No longer viewed as a nice-to-have, workplace happiness has entered the boardroom. The reason is simple; the data shows that workplace stress negatively impacts performance, retention, innovation, and profitability.
At WorkL, we’ve collected insights from over a million employees across more than 100,000 organisations globally, and the evidence is clear: happy workplaces aren’t just better places to work, they’re better businesses.
In this article, I’ll examine what the data tells us about the impact of stress on workplace satisfaction, using my 40 years of business experience, including my time as Managing Director at Waitrose.
Happy workers are loyal workers
Let’s begin with a simple truth; people do their best work when they feel happy. When employees are stressed, undervalued, or disengaged, their productivity declines, flight risk increases, and so does staff turnover. According to our data, organisations with high employee satisfaction scores see up to 36% more discretionary effort from their people, those little extra bits of energy and care that drive innovation and exceptional customer service.
Happy employees are also more likely to stay. Our studies reveal that dissatisfaction is the single largest predictor of employee churn. In an environment where recruitment and onboarding costs are rising, preventing turnover has become a priority for any forward-thinking leader.
Workplace stress is the enemy of productivity and satisfaction
Chronic stress leads to burnout, disengagement, and mental health challenges. Alarmingly, our data shows that nearly 40% of employees report a wellbeing risk. But what is driving this stress?
Lack of clarity, excessive workloads, poor communication, and lack of support from leadership are key contributors.
But here’s the good news: organisations that actively address these issues – by improving workload balance, offering support, and encouraging breaks – see a significant drop in workplace stress levels and a corresponding rise in happiness.
Happiness is NOT a soft metric
A common misconception is that workplace happiness is a soft metric. It’s actually a key driver of hard results. Happy employees are more loyal customers’ advocates. They innovate more, collaborate more effectively, and show greater resilience during challenging times.
Our Global Workplace Report 2024 highlights this link. Companies scoring highest on employee happiness also reported higher net promoter scores (NPS), lower sick days, and better commercial performance.
Organisations must also remember that employees are gravitating toward companies with cultures that value wellbeing. The great resignation and the rise of remote and hybrid work have made it important for businesses to differentiate not just on salary, but on culture. In this new world of work, happiness is not a luxury, it’s a competitive edge.
Access the 15 questions you need to ask to assess employee wellbeing and happiness
What can companies do to create a happier workforce?
It begins with measurement. What isn’t measured can’t be improved. Regular engagement surveys, tailored, anonymous, and actionable, are the starting point. From there, leaders must commit to change based on what they learn.
Investing in leadership development is also critical. Companies need to train managers not just in process but in people. Empathy, communication, and emotional intelligence should be core competencies for anyone leading teams.
And finally, wellbeing must be embedded in the culture. This means more than lunchtime yoga or wellness apps. It’s about creating a sustainable environment where people feel safe, supported, and motivated to do their best work. Central to this is my philosophy on the Six Steps to Workplace Happiness – a framework to help employers and employees focus on happiness at work:
Reward and recognition
Every member of an organisation should benefit from its success. A fair salary is essential – no amount of praise can compensate for underpayment. Your compensation structure should meet expectations and motivate employees to go above and beyond.
Information sharing
Withholding information can make employees feel undervalued and disconnected from the business. For a team to perform at its best, transparency is essential. Employees at all levels should have a clear understanding of the business, its strategy, performance, customers, and competitors.
Empowerment
Empowering employees means involving them in decision-making, valuing their ideas, and integrating their feedback into the company’s strategies. Everyone brings unique experiences and perspectives to the table, and only by considering all views can a team achieve the best possible outcome. While individuals may not be perfect, together, the team can be.
Wellbeing
Employee wellbeing encompasses physical, emotional, and financial health. Addressing all three areas leads to improved engagement and productivity. A positive workplace culture can reduce absenteeism, as engaged employees tend to be healthier and more committed.
Instilling pride
Employees who take pride in their work and workplace naturally become advocates, sharing their positive experiences with colleagues, potential hires, customers, and the community. Their pride will be evident when they talk about where they work.
Building this sense of pride goes beyond motivational talks or performance reviews – it’s about cultivating an environment where employees truly enjoy and take pride in their roles.
Job satisfaction
A range of factors influence job satisfaction, but two stand out: opportunities for personal growth and the quality of the employee-manager relationship.
Employees are an organisation’s greatest asset, and high engagement is essential for success. Research shows that respectful treatment and trust between employees and leadership are key drivers of satisfaction. Poor relationships with managers are often the top reason employees leave, regardless of the company’s brand strength.
Happy Economics
The data is unequivocal, happy workplaces perform better. With data-driven insights and a commitment to employee wellbeing, organisations can reduce workplace stress, improve satisfaction, and drive real business outcomes. It’s what I call, Happy Economics.
