ANY OTHER BUSINESS: Wellbeing at work
In pursuit of happiness
Putting happynomics at the heart of a business could make for a healthier bottom line, finds Jan-Emmanuel De Neve, Associate Professor of Economics and Strategy at Saïd Business School.
In the last couple of decades, there has been a strong movement towards defining and measuring wellbeing.
My original specialism was the social sciences, but I started looking at behavioural genetics, and one of the main findings I unearthed was the strong link between a specific genome marker and wellbeing. That discovery made quite a splash and connected me with a number of experts in the economics and happiness field.
Earlier this year, I published the findings of a working paper, Top Incomes and Human Wellbeing Around the World co-written with Richard Burkhauser from Cornell University and Nattavudh Powdthavee from the London School of Economics.
We knew that happiness has a relative, rank-based component to it. So if you become richer, for example, you receive a salary bump, then that will in all likelihood make you feel happier to some extent. But if your peer group becomes richer – perhaps they receive an even greater salary bump than you do – then it also influences your own level of happiness. What we did not yet know is the important role that the range of the income distribution plays in one’s happiness in addition to one’s rank.
We found out about this by zooming in on the very top earners – the top 1% – and found that a 1% increase in the share of taxable income held by the top 1% has an equivalent impact on general wellbeing as a 1.4% increase in the country-level unemployment rate. So if the top 1% races ahead, even if you stay in the same financial rank, the fact that the range has extended upwards has a negative impact on your wellbeing.
‘The range has never been properly accounted for in the economics of wellbeing’
“Rank” and “range” are the two words at play here. The range has never been properly accounted for in the economics of wellbeing, but how far away you are from the top end of the range has become much more important to people. Why is this finding important? Because there is a strong link between happiness and productivity. If you are able to increase people’s wellbeing by one standard deviation, this can have an 8–12% increase in productivity associated with it – so it’s significant.
That’s why companies should put wellbeing at the heart of their business. Studies show that if companies excel at cultivating strong levels of employee satisfaction, this translates to better performance, both against their industry peers and on the stock market.
Companies that are good places to work attract better talent, more talent, can retain their employees more easily, and crucially make them more productive, so there are a number of economic benefits to fostering a happy workforce.
Oxford Saïd ran its first Wellbeing Day for staff in September 2016, which included interactive workshops about emotional health, fitness and nutrition, alongside other wellbeing awareness activities.