If you believe employee wellbeing plays a significant role in attracting and retaining talent, would you make it a top company priority?

According to a new survey conducted by Harvard Business Review Analytic Services sponsored by Indeed, the answer for many business leaders is “no.” Ninety-six percent of the 1,073 business leaders surveyed say that a happier workplace makes it easier to retain talent; 94% agree that it makes attracting better talent easier; and 87% believe it gives the organization a competitive advantage. And yet, only a third of leaders surveyed say they’ve made wellbeing a top priority — and just 19% have a wellbeing strategy in place.

For this article, we interviewed Alex Clemente, the founding Managing Director of Harvard Business Review Analytic Services, to better understand the reasons why the majority of business leaders don’t prioritize employee wellbeing and happiness, despite knowing its benefits. Clemente also offers additional insights — including how important trust is to employee happiness — as well as best practices for improving employee satisfaction. 

Employers understand the many business benefits of employee wellbeing 

The business leaders Harvard Business Review Analytic Services surveyed cite a number of benefits they’d expect from a happier workforce: lower staff turnover, better employee engagement, higher productivity, more effective teamwork, improved customer service and interactions, and a greater ability to adapt to change. 

“Who wouldn’t sign up for those benefits?” Clemente wonders. “These are things every business needs.”

What’s more, when asked which factors are most important to their organization’s success, customer happiness ranked first among respondents, followed closely by employee happiness. “The prevailing wisdom is that you can’t have happy customers unless you have happy employees,” Clemente says.

During the current pandemic, your organization’s customers are likely paying attention to your employees’ wellbeing and safety, too. “We all want to do business with companies that take care of their employees,” he explains.

And in the wake of the Black Lives Matter protests, “we’re more aware of how diverse a company’s workforce is,” Clemente says. “Ultimately, the way companies behave not only has an impact on who decides to work for them and how long they choose to work for them; it also can determine who decides to do business with them.”   

Why most employers don’t prioritize employee satisfaction

There are numerous reasons why some employers don’t prioritize employee wellbeing and happiness despite understanding the benefits. Some examples:   

  • Employee wellbeing and happiness initiatives are still new-ish. The concept of employee happiness has its roots in employee engagement, something organizations only began to focus on in the early- to mid-2000s, Clemente explains. “Organizations were trying to figure out how to get the most out of their employees, so they started doing engagement surveys and scoring. But most companies didn’t know what to do with that data. And because most haven’t done employee engagement very well, they just aren’t there yet when it comes to employee happiness and wellbeing initiatives.” 
  • Managers aren’t always trained. Too often, managers are focused on productivity, efficiency and profits, Clemente says. Consequently, they aren’t always trained in the fine art of people management — and that includes active listening, which is so important to employee happiness.
  • Many business leaders believe happiness is the employee’s responsibility. Nearly all executives surveyed — 95% — feel they have at least some control in influencing the happiness of their workforce. But nearly half say employees bear most of the responsibility for their happiness. And only 24% say the CEO or top management executives are responsible.

A key ingredient to happiness that’s even more important now

Among the report’s many fascinating findings regarding employee wellbeing and happiness, the importance of trust stands out. 

When Harvard Business Review Analytic Services asked business leaders what they believe are the top drivers of workplace happiness, a sense of purpose ranked highest. Though trust ranked second, its importance can’t be discounted, especially during difficult economic times.

As mentioned in the report, a national restaurant chain illustrates the importance of trust in employee happiness and wellbeing. Several years ago, the company faced operational challenges but was transparent with employees about how those challenges might affect them. How the company met — and communicated to employees — those challenges didn’t just help the bottom line, however. The restaurant chain’s next employee engagement survey showed the percentage of employees who said they planned to be with the company in five years had tripled.

Today, COVID-19 has hit the restaurant industry hard. Again, that same restaurant chain is communicating its challenges and their impact on employees in a completely transparent manner. Employees know that senior leaders are doing everything they can to make sure the company survives, so it can return to being a great employer in the future. And that helps give employees a sense of trust in the company and its leadership.  

How to improve employee wellbeing and happiness

In addition to creating and maintaining trust through transparency and honest communications, the report’s recommendations include incentivizing and training managers to prioritize their team members’ wellbeing. Employers should also share mutual responsibility for happiness and wellbeing with their employees, rather than leave it entirely up to workers.

Listening to and acting upon employee needs and concerns is crucial. “A lot of organizations have figured out how to listen to their customers, measure their happiness with analytics and make improvements,” Clemente says. “But I recommend they apply the same techniques to listening to their employees, so they can measure and improve their wellbeing.”

Perhaps most importantly, businesses should avoid the trap of prioritizing the bottom line far above everything else.

“Financial performance is dependent on the commitment and goodwill of your people, period,” according to Josh Bersin, who runs a professional development organization for HR professionals and is quoted in the report. “If they’re not well trained and engaged you’ll eventually have problems with turnover, customer service, and a lack of willingness to adapt to business change. 

“And right now, change is the biggest thing companies are dealing with.”

Learn more about work wellbeing and Indeed's Work Wellbeing Score.