Leadership Psychosocial Skills are Essential for Building Engaged and Productive Teams

The workplace is rapidly evolving and companies are more reliant on the competitive advantage of engaged, high-performing people now more than ever. And yet, collectively, much of today's workforce are stressed, disengaged, and neglecting to properly nurture their energy and creativity.

The emotional intelligence skills of your leaders, and the workplace environment they create is becoming more critical for success. Understanding how to create a positive psychosocial climate enhances employee engagement, performance, and wellbeing.

Emotional intelligence (EI) is the ability to perceive, understand, manage, and regulate emotions. It's not just a soft skill; it's a measurable factor that significantly affects how teams perform and how individuals feel at work.

Emotional Intelligence is a Modern Leadership Superpower

A Leadership Superpower

Research by TalentSmart shows that 90% of top performers have high emotional intelligence, while just 20% of low performers do. Leaders with high EI are better at managing stress, communicating clearly, resolving conflict, and inspiring trust — all of which are essential for building high-performing teams. A Harvard Business Review study further supports this, noting that EI is twice as important as technical skills or IQ for successful leadership.

Leaders who demonstrate empathy, self-awareness, and emotional regulation create a ripple effect. According to a study published in the Journal of Occupational Health Psychology, emotionally intelligent leaders are more likely to foster employee engagement by supporting autonomy, competence, and relatedness — core psychological needs that, when met, fuel motivation and job satisfaction.

Why a Positive Psychosocial Work Environment is Critical to Performance

A psychosocially safe workplace is one where employees feel respected, valued, and psychologically secure. This includes protection from chronic stressors such as bullying, discrimination, unrealistic workloads, and poor communication. The World Health Organization (WHO) emphasizes that psychosocial factors at work, including leadership style, social support, and job demands, are key determinants of mental health.

Creating a culture that promotes psychological safety — where team members feel comfortable expressing themselves without fear of embarrassment or retribution — has been linked to better learning, innovation, and productivity. Google’s landmark Project Aristotle found psychological safety to be the most critical factor in team success, even more than team members' individual intelligence or experience.

How it Impacts Engagement, Performance, and Wellbeing

When leaders invest in emotional intelligence and prioritize psychosocial wellbeing, the payoff is substantial. A Gallup meta-analysis found that engaged employees show 21% greater profitability, 17% higher productivity, and 41% lower absenteeism. These outcomes are directly tied to environments where employees feel seen, heard, and supported.

Moreover, the American Psychological Association’s 2023 Work and Wellbeing Survey found that employees who felt supported by their employer’s mental health initiatives were more than twice as likely to feel motivated to do their best at work. In contrast, toxic workplace cultures can significantly raise the risk of burnout, with Deloitte reporting that 77% of employees have experienced burnout at their current job.

Building the Foundation

Leaders are a critical factor for improving psychosocial conditions in the workplace. When leaders develop skills relating to empathy, communication, and (perhaps one of the most overlooked parts), self-regulation, alongside other systemic efforts to reduce workplace stressors and support employee wellbeing, you build a foundation for sustainable performance.

Many leaders have elevated to their positions based on simple need, seniority, or operational skills, but many lack leadership psychosocial skills and strong engagement building capabilities.

HBD's Neuroscience for Human Performance programs not only enhance leader's abilities to better understand and manage their own wellbeing and performance; it also provides them unique insight and understanding into the stress response and brain reward systems that enable them to better engage and nurture healthier and higher performing teams.

HBD's tailored Neuroscience and Human Performance training programs enhance engagement, wellbeing, and performance.