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Is Happiness The Key to Keeping Employees?

What separates a long-haul employee from a burnout? Life circumstances? A sense of purpose? Sheer perseverance?

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Cracking the code can seem impossible when every departure has a different story. But for obvious reasons, employee retention has become a hot area for research. Recent studies are shedding light on whether the usual suspects actually add to employee tenure.

While retention researchers haven’t arrived at an end-all, be-all answer, they’ve sketched out a few factors that seem to strengthen employee-employer bonds. Taken together, the data points to a concept we’re all searching for: happiness.

Purpose Plays a Role

Listen to any conversation about retention long enough, and one word is bound to come up: purpose. But do companies with a clear purpose do a better job of keeping their employees? 

A Deloitte study about cultures of purpose seems to suggest so. The report found that 73 percent of workers who say they work for a “purpose-driven” company are engaged; just 23 percent of those who don’t think they work for such a company said the same. Is it any surprise that employees who think their company has a purpose beyond making money for shareholders would say they’re more invested in that purpose?

Close readers will notice that data in the study hints at a confounding variable: executive transparency and rapport with workers. Consider that the report found that 41 percent of executives surveyed said that the company’s purpose plays a significant role in its business decisions, while just 28 percent of employees said the same. Similarly, it showed a seven-point gap between the number of employees and executives who think their company’s purpose is communicated well.

So while having a clear company purpose may promote retention, it’s no savior. Just as important is strong communication between leaders and workers.

Communicative Leaders Are Key

Unsurprisingly, an Interact/Harris Poll detailed in Harvard Business Review found 91 percent of employees think communication issues can get in the way of effective leadership. What’s surprising about the study is its ranked list of specific complaints employees shared: The majority of them described trust-busting actions that would make any of us think twice about a job.

Out of 1,000 U.S. workers, 63 percent said not recognizing employees’ achievements was stopping leaders from being more effective. Coming in second, at 57 percent, was giving unclear directions; third was not having time to meet with employees, at 52 percent.

While the study didn’t connect those complaints with retention, the HBR article did offer some tips to help leaders better connect with their workers. Overwhelmingly, they’re simple, friendly steps that bond people to a team: saying “thank you,” asking what an employee thinks, taking the time to share a lesson, or even just saying “hello” to someone by name.

Friends Make It Fun

It’s not just friendly executives who seem to play a role in employees sticking around; it’s a culture of friendship across the office. A Workforce Magazine study conducted by Globoforce found that people with work friends are less likely to take a job offer for a position outside their company. Of employees with one to five friends at work, 62 percent said they’d reject the offer. Among those with between six and 25 friends at work, that figure grows to 70 percent.

What, exactly, do work friendships add to a job? According to the Workforce survey, 61 percent pointed to support through challenging life circumstances, while 55 percent said their work relationships were “very or extremely important” to their life satisfaction.

Annie McKee, program director at the University of Pennsylvania’s Graduate School of Education, suggests in her book “How to Be Happy at Work: The Power of Purpose, Hope, and Friendship” that it’s this dedication to friends at a company (rather than the company itself) that encourages employees to stay. “When we feel cared for — even loved, as one does in a friendship — and when we belong to a group that matters to us, we are generous with our time and talents because we’re committed to people, not just the company or job.”

Where Purpose and People Meet

A job that’s fulfilling, leaders who keep everyone in the loop, and friends who work side by side: What does that sound like? Something that’s scarce in workplaces around the world: happiness. 

Of course, happiness isn’t easy to measure, much less to correlate with retention. But business leaders are adding weight to the happiness hypothesis with their own experiences. David Tomás, co-founder of Cyberclick Group and an Entrepreneurs’ Organization member, explains in an EO article that happy employees are “the key to sustained prosperity.”

Tomás uses a three-step process to assess, understand, and improve employees’ happiness levels. Beginning with a “green yellow red” survey, Tomás asks his team to rate their mood at the beginning and end of the day. To discuss happiness barriers and solutions, he holds regular employee forums, during which he cautions managers not to analyze or “grade” employees on their responses. Most importantly, he acts to resolve those happiness roadblocks, and he checks in with employees via the next survey and forum to determine whether his actions have made a difference.

The work of Tomás and his entrepreneurial peers may not rise to the standards of scientific validity, but it aligns well with what studies are finding: Purpose-driven, communicative, and friendly workplaces are happy, healthy workplaces. They’re the workplaces where we all want to be, whether science can prove it or not. 

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