Companies are suffering a ‘psychic energy deficit’

A sleeping orange and white cat.

Companies are suffering a ‘psychic energy deficit’

Written by

Andrew Smith
 

09/05/2025

Companies are suffering from a slump in discretionary energy: energy that workers freely gave at work. These are the moments of ideation, fun, innovation, insight, vigour and enthusiasm that once happened almost exclusively in offices but now happen much less. The fluid ways of working ushered in by digital tech – and dramatically accelerated by the COVID pandemic – means that companies now need to work harder to receive, create and benefit from this energy.

A change in the natural order

Previously, organisations were the natural beneficiaries of this psychic discretionary energy spend, simply because workers were always together in the office. It was not that organisations were darkly harvesting this energy, but more that it merely fell to them. The office was where we all worked.

Today, a certain type of worker* is spending less of this discretionary energy at or on work. They are at home more, working remotely, fractionally, making plans for other parts of their lives, working in offices at the end of the garden. Instead of 10 hours commuting a week, they are watching The Affair, which they missed the first time around. They are playing with the cat. They’re pruning shrubs and putting the laundry out.

The kicker for companies is that they can’t get this energy back simply by demanding that people return to the office. The reasons for this are many, and include:

 

  • Top talent will leave for more flexible roles
  • The tools for remote work are excellent and advancing rapidly
  • Everybody knows that things have changed

 

Digging into the last one a bit: at all levels, from call centre operatives to CEOs, people know that non-office-based ways of working are possible, sustainable and productive. And they afford employees a work/life balance that was once the stuff of dreams. The possibilities for work transformation grow daily as governments, regulators and societies (not just companies) try to keep up. A return to full-time office work in this context becomes a kind of charade. This, I think, is the killer.

More elephants

Continuing with the theme of calling out elephants in rooms from my last article in this series, here are a few more elephants related to the psychic energy deficit.

 

  • How do you reward reluctant office presence?
  •  If we are together less often, how do we ensure that in-person interactions are of high quality?
  • Are some leaders lamenting the demise of full office work because it’s the demise of the world in which they ascended?
  • How can middle management become more successful in getting workers to spend discretionary energy at work?

 

Filling the energy gap

Managers and leaders need to become better at coaxing, encouraging, charming, inspiring and generally motivating their charges to spend more of this discretionary energy on work. Simply telling people to spend it won’t work. A talented person can complete all the tasks expected of them without diving deeply into their psychic energy reserves.

And supervisors will certainly need to learn new skills to do this – and perhaps will require some encouragement themselves. Gallup’s recent State of the Workforce report points to a drop in employee engagement, but also a drop in wellbeing for managers. Perhaps they are struggling because they are attempting to apply legacy management methods to the new world.

Many models

There will be – and already are – companies that embrace remote work as part of their model versus those that demand full office hours. (And let’s not forget, there are those who love and want full office work). Culturally, these are very different places – and might become even more different from each other in the future – appealing to different people and people at different stages of their working lives.

It’s also true that many people are waiting to be led. Those with ambition watch for what companies want, then fit in with those requirements. However, an organisation full of only super-ambitious people won’t work too well. You still need a cohort of challengers and creative catalysts to get things going, keep things running and help others adapt when they need to.

The Gina, Frank and Ellie problem

The typical college-educated office worker in the UK is out of the office 1.6 days a week, says Stanford University. If Gina, Frank and Ellie are your best creative sparks, and each is away from the office for this amount of time each week, being all together might become a rarity.

That’s a big change. It needs a new approach to culture, management, content, internal comms, project comms, reward, leadership, employee engagement and much, much more.

In HR circles, the theme of this piece would be categorised as ‘a view on employee engagement’, but let’s start having the conversation more widely. The ‘discretionary psychic energy crisis’ might sound like a dramatic way of putting it, but companies that manage to bridge the gap will be putting themselves at a significant advantage.

* College-educated, working in knowledge industries. Not all workers live in this world. Read Charlie Colenutt’s excellent book Is This Working? for insights into the working lives of policemen, nurses, carers, bakers, teachers and more.

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