Three soft skills that will increase your company's profitby
Received wisdom is that soft skills have no tangible business benefits, but new research has proven that this is not the case. In fact, organisations that invest in developing these skills are actually more profitable – but which of all the soft skills offers the greatest returns?
According to the World Economic Forum, we are currently in the throes of a fourth industrial revolution that is set to fundamentally change how, where and why we work. Specialist, hard skills will become less valuable, replaced with those previously considered ‘soft skills’ such as creativity, emotional intelligence, complex problem solving and coordination with others.
Companies that invest in communication, coaching and personal development programmes have 35% more engaged employees and as a result 21% greater profitability.
In a world where automation, robotics, virtual reality and artificial intelligence will transform how businesses operate and scale, in order to stay relevant and valuable we have to embrace those skills that make us uniquely human.
What were previously considered soft skills, are fast becoming the hard specialisms of the future.
The hard impact of soft skills
Research from Gallup (which defines soft skills as “the natural capacity for excellence”) shows that companies that invest in communication, coaching and personal development programmes have 35% more engaged employees and as a result 21% greater profitability and some studies report soft skills training as yielding a 256% return on investment.
Tomas Chamorro-Premuzic, professor of business psychology at University College London (UCL) and Columbia University says, “people who are more emotionally intelligent and more interpersonally skilled have higher career success and higher levels of job performance [...] organisations need to hire them or they’ll work for your competitors and then you’ll lose out”.
Reducing time spent on managing interpersonal issues and improving customer experience are tangible benefits of developing in empathy.
Despite this, however, there is still a disconnect for many leaders in perceiving ‘soft skills’ as having a tangible impact on the bottom line. In recent market research of over 50 business leaders, the perception of soft skills training was that it is a corporate ‘nice to have’ and that the lasting impact of developing soft skills is disputed.
It’s no wonder that many leaders struggle to prioritise the different soft skills training available. Let’s begin by considering what soft skills are most likely to offer a tangible increase to the profit of your business, and why.
Empathy, the trait of being able to perceive the emotions and consider the perspective of others, feels like an essential skill in collaborative, high demand business environments. It is first worth noting that empathy is often perceived as a trait that some people do, or do not have. Research has shown, however, that we can learn empathy at any stage of life and we can enhance our own native empathic traits and increase empathic ability in different scenarios.
Being empathetic leaders and nurturing empathy within business is at the forefront of corporate conversation – although this is not just a trend. The need for empathy and its consequent positive impact is well documented. Research shows that a sense of being treated fairly is essential for collaboration and likewise if people sense they are being treated unfairly, they are more likely to punish people.
According to research into the biggest workplace challenges in 2020, scenarios that require collaboration and navigating interpersonal relationships are some of our biggest struggles, invariably resulting in significant wasted time and loss of efficiency. Reducing time spent on managing interpersonal issues and improving customer experience are tangible benefits of developing in empathy, resulting in companies seeing as much as a 43% increase in profit from incorporating empathy within their business.
Empathy is also considered to have a positive impact on mental health, easing away negative emotions such as frustration and resentment.
Fostering an empathic culture within your business will go a long way to helping colleagues resolve conflict, either internally or with external clients and suppliers, reducing time spent on managing interpersonal issues and increased staff and client retention, all actively impacting the bottom line.
Want to be a market leader in ever-changing, complex, dynamic landscapes? Then you have to be able to pivot, innovate and develop new products, services or messaging. The route to do this is through nurturing a creative culture within your business, where ideas are shared and welcomed across the whole team.
An Adobe study found that “companies that embrace creativity outperform peers and competitors on key business performance indicators, including revenue growth, market share, and talent acquisition”.
Research of over 130 top CEOs identified that CEOs differ from other executives primarily in their ‘willingness to take calculated risks’ and ‘actively and willingly seeks out new opportunities’.
Research from MIT Sloan School of Management found a significant correlation between the ideation rate and growth in profit or net income across 154 companies. In other words, the more you encourage divergent thinking from your team, the more profit you make.
Creativity researchers broadly define creativity as the ability to come up with new, original and unique ideas, whereas companies can often think of it as having a direct marketing or design output. Rather than thinking of ‘creativity’ as an elusive trait saved for a specific business or professional, instead think of creativity as what it is – simply the powerful ability to come up with new solutions, that has a huge benefit to any business, of any size, across any sector. Investing in establishing creative traits, processes and habits is essential to ensure your business remains at a competitive advance, now and in the future.
According to leadership expert Francisco Dao, “trying to teach leadership without first building confidence is like building a house on a foundation of sand”. Confidence underpins everything we do as professionals, whether that’s confidently selling products, compellingly sharing your company message, being a powerful brand advocate, communicating to clients or speaking up in meetings, confidence should be the first skill any business looks to develop within their teams, because without that, the practical implementation of other skills becomes harder. For example, why invest in creativity training if your team are too intimidated to share ideas? Why develop empathy in leaders unless they feel comfortable embracing authentic conversation?
Research of over 130 top CEOs identified that CEOs differ from other executives primarily in their ‘willingness to take calculated risks’ and ‘actively and willingly seeks out new opportunities’. This shows us that either confidence is a trait that helps people succeed to the very top of their professional careers and/or confidence is the primary trait that is required for top businesses to succeed.
Investing in confidence at a company wide level will have a tangible, direct impact on employees’ ability to reframe stressful situations as challenges and pursue new opportunities. It makes sense that self-esteem can affect an individuals salary as much as cognitive ability, so you can invest in hard specialist training, though if the participants do not have the sense that they are worthy or capable of delivering against expectation, that investment is not going to be as impactful as it could otherwise be.
Finally, it seems that business leaders are waking up to the fact that soft skills can equal hard profits – provided you invest in developing the right ones.
Interested in this topic? Read Soft skills: is it really that hard to measure their effectiveness?