Lessons From COVID About Work and Well-Being

Happiness is a word that we associate with people being cheerful, experiencing pleasure, or maybe a feeling of contentment. How does this relate to work life? Like the psychologist, Maslow, we here at BHI are passionate that the working environment enables everyone, to be in a position, to have the ability to reach one’s talents or potential.

Human life will never be understood unless its highest aspirations are taken into account. Growth, self-actualization, the striving toward health, the quest for identity and autonomy, the yearning for excellence (and other ways of phrasing the striving “upward”) must by now be accepted beyond question as a widespread and perhaps universal human tendency … (Maslow, 1954, Motivation and Personality, pp.xii-xiii)

It is important to measure wellbeing and to understand the drivers that may be at the root cause of unhappiness, which if left unaddressed, will in turn, lead to an unproductive work environment.

Remember happiness creates success.
Maslow, A.H. (1987). Motivation and Personality. (3rd ed.). New York, NY: Harper & Row.

Key points

  • Most company leaders acknowledge that employee well-being can give their company a competitive advantage, but few make it a strategic priority.
  • The widespread adoption of remote working may offer employees more flexibility but may hamper a sense of belonging and inclusion.
  • Employers may have to strike a balance between office life and working from home to increase employee well-being.
  • Because happy employees are more productive, business leaders should track employee well-being and make it a priority.

Workers are about 13 percent more productive in weeks when they are in a positive, happy mood, past research indicates. In this year’s World Happiness Report , of which I am a co-editor, we have uncovered just how vital the workplace itself is for people’s well-being, especially for those without strong social connections outside of it. If we are to build back better following the pandemic—which colleagues at the IFS have shown reduced countries’ mental health by up to 8 percent—it is vital that business leaders understand and act upon these findings by monitoring their employees’ well-being.

While becoming unemployed during the pandemic is associated with a 12 percent drop in life satisfaction, we find that workers who were lonely before the pandemic fell much lower still in terms of their well-being during furlough or redundancy. Perhaps this isn’t surprising. But what should make business leaders and politicians alike take note is that even people on furlough who retained their full salary experienced a drop in happiness—this was no extended holiday.

In an HBR survey commissioned by job search site Indeed.com this time last year, it was found that 87 percent of company leaders acknowledge and understand that employee well-being can give their company a competitive advantage. Yet in the same survey, only 35 percent had made it a strategic priority. As such, it is perhaps not surprising that in general surveys we find over and over again that most people aren’t particularly happy or engaged at work.

What Makes Employees Happy?

Even those who do make employee happiness a priority are likely misunderstanding its drivers. When asked, most leaders would say that it is pay, flexibility, and appreciation that drives happiness. They are right on flexibility, but quite wrong on the other two. Our analyses of what actually matters for employee well-being shows that pay is somewhere in the middle of the pack as a driver of happiness. As for appreciation, leaders might save their “well dones” and focus instead on fostering a sense of belonging and inclusion within their organisations—employees will be all the happier for it.

The broad adoption of remote working is probably the one silver lining to the pandemic, with some 20 percent of employees currently working from home, up from about 5 percent before the pandemic (but down from 50 percent at the height of the original lockdown in April). Working from home has already become permanent for some workers and is great for flexibility, but will hamper efforts to forge a sense of belonging and inclusion, especially among new employees who will never have met their co-workers in person.

The clear route forward is a smart “hybrid” future of work that strikes a balance between office life and working from home to maintain social connections while ensuring flexibility for workers. This is vital given the outsized role that work plays in giving us both a social identity and a social network—both of which are cornerstones of our psychological well-being.

Get this balance right, and employees will be happier and more productive. However, it’s important to note that the impact of our well-being on productivity is only one channel between employee well-being and company performance, because a happier workplace will also attract more talent and will retain it longer. And while in previous years potential applicants to a company would have learned about its workplace morale via word of mouth, today they can simply look it up on websites like Glassdoor or Indeed, which crowdsource employee data on a massive scale and are starting to make these numbers public.

This new level of transparency on workplace well-being may increasingly drive job search behaviour and set apart those workplaces that are enjoyable to work at versus those that are not.

So, aside from forging a hybrid model of work for employees, what should employers do differently? The answer is relatively simple: They should measure their employee’s well-being and track these numbers with the same level of attention they would normally pay to financial reports. After all, what gets measured gets done. If organisations strive to get this right, then there is all the reason to believe we can forge a healthier and more productive future of work, leading in turn to a happier society.

Jan-Emmanuel De Neve, Ph.D., is an Associate Professor of Economics and Strategy at the University of Oxford’s Saïd Business School and the Director of the Wellbeing Research Centre.