BCG Research: Why Joy at Work Matters More Than Leaders Think

We know some of the benefits of Happiness at Work:

• Productivity: Happier employees are 12% more productive, while unhappy employees are 10% less effective than the average. (University of Warwick)
• Higher-Performing: Happy salespeople sell 37% more than those who are not. (Shawn Achor, The Happiness Advantage.)
• Profitability: Companies with happy employees outperform their peers in the stock market by 12%. (Fortune)

And since this week, we can add one more benefit, and it’s a huge one: retention.

New BCG research from Debbie Lovich and Rosie Sargeant shows that employees who enjoy their work are 49% less likely to consider a new job than employees who don’t.

But are we joyful about the work we do?

Sadly, no, according to Gallup data, which shows that only 23% of people are thriving at work. 

Most of us are either quiet quitting or actively looking for a new place.

And this is likely because, as BCG says, most company leaders aren’t thinking deeply or strategically about whether their employees find their work interesting, rewarding, or fun. 

The management consulting firm calls the lack of joy in the workplace “a blind spot that could result in losing key talent.” 

BCG advises that with a “better understanding of what employees need—such as motivation and support—leaders can start to design programs and policies that flip the script” as “joy looks different for everyone.”

As CultureRX Managing Director David Scouler replied to a post on the study: “The topic of joy should be on the agenda of all board meetings.”

Why Employee Retention Matters

First of all, let’s talk about retention, since it will come up a fair bit in this newsletter.

Losing your top talent is incredibly painful for companies, as Debbie Lovich, a Managing Director at BCG and one of the study's authors, told me in our interview:

“We're still in a tight labor market globally, with 1.8 and 1.4 jobs per job seeker. People should care about retention. By the way, even if the labor market wasn't tight, we all know a high-performing employee is worth anywhere from 4 to 10 times as much as an average one.”

And indeed, research pegs the cost of losing your best people at 33% to 4x the employee's salary. Edie Goldberg, founder of E.L. Goldberg & Associates, says, "30 percent to 40 percent are hard costs, and the other 60 percent are soft costs." 

This is because employee turnover leads to increased costs associated with advertising, recruiting, onboarding, and training replacements, as well as decreased productivity and morale among existing employees.

As Debbie mentioned, this problem is exacerbated among top talent, as high-performing employees contribute significantly more to productivity than the average employee. (Plus, she shared the (in my point of view great!) analogy that “if a 20-year-old Scotch leaves, you can't brew a new one in 5 minutes.”)

And indeed, high performers are up to 800% more productive than the average employee. So, losing even just a few star workers can greatly impact your bottom line.

The Role of Joy in Retaining Your Best Talent

Back to the BCG research.

As shared above, it found that joy plays a huge role in whether people are engaged and want to stay with their company, and I want to repeat it just to make sure we understand how huge of an insight this is:

‍Employees who enjoy their work are 49% less likely to consider taking a new job than employees who don’t enjoy their work.

And not all employees are made equally.

‍Individual contributors are more likely to leave their jobs, and they tend to have lower job satisfaction ratings. 

On a scale from 0 to 100, where 100 is the highest possible level of enjoyment, and 0 represents no enjoyment at all, individual contributors rated their enjoyment at an average of 55. In contrast, executives rated theirs at an average of 76.

Oh, what fun it is to be the boss!

Younger employees are also at higher risk, even if they feel joy at work, possibly because of a lack of mastery, as newness to the role and lack of training make people less effective than their more senior and more tenured peers. (Which, let’s be honest, isn’t very joyful.)

How To Create More Joy at Work and Boost Retention

No one wants to lose their best people, so how do we improve joy and boost retention? For this, let’s dive deeper into the study’s findings.

Less Admin Work

A previous BCG study showed that individual contributors spend just over one-third (37%) of their time on affiliation and collaborative tasks. 

By contrast, managers and executives spend nearly half their time (49%) on work like onboarding new hires and giving feedback. 

Administrative work like email, filling in forms, and handling logistics takes up 29% of individual contributors’ time and yields little joy. 

Contrast this with individual development, which takes up only 5% of their time but yields high joy. Do you see the disconnect here?

Now, compare this with the experience of managers and executives, who spend nearly one-fifth of their time (19%) on interactive work—a task that consistently gives them joy.

So, less admin work, more joy. (If this sounds too obvious, good!)

Provide More AI Support

Obviously, when we’re talking about reducing admin work, we have to talk about AI.

This is where AI in the Workplace comes in, saving our day from digital overload.

In our study, Generative AI at Work, over 80% of Gen AI users reported that it had increased their productivity.

They shared it had done so by streamlining Email and Communication (50%), Data Analysis and Reporting (45%), and Research (42%.)

And the BCG data now shows that the more people use Gen AI for admin work, the better their satisfaction with work gets.

Of course, I’m familiar with the many barriers of AI adoption at work, but what alternative do companies really have? 

It’s a classic Innovator’s Dilemma. Embrace the new world, or be left behind. Don’t let this be your Kodak moment – be Instagram!

