People

The Emotional Intelligence Economy: EQ As the New Workplace Currency

Sarah Greesonbach

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Emotional intelligence is emerging as a vital workplace skill, shaping how employees interact, leaders inspire, and teams achieve their goals. By fostering self-awareness, empathy, and effective communication, organizations not only enhance collaboration and employee well-being but also create a culture that drives engagement, innovation and talent retention.

As an people leader, you're responsible for the culture of your organization. But the people with the biggest impact on it are first-line managers. Greater emotional intelligence in the workplace can help them have more informed, productive conversations with associates — and contribute various other benefits to your organization.

Organizations that prioritize emotional intelligence see benefits to communication and engagement. They also contribute to a growth-oriented culture where mistakes are seen as learning opportunities and employees stay calm under pressure, boosting morale and encouraging risk-taking for innovation.

In a world of work where collaboration, innovation, and adaptability are essential skills to remain resilient in the face of constant change — and trust is a cornerstone of employee loyalty and well-being — emotional intelligence shapes how employees interact, how leaders inspire, and how effectively teams achieve their goals.

Here's how to train up more emotionally intelligent leaders in the workplace.

Defining emotional intelligence for the workplace

At its core, emotional intelligence is the ability to recognize, understand, and manage emotions while also being attuned to the emotions of others. In the workplace, this means managers and leaders use emotional awareness to inform communication, encourage collaboration and nurture relationships.

Unlike intelligence quotient, or IQ, which focuses on cognitive abilities like problem-solving, emotional intelligence emphasizes interpersonal and intrapersonal skills. While IQ might help someone problem-solve their way to the most brilliant solution, EQ ensures they can communicate that solution effectively and rally others behind it. With the current political and economic tensions, being able to build bridges and lead with empathy is arguably more essential than ever.

Unfortunately, not everyone comes into the workplace with a high level of emotional intelligence. This leads organizations to an important question — can it be learned on the job? And can it be improved upon within an organization? The answer is yes.

The key components of emotional intelligence

Emotional intelligence can be broken into four core components, each of which is critical in workplace communication and relationships. Leaders can focus on each of these characteristics to encourage more EQ in themselves and among first-line managers, who, in turn, can develop more nurturing relationships with their employees.

1. Self-awareness - Self-awareness is about understanding emotions and how they influence behavior. For example, a leader who feels nervous before a presentation acknowledges this emotion and uses it as motivation to prepare thoroughly instead of ignoring feelings of anxiety and "pushing through," which may or may not deliver good results. Without self-awareness, emotions can sabotage an individual's ability to perform, contribute, or tap into their hard-won expertise.
2. Self-management - Self-management is the ability to regulate emotions, especially in high-pressure situations. Consider a manager who receives disappointing news about a project or a negative timeline update. Instead of reacting angrily, an emotionally aware manager takes a moment to process their emotions and then addresses the team calmly and clearly.
3. Social awareness - Social awareness involves understanding and empathizing with the emotions of others. It requires paying attention to verbal and non-verbal cues, such as body language or tone of voice. This is also referred to as "active listening," where an individual focuses attention on who is speaking and aims to reflect back on what they heard instead of passively hearing them out.
4. Relationship management - Strong relationship management is about building trust, resolving conflicts, and maintaining positive workplace dynamics. Relationship management also considers the tone of communication, as how something is said is a big part of how the message is received.

Wide-reaching benefits of emotional intelligence

The advantages of emotional intelligence in the workplace are far-reaching, impacting both individual and organizational success.

1. Improved communication - Employees with high EQ excel at both verbal and non-verbal communication. For instance, a team member presenting an idea may use clear language and read the room to gauge interest, adjusting their approach as needed.
2. Stronger team dynamics - Emotional intelligence reduces misunderstandings and fosters harmony. For example, teams with high EQ are better equipped to navigate cultural or personality differences, turning potential conflicts into opportunities for growth.
3. Higher employee engagement - Leaders who prioritize EQ create environments where employees feel valued. An engaged employee is more likely to go above and beyond, whether helping a colleague or contributing innovative ideas.
4. Greater employee well-being - When employees feel respected, supported, and understood, they're more likely to stay loyal to the organization. Recent ADP data reveals that employees who feel cared for by their employer are 92% more likely to feel engaged at work and 65% more likely to remain loyal.

How to improve emotional intelligence in the workplace

Improving emotional intelligence among managers requires you to commit to understanding and valuing the individual needs and perspectives of others. It's not just about improving their emotional intelligence; it's about creating an environment where it thrives. Here are meaningful actions managers can take to improve emotional intelligence in the workplace.

• Encourage self-awareness and self-reflection - Encouraging self-awareness within the organization is a simple yet effective way to help employees and leaders become aware of emotional patterns and identify triggers. Journaling with structured prompts, team-building and conversation can help develop awareness and reflection as company values. Practices like mindfulness, deep breathing or simply taking short breaks during the day can improve self-management. Managers can also try pausing before responding, stepping away from their desk for a moment, or, if in a meeting — virtual or in-person — saying, "Let me take some time to process this and get back to you."
• Foster empathy - Team-building activities can also play a crucial role in cultivating empathy. Role-reversal exercises, for instance, allow team members to experience each other's challenges firsthand, fostering deeper understanding and collaboration. A team leader who notices a normally enthusiastic employee is quiet during meetings might check in privately to ask if they're okay. Then, they could listen to the answer carefully, noting the body language of the employee to fully understand what might be going on. This small act of attention and empathy can strengthen trust and show that the leader genuinely cares.
• Strengthen communication skills - Effective communication goes beyond words; it's about listening actively and responding thoughtfully. Hosting workshops on active listening can help employees practice techniques such as paraphrasing and asking clarifying questions. Using a critical tone that makes a colleague feel corrected or chastised will make it harder for managers to get their message across. It can also quite literally affect an employee's physical fight-or-flight response to a tense situation. Using a supportive tone with positive and empathetic language makes communication more effective while reducing stress and fostering a safe and inclusive environment.
• Take EQ assessments - Emotional intelligence assessments provide detailed insights into personal strengths and growth areas. Organizations can also use these assessments to identify broader trends, such as low empathy scores in a team, and tailor professional development initiatives to address those needs.

Building a workplace culture rooted in emotional intelligence

If you want to improve the employee experience, focusing on emotional intelligence within yourself and your management team is a logical and impactful place to start. Emotionally intelligent leaders bring clarity and structure to their teams by fostering an environment where employees feel supported and valued. The result isn't just higher engagement or improved morale but rather a measurable boost in performance, retention, and overall workplace effectiveness, ultimately creating a culture where everyone can do their best work.

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