Why Employee Listening Can Be Your Company's Next Competitive Advantage

High turnover. Eroding trust. Employee fatigue.

People-centered organizations know these problems all too well because they ask. They run annual engagement surveys, onboarding questionnaires, and exit interviews. They have listening channels in place.

So why do these issues persist?

Despite the appearance of responsiveness, most organizations fall short where it matters most: acting on what they hear.

According to Gallup, only 8% of employees strongly agree that their employer acts on the feedback they provide. That stat should stop any HR or Talent leader in their tracks. What’s the point of asking if nothing changes? Employee listening isn’t a feel-good initiative. It’s a strategic lever. Done well, it reveals insight, builds trust, and drives performance. Done poorly, it breeds cynicism and even accelerates attrition.

So, what exactly is employee listening? It’s not a one-time survey or a data collection exercise. It’s a deliberate, ongoing practice to understand what matters to employees and to act on it. When embraced as a core business discipline, not just an HR function, it becomes a powerful driver of trust and performance.

What Employee Listening Really Means

Employee listening isn’t about collecting responses. Rather, it’s about enabling insight, trust, and action.

Effective listening surfaces risks early, reveals opportunities for improvement, and helps organizations stay connected to the emerging needs of their workforce. The most successful companies don’t just gather feedback; they use it to drive better decisions and meaningful change.

And at the center of it all? Committed, visible leadership. When leaders respond with clarity, consistency, and urgency, listening becomes more than a process, it becomes a competitive advantage.

Why Employee Listening Isn’t Optional

Employee listening is good for business. When embedded into the operations of the organization, it can drive measurable value:

• Higher Staff Engagement and Profitability: Teams in the top quartile of employee engagement see 23% higher profitability, per Gallup.
• Lower Turnover: Employees who feel heard are 4.6x more likely to perform at their best and to stay, according to a Salesforce study).
• Increased Innovation: Frontline employees often see problems and opportunities before anyone else. Their voice is your competitive insight.
• Better Customer Experience: Engaged employees deliver better service. It’s that simple.

And yet, organizations still treat employee listening as a periodic obligation or project rather than a regular practice or process. When listening becomes an act of going through the motions rather than a genuine interest, trust erodes.

The difference between organizations that see impact from listening and those that don’t often comes down to one thing: Leaders do something with the employee feedback they receive.

Leadership: The Trust Multiplier

Leaders should be driving employee listening initiatives, not content passengers in a vehicle someone else is controlling. When leaders visibly support listening efforts, close the loop on workplace feedback, and model responsiveness, employee trust grows.

When they don’t, employees go quiet—sometimes indefinitely.

Here are some recent statistics worth reviewing:

• Only 23% of U.S. employees say they firmly trust their organization's leadership (Gallup).
• Leaders who are rated highly on listening are 21x more likely to be trusted by their teams (HBR).
• In Explorance's Voice of the Employee (VoE) analysis, we found a 13-point gap between employees who said leaders “listen” and those who said leaders “explain what they did with the feedback.” That gap = lost credibility.

Why does this happen?

In many organizations, leaders believe they are listening because they launch the surveys. But what employees want is something different, and that is to see that their input and voice make a difference. They want to see that their voice results in change, in transformation.

In our experience, organizations with some form of listening get hyper-focused on response rates. They will remind, cajole, offer incentives, and remind again: “Don’t forget to fill out our engagement survey.” “Your voice matters!” they say. Leaders of these firms view response rates as a measure of engagement or how much employees care by taking the time to complete a survey.

We agree that leadership is essential at the launch. Leaders must be visible and communicate the importance of listening to employees in an organization. We also agree that high response rates matter. High response rates ensure the feedback is representative, reliable, and actionable, and that the data gives leaders a clearer picture of what’s working, what’s not, and where to focus improvement efforts.

But, while a well-orchestrated launch and high response rates are important, they are not sufficient. What’s essential is closing the loop after the launch. It is after the launch that leaders demonstrate that they are committed not only to getting feedback but also to acting on it.

How Leaders Build Trust Through Employee Listening

With leaders critical to the success of employee listening, several behaviors make listening credible.

1. Demonstrate Authentic Listening

Employees know when listening is merely a check-the-box activity. Real listening requires creating space for feedback, even the uncomfortable kind. It means asking open-ended questions, thanking employees for honesty, and not becoming defensive.