Want to get started? Join our live “4-Day Workweek Course” (registration closes March 7) or check out these Top 10 AI Productivity Tools for Work.

Your 4-Day Workweek Starts Today

Spots have already been snapped up since we invited you to the 2-week course + live coaching transformation towards a 4-Day Workweek.

From March 8, join a community of executives who will take serious action against senseless overworking.

This isn't just about working less; it's about achieving more freedom, family time, or money.

👉 Secure Your Spot Now and embark on this life-changing journey with us.  

Results Guaranteed: If you don't find value in the course, you get your money back, with no questions asked. (We’re that confident in the power of what we're about to embark on together.)

Embrace Hybrid Work, and Do it Well

As readers of this newsletter, there’s no doubt that hybrid remote and remote work creates happier employees.

We’ve seen countless benefits of remote work, as people who have autonomy at work and can choose where they work:

• Are more productive (hybrid’s biggest benefit, according to 35% of managers.)
• Showcase a 13% increase in performance (Stanford)
• Feel much less stressed. (Owl Labs)

And indeed, the BCG and Scoop’s FlexIndex data shows that hybrid outperforms in-office work significantly, even in a significant factor like company growth:

But, not all hybrid work is created equal, highlights the BCG study.

Models in which the hybrid work schedule for on-site or remote work is decided collectively by teams yielded the most joy and effectiveness.

Sadly, only 13% of respondents have team agreements, or as Debbie called them, “norming documents,” and can determine their work models together. 

By contrast, 59% of respondents say they receive work model mandates from above. This is a mistake, as team-decided models yield a 13% boost in joy over top-down mandates.

Additionally, Debbie shared in our interview that managers must learn how to lead differently. 

If people say that the company can’t have a strong culture or strong performance because it’s not in the office full-time, that’s an issue of how you run the company, nothing else.

Managers need to embrace a coaching leadership style and develop a strong muscle to manage remote teams successfully, says Debbie:

“That's the reason hybrid work isn't working for a lot of people because people don't know how to manage, inspire, motivate, coach, connect, mentor, and distributed teams. They only knew how to do it in the hallways. So you have to continuously surface what great looks like and spread it out.” – Debbie Lovich, BCG

In a TED Talk in 2021, Debbie already warned that ‘going back to business as usual’ is the biggest threat to a better future of work:

“And I have to tell you, the future of work is not going to be created with top-down, opinion-driven edicts from senior leaders whose day-to-day realities don't match those of us dual-career, time-pressed and income-pressed people. Of course, senior leaders want to go back. That worked for them. But they have to recognize that for 18 months now, their people experienced unprecedented agency, control, flexibility, trust and accountability.”

Give Them A Great Manager

As Gallup says in its 2023 Global Workplace Report, companies should only worry about two things:

1. Focus on your best employees
2. Give them a great manager

We’ve talked extensively about why managers are important, and the BCG research underscores this once more. 

As Debbie shared, when cutting the data further, the number one reason for people to stay in a company is “I am satisfied with my manager,” and number five is “I have someone senior at work who actively supports me, a mentor, someone who has my back.”

To create more great managers, Debbie advised not to go and learn how to be one from a textbook but to look in your organization what a great manager looks like and learn from them:

“What we encourage people to do is find their best managers, and sometimes it's word of mouth and their best first-line managers. The ones who are at the rock face of joy, the day to day for the most people. They could be people with the best retention, the best productivity, or the best safety record. Who are the people who are delivering both joy and productivity? Find them! And then do the ethnography; do the closet teardown of great managers.” – Debbie Lovich, BCG

And it’s not like they’ll be able to tell you their ‘secret,’ Debbie added, because it comes naturally to them. 

So instead, she suggests following those great managers around and comparing them with an average manager and spot the many differences:  

“They spend time out on the floor or randomly picking up the phone and calling people. When they talk to people, they ask them about the kids. They remember the kids names. When they see a work product, that's great. They send an email saying, “Oh my God, Debbie, Daan, that work you did together is amazing!” Or, even better yet, they pick up the phone and call them.” 

Treat People Like People

Debbie also noted in our interview that many factors correlating with retention are emotional.

The study shows that job security (number one), feeling fairly treated and respected for doing work you do, feeling valued and appreciated, and feeling supported are all mentioned ahead of pay (#15) when it comes to retention. 

This doesn’t mean you don’t have to pay well, but companies should be competitive on pay and differentiate on how you make people feel.

This means understanding what makes people tick, what drives their satisfaction at work, and, as this data shows, delivers a boatload of joy. 

The Bottom Line

Joy matters way more than people think, and it’s time to redesign work to increase enjoyment.

Put the people back in the center, design a work and workplace experience that fits their wants and needs, listen to them, and improve over time.

Debbie said it in her TED Talk, and it still holds today: “This is our moment, right now, to together with our people and our teams, design a future of work that's more engaging, more productive and more humane.”

Let’s make it happen!

Until next week,

– Daan