 74% of Australian millennials report relatively high levels of mental well-being. This disconnect between generations presents a challenge for leaders who must now navigate the varied emotional needs of their teams.
Understanding these differences is crucial for leaders because each generation brings unique strengths to the workplace. While older generations may have more developed emotional intelligence skills, younger workers offer fresh perspectives and a deep sense of purpose. Leaders who can harness these strengths and address the emotional needs of different generations will create more cohesive, resilient teams that thrive on innovation and collaboration.
Different generations have different approaches to communication, conflict resolution, and work culture, and leaders must be aware of these differences to foster inclusivity and collaboration.
Actionable Strategies to Reverse the Trend and Boost Team Cohesion
So, how can leaders reverse the decline in emotional intelligence and ensure their teams remain cohesive and high-performing? Here are some actionable strategies:
Invest in Emotional Intelligence Development:
Leaders must first develop their own emotional intelligence before expecting it from their teams. By investing in emotional intelligence development, leaders can learn to navigate their emotions and improve empathy, self-awareness, and communication skills. This investment should extend to teams as well, fostering a workplace culture where employees feel understood and valued. Leaders who lead with emotional intelligence will not only improve team dynamics but will also reduce the risk of burnout and disengagement. This training needs to be approached holistically, focusing on long-term personal growth rather than just short-term fixes.Foster Psychological Safety and Manage Psychosocial Risks:
Leaders must prioritise creating psychologically safe environments while proactively managing psychosocial risks like excessive workloads, low job control, and role ambiguity. Psychological safety is essential for fostering open communication, innovation, and collaboration, enabling employees to express concerns without fear of judgment or repercussions. Simultaneously, leaders need to address the root causes of stress and emotional exhaustion by identifying and mitigating psychosocial risks across the organisation. Proactively managing these hazards through clear frameworks and regular assessments ensures a safe, supportive environment where emotional intelligence can thrive. When employees feel safe and supported, they are more engaged, productive, and emotionally resilient.Foster Purpose-Driven Leadership:
Today’s workforce—especially younger generations—craves a sense of purpose. 88% of Australian Gen Zs and 95% of millennials say that having a sense of purpose is critical to their job satisfaction (Deloitte). Leaders must connect day-to-day tasks with a larger organisational vision, helping employees understand how their contributions align with a greater mission. This not only reduces emotional fatigue but also boosts long-term engagement and motivation. Purpose-driven leadership isn’t just about inspiring teams—it’s about embedding purpose at every level of the organisation.Encourage Cross-Generational Collaboration:
Leaders must also encourage cross-generational collaboration to bridge the emotional intelligence gap. By creating opportunities for mentorship and reverse mentoring, where younger employees mentor older colleagues and vice versa, organisations can foster an exchange of ideas, values, and emotional intelligence skills. This approach can help younger employees develop emotional resilience while giving older employees fresh perspectives on innovation and change.
Leading the Way to an Emotionally Resilient Future
The Emotional Recession presents both a challenge and an opportunity for leaders. It is no longer sufficient to rely on reactive, short-term fixes—leaders must embrace a holistic, macro-level approach that integrates emotional intelligence into the fabric of their organisations. By leading the charge, investing in emotional intelligence training, fostering psychological safety, and creating purpose-driven environments, leaders can reverse the emotional downturn that is eroding workplace culture and performance.
Ultimately, the future of work will be shaped by leaders who prioritise emotional resilience and well-being as key drivers of success. Now is the time for leaders to step forward, lead with empathy, and build organisations where every individual can reach their full potential.
As we face a global “emotional recession,” marked by low wellbeing and high burnout, developing emotional intelligence is more important than ever.
Our Emotional Intelligence Advantage initiative is designed to help you gain deeper insights into your emotional strengths, foster better connections, and enhance your decision-making. With personalised one-on-one debrief sessions from our experienced consultants, this initiative offers practical strategies and a tailored plan for continued growth. Whether you're managing stress, navigating difficult conversations, or building stronger relationships, mastering emotional intelligence gives you a significant advantage.