'Both men and women are likely to respond to feeling like they don't have control with abusive supervision': researcher explains link between financial stress and abusive leaders
Financial insecurity doesn't just impact employees' personal lives — it also has significant consequences for workplace dynamics, particularly for those in leadership positions.
According to new research from the University of Colorado, leaders are particularly susceptible to allowing their financial stress to manifest as abusive behaviour.
“At least in the United States, many managers make below a living wage, they aren’t necessarily covered by overtime rules that would help them increase their wage, and you can decouple income from financial stress – even at high levels of income, you can still experience a lot of financial stress,” says study co-author Keaton Fletcher, assistant professor of psychology at Colorado State University.
“What makes leaders unique is that they have the people working underneath them, so they have this position of power. They've got levers of power that they can pull on, and maybe potentially fewer checks on their behaviour. And so they're of greater consequence, potentially.”
How gender influences leadership responses to stress
The study reports that nearly 60% of employees across all income levels reported moderate to high levels of financial stress. Research consistently shows a connection between financial stress and abusive supervision, Fletcher explains, which can be attributed to a loss of control.
“They feel like they have less control over their lives, and then that loss of control manifests as abusive supervision.”
What’s interesting is that link, from loss of control to abusive supervision, is stronger for men, he says.
“So, both men and women are likely to respond to feeling like they don’t have control with abusive supervision, but men are much more sensitive to it.”
The reasons behind these gendered differences are not entirely clear, though theories abound. Fletcher notes.
“It might be the case that these men are responding to this loss of control with abuse to reassert masculinity or whatever, but it’s still causing them harm. It might stymie their professional development; it might cost them sleep that night.”
Fletcher points out that women and men both participate in leadership abuse in equal amounts, but while this study sheds light on what factors can predict the behaviour in men (financial stress), the same can not be said for women, meaning the causes for women leaders who are abusive remains a mystery.
Financial stress can also foster empathic leadership
Conversely, some leaders develop positive coping techniques in response to financial stress, by making attempts at building stronger interpersonal connections with their teams. This behaviour, known as empathic leadership, emerges equally among men and women.
“They have this drive of trying to solidify their social relationships, and in that respect, it also increases their empathy as leaders,” he says, “so they engage in more empathic leadership. But there’s no gender differences there.”
Empathic leadership involves actively acknowledging and responding to employees’ emotional needs; Fletcher describes it as “making efforts to understand the emotional experiences of followers, so asking about what they’re feeling, showing, demonstrating that you understand their emotions and potentially also taking on their emotional experience.”
This dual response to stress — abuse in some instances, empathy in others — suggests that employers have opportunities to shape leadership behaviour through targeted interventions, says Fletcher.
Practical recommendations for HR
Addressing the underlying causes of financial stress is essential to mitigating its harmful workplace effects. As Fletcher points out, financial stress isn’t limited to employees at lower income levels.
“Certainly, there’s a relationship between income and financial stress, where the lower you are in income, the more likely you are to be stressed. But it’s not perfect. You see financial stress even at upper levels of income,” he says.
“Part of it is because it is the outcome of that equation, not only how much you make, but also how much you have to spend. So… one way to address this is reducing living expenses for your workers.”
For example, offering subsidies for childcare can alleviate financial pressure and provide leaders with a greater sense of stability, Fletcher says. Another critical approach is offering financial literacy resources such as classes and training sessions.
“Financial training resources, which are becoming increasingly common, benefits that organizations are offering, like financial wellness classes, that can be helpful.”
Fostering a workplace culture that genuinely discourages abusive supervision is vital. This means ensuring that anti-harassment policies are not just statements on paper but are actively enforced, even when dealing with high-performing employees.
“There are a lot of companies that say, ‘We don’t tolerate harassment,’ but absolutely do, and so making sure that you sort of put your money where your mouth is, even for your star performers.”
