What is People-Centric Leadership, and Why is it Vital for Success?

People-centric leadership means taking an empathetic, compassionate approach to managing team members. People-centric leaders are invested in their employees, both in their professional success, and in their overall well-being.

Satisfying customers and maximizing profits will always be two top priorities for any organization. But putting your people first through people-centric leadership makes it easier to achieve both of those goals.

In addition to driving profits and increasing customer satisfaction, people-centric leadership can yield other benefits for your team members and organization, including improved communication between departments or customers; increased productivity, engagement, and organizational growth; and decreased employee turnover and absenteeism. 

Human-centric workplaces also support better employee mental health and wellness, boosting morale and limiting burnout. 

“In our world, the customers are the employees. That level of investment should match or mirror the customer demand signal. Most of our companies are people businesses and rely on human capital to move the ball forward.”

 

-L. David Kingsley, Chief People Officer, Intercom

Discover how people-centric leadership empowers organizations to reap these benefits and actionable tips you can implement to build a people-centric workplace culture.

Why is people-centric leadership important for an organization?

Workplaces are becoming more people-centric in response to changing employee demands. According to a report by LinkedIn, some of the things employees want most include clear communication and empathy, in addition to pay transparency and mental health benefits—all of which are hallmarks of a people-centered workplace. 

Meanwhile, research from Deloitte shows that Millennial and Gen Z workers place significant importance on purpose-driven work. As a result, it suggests: “Organizations may redesign their compensation packages to offer benefits (e.g., flexible work schedules, fitness programs, access to mental wellness support) that meet the reported demands of more recent workforce generations.”

These types of benefits aren’t just good for individual employees—they’re also good for the companies that offer them, something leading brands like Lattice have already recognized and begun to leverage. 

According to CEO and Co-Founder Jack Altman, who discussed the topic of people-centricity as part of a panel during WorkRamp LEARN, “A people-centric culture stems from the belief that what you need to optimize for, as a company leader, is the success of people.” 

He continued, “[H]aving a culture that…optimizes for an individual’s growth, their sense of purpose, their learning, [and] their sense of community… [will] lead to the greatest overall company we can have.”

Watch the full panel featuring Gainsight CEO Nick Mehta and Gong President and COO Kelly Wright.

What are the benefits of people-centric leadership?

With Millennials now comprising the majority of the labor market and Gen Z coming up behind them, the demand for people-centered workplaces isn’t going away any time soon. Businesses that fail to evolve are doomed to lose some of their most valuable employees and their competitive edge.

However, there are other reasons managers should proactively create a more people-centric culture. Beyond simply meeting the demands of a changing workforce, people-centricity also provides numerous benefits for your business.

Here are a few examples to consider. 

1. 1. Boosted productivity and revenue. To increase productivity and revenue, start by increasing employee satisfaction. Research by IBM shows that companies who rank highly on employee experience metrics—specifically, in the top 25 percent—also achieve significantly better sales outcomes, getting double the return compared to companies with lower employee experience scores—engagement and revenue increase when employees feel valued and confident in their skills. 
   2. Increased levels of customer satisfaction. People-centricity boosts employee satisfaction—and, as data shows, satisfied employees are more likely to create happy customers. That’s because employees who feel valued and are highly engaged are more likely to go above and beyond in their role, from being more proactive about getting tasks done to communicating more frequently and effectively with their clients, supervisors, and peers. 
   3. Increased retention and decreased turnover. Employee turnover causes enormous—and, in many instances, ultimately avoidable—financial losses. Employees are less likely to leave organizations that meet their needs, which means people-centricity saves your company money by limiting turnover and improving retention. Learn more about the costs of high turnover—and 15 strategies you can use to prevent it. 
   4. Easier, more efficient hiring and recruiting. While upskilling and reskilling are often effective strategies, there may also be times when you want to look to external sources for talent. It will be easier, faster, and ultimately, less costly for your organization to attract and recruit qualified candidates if you can offer a people-centric company culture that aligns with the wants and needs of the modern workforce.  

6 Ways to improve workplace culture through people-centric leadership

Mike Ettling, writing for Forbes, says, “While every business has its unique recipe for a solid culture, people-centricity should always be the secret sauce.” 

Considering the numerous benefits of people-centricity that we explored in the previous section, it’s easy to agree. So how can managers create a people-centric work environment, whether on-site or remotely via online tools?  

One suggestion Ettling makes is to “foster a culture where employees truly feel valued,” such as involving workers in more decisions.

Here are six more actionable tips for creating a workplace culture that puts people at its heart. 

1. Offer training and professional development opportunities. Providing your employees with opportunities for learning, such as upskilling or reskilling programs, is like investing in your company’s future. Not only can well-designed L&D programs boost employee engagement and job satisfaction, but they also help organizations close costly skill and performance gaps, resulting in more agile, innovative, and competitive companies. 
2. Be transparent. You might recall that, according to LinkedIn, transparency was one of the leading workplace issues in 2023. “The most important part of the transparency that is valuable to people,” says Jack, “is transparency on the concepts and the reasons behind what the company is doing. We try really hard to share that and make transparency front and center.” 
3. Communicate clearly and frequently. Unclear or delayed communication can lead to misunderstandings, diminished trust, and even financial losses. Gainsight CEO Nick Mehta encourages communication on his team by sending a weekly email that provides an overview of the company’s projects and priorities. 
4. Provide support and resources for mental health and wellness. Data shows that millions of Americans struggle with depression or anxiety while countless others are coping with issues like burnout, grief, stress, exhaustion, or insomnia. Data also shows that 82 percent of Gen-Z workers want employers to provide mental health days—and that, according to CNBC, half of Millennials and 75 percent of Gen-Zers have left jobs for mental health reasons. Learn more about the impacts of mental health in the workplace and how to create a more positive employee experience. 
5. Conduct regular employee surveys. One of the best ways to develop a genuinely people-centric program is to seek honest, detailed participant feedback. Regardless of what types of programs or initiatives you provide, conducting periodic employee engagement surveys and making program adjustments based on the feedback you receive is a good idea.
6. Inspire your people with a sense of purpose. To build a people-centric workplace, managers and executives must look beyond the bottom line and create a sense of meaning and purpose for team members. During the WorkRamp LEARN CXO panel, Gong COO and President Kelly Wright shared some actionable tips for hiring and developing leaders who can inspire, like interviewing for behavior—not just experience. Jack also shared a few suggestions, like spending at least 15 hours with a candidate before making a job offer. 

People-centricity is more than just a trend, a buzzword, or a way to appeal to Millennial and Gen Z workers—it’s what happens when values like empathy, transparency, and mental health awareness intersect, creating a new kind of workplace where employees feel supported, inspired, and motivated to perform.

It’s also an effective strategy for accomplishing various organizational goals—especially when your business leverages an employee training and development platform to reach its targets.

How WorkRamp can help you put people first

Boost productivity, accelerate growth, and sharpen your competitive edge by championing programs and creating a culture that elevates employees. Elevate employee learning, development, and training with the Employee Learning Cloud. 

The Employee Learning Cloud offers centralized employee learning and a people-centric user experience. Learn more about how the Learning Cloud can help you empower your team and help your organization thrive. Contact us for a free, personalized demo.