What if empathy wasn’t just a “nice-to-have,” but a hard business asset with a price tag in the billions?
That’s the central finding from Businessolver’s 10th annual State of Workplace Empathy report, which reveals that companies failing to embed empathy into their culture may be hemorrhaging up to $180 billion annually through attrition, toxicity, and lost productivity.
Drawing on insights from over 26,000 CEOs, HR leaders, and employees over the last decade, the report offers a sobering—but ultimately optimistic—look at how empathy is evolving from soft sentiment to strategic differentiator.
Empathy Is Business, Not Charity
While 73% of employees now say their organizations are empathetic—a strong sign of improvement since 2016—the data also uncovers a significant perception gap. Over a quarter of employees (27%) view their companies as unempathetic. These workers are 1.5x more likely to switch jobs in the next six months and report 3x more workplace toxicity and 1.3x more mental health issues than peers in more supportive environments.
But this isn’t just a talent problem—it’s a leadership one. Employees who feel their companies lack empathy are 4x less connected to their CEO and 2x more likely to feel leadership is out of touch.
“Empathy isn’t just good for people—it’s good for business,” said Businessolver CEO Jon Shanahan. “Companies that fail to operationalize empathy are leaving $180 billion on the table.”
Empathy Is Losing Ground in the C-Suite
While the majority of employees may feel heard, CEO sentiment appears to be shifting in the opposite direction:
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Only 55% of CEOs believe empathy is undervalued—a 28-point drop year-over-year.
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59% now view empathy as a perk rather than a core business necessity—up 12 points from last year.
This disconnect raises a red flag for HR leaders. As flexible work, mental health, and DEI remain top-of-mind for employees, treating empathy as optional could prove to be a strategic misstep—especially amid record levels of turnover and hybrid workforce fatigue.
The Flexibility Gap: Empathy in Practice
It’s not just about talk—it’s about policies that reflect real life. When asked what workplace benefits most signal empathy:
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91% cited flexible work hours
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88% cited flexible work location
Yet only 29% of employees and 21% of HR leaders say they actually use flexible hours—compared to 41% of CEOs, suggesting a growing access vs. adoption gap.
Perhaps most striking:
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60% of remote/hybrid employees say they’d quit if forced back to the office full time
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51% of all respondents would take a pay cut for continued remote work
If empathy is measured by understanding workers’ realities, flexibility is the frontline test—and many organizations are still falling short.
Signs of Progress, But Work Remains
Despite the pitfalls, there’s a clear upward trend in how organizations are adapting:
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In 2016, 60% of employees said their employers were not evolving with household and workplace needs
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In 2025, 63% say employers are evolving
This shift points to real improvements in policy and culture—but also underscores the need for continued investment in empathetic practices, not just platitudes.
“Transparency, flexibility, benefits, and accountability aren’t just expressions of empathy—they’re business strategies,” said Shanahan. “Leaders may not intuitively know this, but they must respect it if they intend to grow.”
The Bottom Line
Empathy isn’t an HR initiative or a branding campaign—it’s a leadership strategy with bottom-line consequences. As Businessolver’s decade-long data set shows, organizations that treat empathy as a core operational principle stand to gain not just happier employees, but real ROI in the form of retention, productivity, and performance.
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