Organizations that prioritize inclusion, connection, and well-being consistently see stronger collaboration, better performance, and improved retention.
By Maggie Mancini
With businesses navigating uncertain economic conditions, employees are increasingly hunkering down in their current roles, and the voluntary quit rate has fallen as a result. As employers and workers both attempt to make the most of a tight job market, one thing is clear: High retention doesn’t always translate to high productivity.
This is particularly true if employees are staying in their jobs out of fear rather than because they are aligned with their company’s mission and values. For HR leaders facing this dilemma, improving psychological safety in the workplace can help strengthen and boost productivity, particularly among employees who are reluctantly staying in their current positions.
“Psychological safety is like oxygen in the workplace,” says Rebecca Perrault, global vice president of culture, diversity, and sustainability at Magnit. “You don’t notice it until it’s gone. When it’s strong, turnover risk drops dramatically, but when psychological safety isn’t made a priority, employees often don’t stick around and those that do are more likely to struggle with productivity and creativity.”
In fact, according to a study from Boston Consulting Group, workplace attrition falls from 12% to 3% when employees feel safe speaking up. That’s not just an anecdotal or cultural impact, Perrault says; it’s a measurable improvement to the bottom line.
Employees in psychologically safe work environments feel comfortable offering their opinions, suggesting ideas, asking questions, and raising concerns without fear of negative consequences, reports the Harvard Business School. This often means that workers feel able to take risks and make mistakes in pursuit of learning and development, which can boost performance, creativity, and job satisfaction.
“I often describe inclusivity as a muscle, because the more you see it, the stronger it gets,” Perrault explains. “Psychological safety works the same way. When people don’t waste energy calculating the risk of speaking up, they’re free to stretch, experiment, and build on each other’s ideas. That’s where innovation lives and the research backs it up.”
Companies with high psychological safety consistently see stronger collaboration, better productivity, and greater retention. It’s proof that investing in the practices and infrastructure that not only prioritize but actively encourage humanity at work are also what drive sustainable performance, she says.
When it comes to measuring key workforce metrics like engagement, productivity, and retention, net promoter scores (NPS) are a fundamental but surface-level check that may make the waters look calm, even as strong currents are putting people away, Perrault says. To understand the employee experience, leaders should look deeper and think outside the box of industry norms and standard measurement tools, she explains.
“Pulse surveys, mobility trends, and employee resource group participation are just a few examples of metrics better suited to reveal what’s really going on in the workforce,” she says. “They provide concrete evidence of whether people feel safe, connected, and included, which are the factors that truly predict retention. Leaders who only look at NPS are more likely to miss these signals of trust and growth that determine whether people stay or go.”
Organizations have been navigating prolonged economic and business uncertainty. While employees don’t expect leaders to know everything about how to steer their business away from challenging times, they do expect them to be transparent in what they’re doing and how it’s going to impact their workforce, Perrault says.
“Clear, honest communication, even if the answer is ‘we don’t know yet,’ does more to build trust than a polished company line,” she explains. “Ultimately, presence matters more than perfection and above all, being human matters most.”
When leaders are empathetic and willing to listen or admit uncertainty, it reminds their employees that they’re not just part of a workforce but that they’re also part of a valued community, Perrault adds.
Psychological safety is often mislabeled at soft or nebulous, but the data says otherwise, Perrault explains. Organizations with strong, safety-focused cultures see up to 76% higher engagement, 27% lower turnover, and measurable performance gains. As important as these short-term positives are, the real story is in the future impact a strong sense of psychological safety can have.
“When leaders create cultures where people feel safe, they’re not only sustaining immediate engagement, but they are also fostering conditions for long-term growth, adaptability, and resilience,” Perrault says. “The best leaders balance the building blocks of psychological safety, empathy, and accountability to enable individuals to thrive while strengthening the organization to be better prepared for whatever comes next.”