When you are in “listen mode,” consider body language, tone, and setting. If the environment feels rushed or transactional, people will withhold. A calm, curious, and attentive presence builds safety. If the leader takes notes, circles back, or references a prior comment later, that behavior communicates “I heard you” more than any survey report ever could. Authentic listening is about how people feel in their presence, respected, valued, and taken seriously.

2. Close the Loop, Fast!

Too many organizations gather feedback and then go silent for weeks (or months). Speed matters. Even if you don’t have a complete picture, communicate early and often:

“Here’s what we heard. Here’s where we will start. Here’s what comes next.”

When employees see even one slight change linked to their feedback, trust grows. When they hear nothing, they assume you are doing nothing.

A quick follow-up message within a week can make all the difference. It doesn’t need to be elaborate, just timely. Consider a short email summary, a team huddle recap, or even a Slack message with bullet points. The goal is momentum, not perfection.

Report the top-level themes (what’s working well, key opportunity areas), response rates, and tentative timeline as quickly as possible. A client once said, “Don’t be afraid to show your hand.” The HR team drafted and sent an organization-wide email, and then a follow-up that directed by managers, so employees have a safe space to ask questions.

3. Involve Employees in Shaping Action

Involving employees in deciding what to address, or how to address it, builds ownership and often leads to more practical, grounded solutions. View the action planning phase as a co-creating process by giving employees opportunities to influence priorities and timelines.

Use focus groups to shape follow-up plans or design teams for specific issues (e.g., onboarding, hybrid work). Delegate presentation of results to team members. The more engaged they are in action planning, the more they will participate and help accelerate progress.

Ask employees for their ideas or suggestions at the same time as you ask for feedback. With today’s sentiment analysis tools, like MLY, employee actions can be identified in a matter of minutes.

Listening shouldn’t end with the survey. When employees shape what happens next, they move from passive participants to co-creators.

Consider participatory design workshops. A customer created a series of workshops where each session focused on a different stage of shaping action. The first group brainstormed potential actions. The next group validated those actions and prioritized them. The final group did the final vetting and detailed project planning. This allows employees to get involved while also maximizing their impact as they built upon each other’s work.

4. Communicate Progress Relentlessly

You made a change. Great. But if no one knows, it didn’t happen. Employees are busy and skeptical. Don’t assume they know what you are doing behind closed doors. Use dashboards, town halls, team meetings, and email updates to show how feedback influenced action.

Some organizations use a “You Spoke, We Listened” format to summarize changes each quarter. Others give department heads templates to report progress at the team level.

Repetition matters. You might feel like you’re overcommunicating, but you’re probably just starting to break through.

A customer established a cross-functional committee within the organization tasked with action planning following each year’s engagement survey. They were mandated to implement new ideas, communicate the “why,” and report on what was working (or not) from past initiatives. These efforts helped ensure +90% response rates every year, as employees know their time providing honest feedback each year is worth their time.

5. Lead by Example

The most credible listening cultures start at the top. When executives show up at employee listening sessions, share their own insights, and follow through on public commitments, it signals that their views matter.

This behavior cascades. When senior leaders model transparency and responsiveness, managers are more likely to do the same. And when managers listen well, teams thrive.

Each year, a customer holds an in-person all-hands meeting where senior leadership presents results from various employee engagement surveys. They share their perspective, as well as a timeline and their plans based on what they heard. According to Amanda King, VP HR at SourceAmerica, "We report regularly to our board, engage our leaders in the review of the data, support our managers in interpreting results, and ensure that every frontline employee hears what we’re learning—and what we plan to do about it."

Are You Really Listening to Your Employees?

Most leaders want to believe they’re good listeners. But employees don’t judge us by our intentions; they judge us by our actions.

Ask yourself:

• Do our employees know what we have done with their feedback?
• Are we following up within weeks, or waiting months?
• Can our managers lead conversations about team results?
• Are our surveys surfacing genuine issues, or just measuring sentiment?

If your employees don’t know what actions have resulted from their feedback, or it takes months to follow up, or managers are avoiding the team discussion, then it’s time for a reset.

Employee listening is your next competitive advantage. Not because it’s trendy. Because it builds trust. And trusted teams move faster, stay longer, and solve more complex problems together.

If you want to know where your organization stands, we’ve created a quick, practical tool to help.

Take the Voice of the Employee (VoE) Capability Assessment to benchmark your organization’s listening capability and get tailored, practical suggestions to improve your listening practices. You will receive immediate access to your results, and your responses will be aggregated in our report. All responses are anonymous.

You can’t fix what you don’t understand. But once you do, you can build something that lasts.