Whether we like it or not, most of us spend a ridiculous amount of our lives working. With all that time and energy invested, it only makes sense that we want our work to feel meaningful and fulfilling, not soul-crushing and miserable. Life is just too short to spend it dreading every Monday morning or counting down the minutes until we can finally log off for the day.
The good news? The latest research shows that creating a positive work experience isn’t just a feel-good move – it’s a strategic one. And prioritizing employee happiness isn’t just a nice-to-have – it’s actually a major competitive advantage for businesses. What has always been obvious to us, the workers, may finally be important to business leaders. So let’s spread this data far and wide.
In a recent episode of The Happiness Lab podcast, Yale professor Dr. Laurie Santos dove into the compelling evidence linking employee happiness to business success. “If you look at what the science suggests what the biggest priority should be in the workplace of tomorrow, how we want to think about the workplace of the future, I think science gives us a clear answer, and it’s not that we need to focus on technologies or some new kind of industry movement. The thing we need to focus on is happiness,” Santos argued.
Indeed’s 2023 Work Wellbeing Report, based on a survey of over 4,000 US adults, backs this up. The report found that only 29% of workers are currently thriving with high wellbeing at work, while the remaining 71% are not reaching their full potential – a statistic that comes with a significant cost to employers in terms of lost productivity and innovation. Moreover, employees with high wellbeing are far more likely to stay with their company (89%) compared to those with low wellbeing (55%), indicating that a failure to prioritize wellbeing can lead to higher turnover rates.
The financial benefits of having happy employees are mind-blowing. A study by researchers at the University of Oxford and Indeed found that companies with higher levels of employee wellbeing outperformed the US stock market and had higher valuations, return on assets, and profits. As Santos put it, “What the research is showing is that happier companies make more money. If your employees are happy, that might be a critical factor. And whether your startup is going to succeed, or whether your company gets out of the economic slump that we’re all in right now, these things matter.”
Aside from the financial gains, the study also found that when employees are happy, they’re nearly twice as likely to work more effectively, energetically, and creatively compared to their unhappy counterparts. This boost in productivity and innovation can give companies a serious leg up in their respective markets. “Just being in a good mood winds up, allowing us to think a little bit more creatively,” Santos explained, citing a study where doctors in a positive mood came up with more innovative solutions to challenging medical diagnoses.
So, with all this evidence pointing to the importance of employee wellbeing, you’d think companies would be all over it, right? Well, not quite. The Indeed report found that only 23% of companies are considered “mature” in building a culture of wellbeing, while 41% are “falling behind.” This presents a huge opportunity for forward-thinking organizations to stand out from the crowd and attract top talent by creating environments where employees can thrive.
If it isn’t already clear that employers should be focusing on employee wellbeing, there’s also an increased expectation from the incoming younger generations. The Indeed report revealed that 47% of workers say their expectations for wellbeing at work have increased in the past year, with Gen Z and Millennials leading the charge. “I think that over the next five to ten years, smart businesses are going to start paying attention to their employee well being,” Santos predicted. “Hopefully partly out of kind of doing the moral thing for a company, because you want your employees to feel good and succeed, but I think partly out of a fully purely capitalistic move of, ‘how are we going to make the most company, how are we going to make the most money?’ We make the most money by having the happiest workers.”
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So, what can companies do to build a culture of wellbeing? It’s not just about offering free snacks and yoga classes (although those are nice too). To really make a difference, companies need to focus on creating an environment that supports employees’ foundational, social, growth, and connection needs.
At the heart of this connection is trust. As I’ve advocated for over and over – when employees feel heard, valued, and understood by their leaders, they are more likely to trust in the organization’s vision and direction. This trust fosters a sense of belonging and purpose, which in turn drives engagement and motivation. Engaged employees are more committed to their work, more willing to go the extra mile, and more likely to stay with the company long-term. In a world where talent retention is a top priority, creating a culture of trust and belonging through strong employee-leader connections is a powerful competitive advantage.
When leaders take the time to listen to and learn from their employees, they gain access to a goldmine of insights and ideas. Frontline staff often have the most intimate knowledge of day-to-day operations, customer needs, and emerging challenges and opportunities. By tapping into this knowledge, leaders can make more informed decisions, anticipate and address issues before they escalate, and identify areas for innovation and growth. In essence, a well-connected workforce acts as an early warning system and a powerful engine for continuous improvement.
Plus, when employees see their leaders actively engaging with and learning from staff at all levels, it sends a powerful message about the organization’s values and priorities. It demonstrates that every voice matters, that good ideas can come from anywhere, and that the company is committed to creating an inclusive, collaborative culture. This, in turn, inspires employees to bring their whole selves to work, to share their unique perspectives and experiences, and to contribute to the organization’s success in meaningful ways.
Of course, creating these connections is not always easy, particularly for senior leaders who are often pulled in many directions and face numerous demands on their time. But the payoff – in terms of employee engagement, innovation, and ultimately, business success – is well worth the investment. By making employee connectivity a top priority and modeling the behavior they wish to see, leaders can create a virtuous cycle of trust, collaboration, and growth that benefits everyone involved.
In today’s rapidly changing business landscape, the companies that will thrive are those that recognize the power of their people and invest in building strong, authentic connections at every level of the organization. As leaders, it is our responsibility to set the tone, to create the conditions for these connections to flourish, and to never lose sight of the human element at the heart of our success. By doing so, we not only create more fulfilling, engaging workplaces but also unlock the full potential of our organizations to innovate, adapt, and thrive in the face of any challenge.
LaFawn Davis, Indeed’s SVP of ESG, summed it up perfectly: “Work wellbeing is how job seekers and employees feel. And how they feel impacts how your company performs.” Companies that prioritize employee happiness and wellbeing will thrive, while those that fail to adapt will be left in the dust. The business case for happiness has never been stronger – it’s time for leaders to take notice and act. And if you don’t know where to start, well, I’m just a phone call or email away.
[Podcast Source: The Happiness Lab with Dr. Laurie Santos, South by Southwest (SXSW) 2023 Special Episode]
[Report Source: Indeed Work Wellbeing Report 2023, based on a commissioned survey conducted by Forrester Consulting]
