Engagement & happiness at work equals profit - here are all the evidence you need!

This article is part of the open book project “The Book Of Collaboration.” Curious? Join our FB-group to find out more and get engaged. And, to begin with, sorry for my Swenglish.

Big companies are obsessed with efficiency and productivity - isn't it so? They love to use management consultants, re-organize and cutting costs, wishing to find the things that increase the profit. The hard facts. The parts of the machine that are broken or worn out…

But, if they love everything that makes them more profitable, how come the total ignorance of investing in activities, structure, skills, and leadership that is raising employee engagement, motivation and happiness? Is it because these factors are too fluffy? As soft values? Something that the lady at HR keeps nagging about… Maybe top management still think that employee satisfaction is about ping pong tables, fruit-baskets, and higher salaries? What do you think?

Of course, I'm generalizing right now, but overall the latest State of the Global Workplace, by Gallup, shows us that globally only 15 employees are engaged at work. And, 18% are disengaged, which more or less means that they are actively opposing the management.

As Jim Harter at Gallup puts it in this article, most surveys show that employees are looking for purpose, personal and professional development and a manager that provides active coaching and a focus on strength rather than their weaknesses. But all they get is an annual performance review… and a lot of feedback on what they are bad at.

High employee engagement > 21% higher profitability

So, what happens when companies succeed in employee engagement? A lot. When Gallup is comparing the top quartile companies in the survey with the bottom quartile, the results are extraordinary:

  • 10% higher customer metrics
  • 17% higher productivity
  • 20% higher sales
  • 21% higher profitability.

More evidence is coming up…

The co-creators in our book-project crowdsourced even more evidence and tips related to the topic. Here we go!

Shawn Achor, the writer of the book The Happiness Advantage, makes the case that the single greatest advantage in the modern economy is a happy and engaged workforce. He relies on studies that show that happiness is raising sales by 37% and productivity by 31%. Read more in this article by Harvard Busi.

This Forbes article interviews Jessica Pryce-Jones, author of the book Happiness at Work. She highlights that happy employees are 180% more energized, 108% more engaged and 50% more motivated compared with their colleagues.

A Swedish survey by Netsurvey shows that companies with a high engagement rate show 4,7 points out of 5 in the Swedish growth ranking index. The companies who have bored employees scored 1 / 5 in the same ranking. When comparing result margins, the companies with engaged employees have an average of 15,2%, while the ones with unfocused employees showed only 6,6%.

So - how to do it?

Rosabeth Moss Kanter researched highly innovative companies in her book Evolve! She saw a pattern of three Ms: Mastery, Meaning, and Membership. Daniel Pink talks about Autonomy, Purpose, and Mastery as motivation drivers in his book Drive: The Surprising Truth About What Motivates Us.

The Self Determination Theory talk about Autonomy, Competence, and Relatedness. And this article by Harvard Business Review highlights Meaning and Purpose, Hope and Friendship as key factors for employees to become more happy at work. Do you start to see a pattern?

Great Place To Work and Forbes are focusing on the need for high trust cultures - which drives both employee satisfaction, engagement, and profit. Their checklist consists of this seven steps:

  1. Define your company's purpose and connect people to it.
  2. Trust and empower employees to do their job.
  3. Give employees a voice.
  4. Showcase the customer.
  5. Make your workplace a community.
  6. Recognize employees' contributions.
  7. Make "giving back" part of your brand.

Leadership and self-leadership

There is, of course, a clear connection between high employee engagement and good leadership. For example, this study by Willis Towers Watson shows that 79% of highly engaged employees have trust and confidence in their leaders.

So, leaders within the company need to develop their skills. A lot of research shows that “simple” things, like managers seeing their employees and acknowledging their results, make a huge difference. Employees who report feeling valued by their employer are 60% more likely to report they are motivated to do their very best for their employer, according to a survey by American Psychology Association Harrison Interactive.

But, let's not put all the responsibility on the company and the managers. We as individuals also need to become more proactive in leading our self towards more engagement and happiness. For example, according to Self Determination Theory, which is a theory of motivation, people who know their values show a higher engagement level at work. As you see in the below graph, it is affecting the engagement level more than knowing the values of the company. In this presentation by Self Leadersyou find more interesting facts on the topic.

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What will the future bring?

Will 2018 be the year we remember, when we started to see an even higher organizational focus on things that matter? Will we question old systems, mindsets, values, and habits? My hopes are high, and I will personally take both small and big steps.

What will you do? Please add your thoughts, perspectives and references.

Last but not least

Many thanx to Klara Kviberg, Emma Egnell, Niklas Delmar, Klas Orsvärn, Sveinung Skaalnäs, Jesper Ek, Johan Book, Åsa Silfverberg and Holger Wiklund who co-created this article by providing all the great references of evidence. Photo by Helena Lopes on Unsplash.

/ Anna Gullstrand. Leader, speaker, and facilitator at Studio How. Co-founder of The Book Of Collaboration.

Anna Gullstrand