Author Talks: Are your employees happy at work?

In this edition of Author Talks, McKinsey’s Vanessa Burke chats with Jan-Emmanuel De Neve, director of the Wellbeing Research Centre at the University of Oxford, about Why Workplace Wellbeing Matters: The Science Behind Employee Happiness and Organizational Performance (Harvard Business Review Press, Spring 2025), coauthored with INSEAD assistant professor George Ward. De Neve shares data analysis on the feelings and motivations of millions of job seekers and identifies key drivers that influence their workplace well-being. He explains why workplace well-being varies across companies and provides evidence-based ideas for business leaders who seek to improve productivity, recruitment, and retention. An edited version of the conversation follows. You can watch the full video at the end of this page.

What was the motivation for writing this book?

The motivation for writing Why Workplace Wellbeing Matters is a sense of duty. Primarily, my wonderful coauthor, George Ward, and I have been working on workplace well-being from different angles, measurement, drivers, behavioral outcomes, and effects of change that work in a small bank. We’ve witnessed a lot of practitioners trying to get clarity about the definition of workplace well-being, how to measure it, and how to better understand what drives it.

Second, we’ve been working on this subject for many years. We have developed papers on measurement and differences between organizations, key drivers of workplace well-being, links between workplace well-being and productivity, retention, recruitment, job search behavior, and then connections between firm performance and stock market performance.

We had multiple disparate elements, and it was time to bring it all together. In the book, we cover all of these elements.

Were you surprised by anything you discovered while writing the book?

There were two surprises. Most of us want to do well for our colleagues and have them be happy at work. Yet, I was somewhat disappointed about the [lower] prioritization of workplace well-being.

There is a big discrepancy between walking the walk and talking the talk. Eighty-four percent of managers say, “Yes, if I can improve workplace well-being, it will be an advantage for my business.” Yet in the same survey, when asked about competing priorities, only about one-third of senior staff thinks of workplace well-being as a strategic priority. Only half of those have a strategic plan with actions to try, drive, and positively shape workplace well-being.

The most surprising finding throughout the process of the book was the extent to which there was still a need to focus in on and hammer home the business case for workplace well-being beyond just a human case.

It sounds like you had to convince people to pay attention to this issue.

At first, the book’s title was going to be Wellbeing at Work, a generalist title related to the subject. Then, in discussions with the editor and our agent, the title began moving in the direction of why workplace well-being matters. Like a manifesto, we were making the strongest possible case for why people should consider workplace well-being and invest in it, for helping people on the front lines, and giving them the tools to be the best people managers.

What are some areas of employees’ lives affected by workplace well-being?

Workplace well-being is how we feel at work and how we feel about the work we’re doing. It is subjective. But everything around the workplace shapes that well-being, whether you’re being paid fairly, have kind and supportive line managers, and the flexibility that you need to maintain work–life balance, health and safety, or autonomy.

Workplace well-being refers to how all possible things that shape your day-to-day work environment and your experience at work feed into your feelings about work. How does workplace well-being influence our general lives?

Most of your waking hours are spent at work, so the influence that our work has on our general well-being is huge. The quality of our environment and our experience affect our life satisfaction. If life satisfaction is the overarching criterion for general well-being, or a metric for it, in turn, job satisfaction is essential for workplace well-being. Job satisfaction is a huge driver of life satisfaction. It shouldn’t be underestimated at all.

If you’re a people manager and you invest in workplace well-being and see positive traction, it’s not just good for the business. It is also good for growing social impact because people will go home in a much better mood, which then has a domino effect on their communities. When you think about it from a societal perspective, the importance of investing in workplace well-being is also a societal imperative.

Let’s talk about how workplace well-being affects performance at work.

Well-being affects work performance in three clear pathways.

1. Productivity. You will be more productive—in the context of British Telecom call center employees, workplace well-being contributed to about a 12 percent increase in weekly sales. That’s the first pathway to performance.
2. Retention. Workers are more likely to stay on the job. Retention rates are much higher for organizations with higher workplace well-being.
3. Recruitment. You will be able to recruit and attract better talent.

In no small part thanks to our partnership with Indeed, we’ve been able to experiment at a large scale. We’ve randomized 24 million US job seekers, and what we found is staggering. When you show job seekers data related to workplace well-being, they respond behaviorally. For example, they’re more likely to submit applications to places with higher work well-being scores on Indeed.

In the book, we share the connections between these three pathways. We show that these pathways run downstream into the bottom line. We look at comparable data in terms of workplace well-being for about 1,800 of the largest listed companies.

We look at their quarterly results, whether for value, or profitability, or gross profits in the billions of dollars. There is a very strong correlation between the average workplace well-being score in these organizations and financial metrics. Workplace well-being is also a leading indicator of future stock market performance.

Take the top 100 out of the 1,800 or so that we’re considering: If you invest money at the start of the year in those companies and leverage historical data of the past year’s work well-being score on Indeed, what we find is that you outperform the stock market—significantly so.

That’s really exciting. It shows the effects of work well-being on business performance by way of productivity, recruitment, and retention. It’s not just a dynamic, two-way relationship. There’s also predictive power of work well-being on later earnings and stock market performance.

Regarding technological advances such as AI, why do we need to focus on job quality versus quantity?

When people think of the future of work, the question is typically, “Automation, AI, machines, that whole package of the future work, and all the technology driving it, how will it impact our jobs?” Then the question quickly turns to, “Whose jobs are going to survive?” or “What aspects of the jobs will change?” or, if you’re a young person, “What should we be studying in the future to try and have a job in the first place?” Those questions revolve around the quantity of jobs.

