Leaders can reduce talent attrition risk by creating a workplace where employees feel safe to speak up and take risks without fear of being blamed or criticized, says a new report from Boston Consulting Group.

Employees who feel psychologically safe at work are more likely to raise concerns about potential problems, admit mistakes, view failure as a growth opportunity and be their authentic selves, BCG found. These employees report feeling 2.1 times more motivated, 2.7 times happier and 3.3 times more enabled to reach their full potential at work.

They are also more likely to stay with the company: 12 percent of employees with the lowest levels of psychological safety said they were likely to quit within a year, compared to 3 percent who feel high levels of psychological safety.

BCG found that the positive effects of psychological safety are increased for diverse employee groups. Retention increases by more than four times for women and for employees who identify as Black, Indigenous, or people of color (BIPOC); by five times for people with disabilities; and by six times for LGBTQ+ employees. This is compared with an increase of two times in retention for men not in those groups.

The report also shows that empathetic leadership—a style of leadership that demonstrates an understanding of and respect for the perspectives, emotions and life situations of team members—is key to building psychological safety.

“Collective buy-in from the team is important, but leaders have an outsize impact when it comes to building psychological safety,” said Nadjia Yousif, chief diversity officer at BCG and a co-author of the report. “They set the tone by being role models and signaling what behaviors will be rewarded and what won’t be tolerated. Psychological safety can flourish only if it’s driven from the top.”

BCG’s report also shares some tips for cultivating psychological safety:

  • Formalize time for sharing and learning. At the start of meetings, carve out a few minutes for team members to share something new they’ve learned, an activity from their weekend or something personal from their life. Leaders are encouraged to share their own successes and challenges—research has shown that when leaders are vulnerable, it sets the tone for psychological safety in a team.
  • Hold regular team reflections or “retrospectives.” Provide opportunities to discuss what the team is doing well and how to improve.
  • Challenge ideas, not people. When delivering feedback, ensure that any criticism focuses on the quality of the work, not the person who did the work.
  • Be open and authentic. Leaders should candidly share their own mistakes and lessons learned with the team.
  • Address problems directly. Employees need to feel safe questioning ideas, policies and practices, even if this creates a certain amount of conflict or disagreement. Foster a culture of productive disagreement and debate.
  • Don’t force it. Remember that people have different comfort levels when it comes to sharing their thoughts and feelings. Create space for employees to share if and when they’re ready.

About the Study:

This research draws upon a survey of approximately 28,000 employees conducted by BCG over the summer and fall of 2022 in 16 countries: Australia, Brazil, China, Denmark, Finland, France, Germany, India, Italy, Japan, Norway, South Africa, Spain, Sweden, UK and the U.S. Survey respondents were part-time and full-time employees of companies with 1,000 or more employees. The participating companies spanned many industries. The survey captured self-reported data.