In a competitive business environment, the human aspect of leadership is a business imperative, not an option. Research suggests Britain’s workforce is facing an empathy gap, with serious impacts on productivity, talent retention and innovation.

The scale of the challenge is sobering as poor mental health costs the UK economy £110bn, according to the Centre for Mental Health. Despite growing investment in wellbeing initiatives including flexible working and mindfulness programs, mental health challenges persist. The recent TELUS Mental Health Index revealed that one third of UK workers feel anxious, three in ten feel isolated and more than twenty-five per cent feel depressed.

Wellbeing targets are just as important as sales targets and managers and leaders must prioritise them as they set workplace and cultural standards. Despite the influence senior leaders have on workplace culture, the Index found that two in five managers are unsure or would not know what to do if they suspected an employee was struggling with mental health, and nearly three in ten said they lack access to training on effective coaching and management techniques. This lack of preparedness leads to an empathy gap due to insufficient skills, support and resources.

The risks of an empathy gap
Leaders who fail to recognise and respond to the mental health needs of their workforce risk creating a culture of stigma, silence, mistrust and disengagement. Workers are less likely to speak up and 49 per cent of UK employees say they’re concerned about their career prospects if their workplace knew they had a mental health issue. Without open, empathetic communication, early warning signs go unnoticed, stress builds, absenteeism rises, and top talent leaves.

For entrepreneurs and decision-makers, this poses multiple business challenges that flow into each other. Diminished individual performance decreases organisational resilience, innovation suffers as employees are mentally exhausted and recruitment costs climb as talented people choose more supportive cultures.

The good news is workplace culture can be transformed and the transformation produces tangible benefits. Organisations that prioritise mental health and equip leaders with empathy-driven skills will see reduced absenteeism and boosted productivity through engaged, motivated teams. Trust is strengthened amongst teams helping to retain talent and drive innovation. Psychologically safe spaces encourage risk-taking and creativity.

Bridging the gap: Three actions for business leaders

1. Invest in training
Awareness and understanding of mental health conditions such as anxiety, depression and burnout helps managers identify early warning signs and intervene early, whether it’s increased sick leave, behavioural changes or a drop in productivity. Manager training should include tools on how to challenge mental health stigma, respond with sensitivity, respect privacy and provide support in improving their own wellbeing.

2. Active listening as a leadership practice
In a work environment where multiple priorities demand attention, managers should be skilled in asking open, compassionate questions, and acknowledging the feelings of their team without judgement or distractions. It’s key to identify the early signs of distress, and work collaboratively to address concerns with empathy. This is vital for building trust and drawing out issues before they escalate.

3. Communicate clear support pathways, consistently
Leaders must understand when and how to refer workers to resources such as Employee Assistance Programs, along with the types of support available for their teams. A young worker at the start of their career will have different challenges compared to a middle manager who just became a parent. Mental health and wellbeing is unique to the individual, so providing access to comprehensive solutions that cater to the needs of varying life stages is critical. Leaders must ensure policies on mental health support, counselling access, sick leave, and confidentiality are communicated clearly and often. Leaders should never take on the role of being a counsellor for employees’ personal challenges, but can and should be a strong support in guiding them to where professional support is available.

When entrepreneurs and executives demonstrate openness about mental health, take care of their own wellbeing and embody empathetic leadership consistently, they give permission for others to do the same. This shifts mental health support from a policy to a cultural norm.

The Leadership Imperative
The empathy gap in Britain’s workforce is as much of a human challenge as a strategic one. In an environment where mental health issues are widespread and costly, leaders who lack training are unintentionally contributing to a culture of silence and disengagement. By equipping managers with the tools and mindset to care for the whole human, UK businesses can unlock productivity, innovation, and resilience. Bridging the empathy gap builds a healthier workforce and ultimately a healthier bottom line.