CEOs downplay staff discontent, leaving HR to manage the fallout

The result, they said, is that they are forced into “impossible situations” where they must contradict their own people‑first messaging to satisfy demands from those “not involved in the day‑to‑day.”

Such pressures make it easy for engagement to slip down the priority list, especially when CEOs are juggling more visible external threats such as economic uncertainty, AI disruption, and geopolitical risk.  

Dave Ulrich, professor at the University of Michigan and an expert on HR matters, argues that this context is exactly why HR leaders have to frame “people risk” differently.

“Start the dialogue about employee morale by NOT talking about employees, but what matters most to CEOs,” he told HRD, as he cited market value, customer revenue, and customer attitudes.

In his work, Ulrich has found that employee sentiment is a powerful lead indicator of customer sentiment, with strong correlations between the two. When morale erodes, customer experience and ultimately market valuation tend to follow.