Happiness at work is no longer seen as a nice to have. It has now entered the boardroom. It’s simple: data show that workplace stress has a negative impact on performance, retention and innovation.
We’ve collected insights on happy workplaces from more than a million workers in over 100,000 organisations worldwide. The evidence is clear: happier workplaces are not just better places to be, but they’re also better for business.
In this article I will examine the data and my 40 years’ experience in business, including my tenure as Waitrose’s Managing Director, to see what it tells us about stress at work.
Employees who are happy and loyal will be loyal to their employer
Let’s start with a simple fact: people perform their best when they are happy. Employees who are undervalued or stressed will have a lower level of productivity, and their flight risk will increase. This can also lead to a higher staff turnover. Our data shows that organisations with high employee engagement scores get up to 36% extra discretionary effort out of their employees. These little extra bits and pieces of energy and care are what drive innovation and exceptional service.
Employees who are happy will also be more likely to remain. According to our studies, dissatisfaction with the workplace is the leading predictor of employee turnover. Any leader who is forward-looking knows that in an environment of rising recruitment and onboarding expenses, preventing employee turnover has become their top priority.
Stress at work is a major enemy to productivity and satisfaction
Burnout, disengagement and mental health issues are all caused by chronic stress. Our data show that almost 40% of employees are at risk for a poor wellbeing. What is causing this stress?
The main contributors are lack of clarity, excessive work loads, poor communication and lack of leadership support.
Here’s the good thing: Organisations that address these issues actively – by improving work-life balance, offering assistance, and encouraging breaks — see a significant reduction in stress levels at the workplace and a corresponding increase in happiness.
Happiness is not a soft measure
It is a common misconception that workplace satisfaction is a non-measurable. In fact, it’s a major driver of tangible results. Employees who are happy will be more loyal to their customers. They are more innovative, more collaborative, and more resilient in difficult times.
This link is highlighted in our Global Workplace Report, 2024 . The companies that scored highest in employee satisfaction also reported higher Net Promoter Scores (NPS), fewer sick days and better commercial performance.
Organizations should also be aware that employees gravitate towards companies that have cultures that promote wellbeing. Businesses must differentiate themselves not only on the basis of salary but also on the basis of culture. Happiness is no longer a luxury in the new workplace, but a competitive advantage.
Access 15 questions to measure employee happiness and wellbeing
What can businesses do to make their employees happier?
Measurement is the first step. It is impossible to improve something that cannot be measured. The first step is to conduct regular engagement surveys that are tailored, anonymous and have a clear action plan. Then, the leaders need to commit to making changes based on their findings.
It is important to invest in the development of leaders. It is important for companies to train their managers in more than just processes, but also in how to deal with people. Anyone leading a team should have core competencies in empathy, communication and emotional intelligence.
Finally, wellness must be a part of the culture. It’s more than just lunchtime yoga and wellness apps. This is about creating an environment where people can feel supported and motivated to perform their best work. My philosophy of the Six Steps to Happiness at Work – a framework to assist employers and employees in focusing on happiness at work – is central to this.
Reward and Recognition
Everyone in an organization should be able to benefit from the success of that organisation. It is important to pay a fair salary. No amount of praise will compensate for an underpayment. Your compensation plan should be fair and encourage employees to do more.
Information Sharing
Refusing to share information can cause employees to feel unappreciated and disconnected from their business. Transparency is key to a team’s success. All employees should be able to understand the company, its strategy, results, customers and competitors.
Empowerment
Empowering employees involves involving them in the decision-making process, valuing and integrating feedback from their perspective into company strategies. Only by taking into account all perspectives and experiences can a team reach the best outcome. Although individuals may not be flawless, a team can be.
Wellbeing
Employee well-being encompasses mental, physical and financial health. Addressing these three areas will improve engagement and productivity. Positive workplace cultures can reduce absenteeism because engaged employees are healthier and more committed.
Instilling pride
Employees who are proud of their workplace and work will naturally become advocates. They will share their positive experiences with their colleagues, future hires, clients, and the local community. When they talk about their workplace, you can see how proud they are.
It’s not just about motivational speeches or performance evaluations, but cultivating an atmosphere where employees enjoy their jobs and feel proud of them.
Job satisfaction
Job satisfaction is influenced by a variety of factors, but two are particularly important: the opportunity for personal development and the quality employee-manager relationships.
Employees are the greatest asset of any organisation, and a high level of engagement is crucial for success. According to research, respect and trust between leaders and employees are the key factors that drive employee satisfaction. Employees often leave because of poor relationships with their managers, regardless of how strong the brand is.
Happy Economics
Happy workplaces are more productive. Organisations can improve employee satisfaction and reduce stress at work by using data-driven insights. Happy Economics is what I call it.
