In 2012, John de Koning’s company did something surprising: they decided their number one priority would be the happiness of their staff.
His employer, IT firm Incentro, based in Utrecht, the Netherlands, once operated as a traditional online services provider, with a top-down hierarchy of bosses and employees. But after a market downturn between 2002 and 2005, the management rebooted to become less flashy but more fun; a place where talented, ambitious young professionals would want to work.
Now, all staff are equal and all information about the business is shared. Instead of the usual pyramid structure, people work in independently functioning ‘cells’ – groups of 60 or fewer. As well as organising their own work, they take part in company-wide decisions and even set their own salary. Rather than senior management dictating pay rises, each ‘cell’ or team decides whether they are happy to share salary information. If so, they make a collective decision on what they should earn – based on everyone knowing the full financial picture of the company.
The Incentro team in Utrecht, Netherlands, with Dutch astronaut Andre Kuipers (Credit: Incentro)
“We decided to introduce just one key performance indicator, and that’s employee happiness,” says de Koning, managing director of Incentro Marketing Technology. By doing so, staff numbers have grown from 40 in 2008 to more than 300 today across four countries, he says.
There’s a burgeoning new niche of happiness-at-work consultants offering to inject joy into the workplace
While structural and organisational changes may not get the pulse racing compared to gourmet lunches or gaming consoles, Incentro’s approach to fostering staff contentment is shared by a growing number of companies – so much so that there’s a burgeoning new niche of happiness-at-work consultants offering to inject joy into the workplace with similar advice.
So is there an outbreak of idealism in the boardroom? Not quite. Research suggests that smiling faces in the office are also good for the company’s bottom line.
There are many benefits to putting happiness at the centre of business and policy decisions, says economist Jan-Emmanuel De Neve, a professor at the University of Oxford’s Said Business School. He points to a 2014 study, which suggests that raising people’s happiness makes them more productive by between 7% and 12%.
Raising people’s happiness makes them more productive by between 7% and 12%
In a separate study, researchers took Fortune’s annual list of ‘Best Companies to Work For’ and compared it over time with how peer companies performed on the stock market. They found that the top best-to-work-for firms outperformed the others, and also that investors undervalued the intangibles of employee well-being.
Workers who believe in the mission of their company are happier and more productive, says Economist Jan-Emmanuel De Neve (Credit: Graham Trott)
It’s an important piece of research, says De Neve, because it shows that the potential cost of raising well-being is more than matched by productivity and increased performance. Consultancies offering to perk up the mood in the workplace are targeting a potentially large market. In his work for the United Nations’ latest World Happiness Report De Neve found that fewer than 20% of people worldwide were actively engaged with their job and 20% were actively disengaged.
Active engagement is more than mere satisfaction in a job, or at having a job in the first place – it is being positively absorbed by the work you’re doing
Active engagement is more than mere satisfaction in a job, or at having a job in the first place, he explains – it is “being positively absorbed by the work you’re doing, identifying with and promoting the mission of the company you’re working for.”
One 2016 UK study tracked tens of thousands of people who recorded their sense of well-being at different times of day on a smartphone app, ranking 39 activities in terms of happiness levels. Of the 39, paid work ranked second from bottom – just above being sick in bed.
So what’s making people so melancholy? Listening to would-be career-switchers, and looking at other studies, it’s about a lack of purpose and meaning in work and a sense that it’s impinging too much on other aspects of life.
When work is a grind
More than 1,000 discontented people have spent £2,000 ($2,570) each to join 12-week courses run by Escape the City, a training and recruitment consultancy based in London and New York. “The courses are designed to help people get unstuck or to start a business,” says co-founder Dominic Jackman.
You’re going to be working for a long time so let’s enjoy our time at work and make an impact - Dominic Jackman
Typically, participants are aged 27 to 35, the majority are female and employed in corporate roles where they feel their role lacks purpose, says Jackman. Many joined large corporates through grad schemes.
Escape the City co-founder Dominic Jackman says clients want careers with autonomy and impact (Credit: Escape the City)
“You work very, very hard. You get paid well. But the notion of a job that makes you feel alive takes a backseat,” he says. Increased life expectancy and higher retirement age mean people’s attitude to work is changing. “You’re going to be working for a long time so let’s enjoy our time at work and make an impact,” says Jackman.
Portfolio freelance careers, remote working as a digital nomad, creating your own start-up and an “impact career” with a purpose-before-profit company are the four most sought-after new paths for his clients, he says. “It’s about making a difference to society, having a purpose and making it more sustainable. People want to work for a company that’s making things better for the world.”
But if changing career tracks isn’t an option, what do people think would brighten their daily grind?
Wages are far less important to happiness at work than issues related to work-life balance and having colleagues’ support and social capital in the workplace, according to De Neve’s analysis of European data. Having variety in the job, learning on the job and having a sense of autonomy and control over what you are doing were also valued, he says.
So what do consultancies propose? For Netherlands-based consultancy Corporate Rebels, which helped Incentro fine-tune their ideas, the approach stems from co-founders Pim de Moree and Joost Minnaar stepping out of corporate life to travel the world collecting pioneering ideas on how to foster a happy workplace.
Corporate Rebels co-founders Joost Minnaar (left) and Pim de Moree quit their corporate jobs to research the world’s most progressive workplaces (Credit: Julie Gallo)
De Moree tells his clients the key to happiness “involves moving from profit to purpose, from hierarchy to a network of teams, from leaders who tell people what to do, to leaders who ask how they can best support [their team], from rules to freedom, from secrecy to transparency.”
From what they have learned from business leaders and entrepreneurs who have put employee happiness centre stage, Corporate Rebels suggest open-book management – where everyone knows the financial and operational details of where they work. Another is results-based working, where it doesn’t matter how many hours you work, as long as you get the right result.
Their stories underpin the data referred to by De Neve about a clear link between staff well-being and financial results.
“The level of well-being of employees ought to be measured systematically and put on page one of the annual shareholders’ report,” he says. “It would send a strong signal about how a company is doing, and how it will be doing in the future.
“There’s a philosophical argument about how looking after staff well-being is the right thing to do, but there are also huge objective benefits.”