My mentor, Andrew Oswald, the famous professor at the University of Warwick on economics and well-being, told me to review historical trends in employment statistics and to note their stability. I essentially make the argument that labor markets and supply and demand find one another. Sure, there is friction, and there will be reskilling and retraining. But the bigger question, and the one where we can contribute something as scholars of well-being science, is what happens to the quality of jobs? How will jobs change? Will that be for the better? That is a qualitative argument and one where we should focus. Those are very tough questions, but very important ones.

We started thinking through the future of work and its impact on workplace well-being in a systematic way: We’ve got six drivers, these six key determinants of workplace well-being. How are AI and technology impacting each of these aspects of our jobs?

When you look at these distinct drivers of workplace well-being, there are differences. People think that AI will improve flexibility, for example, and that’s good. But they are more reticent and more wary about how it will impact our social lives at work.

As it turns out, it’s the social aspects of our human working lives, the sense of belonging that we have in the community at work, that is critically, critically important and usually underestimated in driving workplace well-being. For example, the belief that AI and the future of work will put pressure on human relations through work is a real problem.

What are companies with high workplace well-being scores doing that others aren’t?

We now have 20 million plus workers, mostly in the US but in many other markets as well, who’ve told us how they feel at work and why. The first thing to notice is the huge variation in responses. At the organizational level, there are hundreds of thousands of organizations in the US alone that we’re able to compare like-for-like, and even within industries, there are huge differences.

For example, in the hamburger industry, you’ll find differences that are really large for very similar jobs. In two burger places doing roughly the same job, the average workplace well-being score, on a one to five scale, may be much closer to four in one place and two in another. So, how is it possible that there are such differences in similar companies’ scores if they’re doing the same job? What is it that some of these companies with high workplace well-being scores on average do differently? Those differences matter, because we know how they impact productivity, recruitment, retention, and more.

There’s no way to turn things around for workplace well-being overnight. There are larger, structural, environmental, and cultural factors at play. There’s also no individual-focused, wellness-type approach that is likely going to move the needle very much.

We have to think more holistically, structurally, environmentally. When we delve into what sets companies with high workplace well-being apart from those with lower scores, that’s where a strong sense of belonging arose.

All elements matter: flexibility, health and safety, fair compensation, managerial support, trust. But they all matter to different extents. What we’ve found is that when you break down that sense of belonging, it’s essentially people feeling like they belong and are treated as human beings in their organization; that they have friends at work; that they feel like they know what the impact of their role is within the organization; and how they impact others within the organization.

All of these things come together in a sense of a culture of belonging, and you cannot underestimate the importance of that. In the HR space, it’s often said that people don’t quit their jobs; they leave their managers or they leave their teams. What you find is that it’s the social element that gets people out of bed and excited to go to work and be engaged. If that fails, if you don’t get along with your coworkers, if you’re being bullied by a line manager or a line manager is not supportive, it’s not motivating. That strongly affects feelings at work and, in turn, performance.

It’s a lose–lose situation if you end up in that vicious cycle, and then people leave or ask to leave. The social element, feeling like you belong, is a driver of workplace well-being that really stands out as separating the great companies from the not-so-great companies.

What is the main takeaway you’d like businesses to grasp?

In summary, measure what you treasure. It really does start with measurement, then understanding and acting on those assessments.

One thing that I want people to realize is that this is not a call to set aside your staff surveys or methods for measuring engagement or well-being. Rather, think through and revamp how you handle your staff surveys. Ideally staff surveys are run quite frequently, but it’s a light touch, more like pulses rather than a massive, once-a-year survey. By the time you pick up the trend, the problem is gone, as well as its source, and it’s too late to resolve the issues. So, frequent pulsing is recommended, along with the conceptual clarity of knowing what you’re measuring and how to interpret it.

Ultimately, the overarching indicator in our findings is that all aspects of work feed into how you feel about work. And that gets captured in a very basic way. For example, “Are you satisfied with your job?” If you’re compensated fairly, have good line management, and feel a sense of belonging, all these things will determine whether you’re satisfied with your job and whether you’re happy at work. That single indicator is already very valuable and is a KPI. The takeaway is don’t just look at all of the items in your survey collectively. Look at each of the 25 without seeing a conceptual structure between them.

An item like “job satisfaction” is an overarching feeling of how people feel at work, and a lot of the other items in your survey will be drivers or inputs into that. Compensation, flexibility, trust, and health and safety items will affect how people feel about work. Feelings about work captured by, for example, job satisfaction, then explains your employee satisfaction score.

For example, you will only stay at a job if you’re happy working there, and that could be because of money, belonging, purpose, or habit. Once you begin delving more deeply, you realize the operative element here is how you feel. It’s hard for leaders to understand that a subjective feeling is the outcome of a lot of hard, practical inputs, like health and safety, and pay, and that feeling drives behavior, like productivity and engagement.

If you can improve workplace well-being, there will be downstream consequences, positive benefits through employee satisfaction scores, retention, recruitment, productivity, and engagement. It will flow from feeling better while at work. All of that ultimately flows into an improved bottom line.

Is there anything else you’d like to add?

One important thing: thanks to McKinsey Health Institute, which is a founding member of the World Wellbeing Movement, a charity that I’ve set up. It brings together visionary and exemplary corporates including the likes of Indeed, LEGO, HSBC, and Unilever. Major corporates and foundations have come together to put well-being metrics at the heart of business and public policy.

One of our key achievements is to compile resources and create a playbook that contains a systematic, global review of the interventions that have been evaluated and assessed, and to rank these by the type of driver of workplace well-being and by the strength of the evidence. Thank you to all the founding members of the World Wellbeing Movement who put their resources into this effort. It has allowed us to do a systematic evidence review of what drives workplace well-being.

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