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Businesses looking to make an external social contribution should, paradoxically, look inside: improving workers’ job satisfaction could be the single most important thing they do.
Today’s leaders have never been under so much pressure. Even as they navigate the evolving COVID-19 crisis—keeping their customers and employees safe and their businesses viable—expectations are sky-high. Shareholders are calling for foresight, bold strategies, agility, and resilience, while governments and communities increasingly expect businesses to support broader goals, such as sustainability and social justice.
For purpose-led corporations, this is a defining moment. How can they remain committed to additional stakeholder values when the imperative is to conserve cash and, in many cases, aggressively restructure? And what about businesses that have only started defining their environmental, social, and governance (ESG) ambitions? When push comes to shove, do their leaders (and shareholders) really believe in the ESG premium? And, if so, where can they best focus their attention?
To move forward, rather than stand paralyzed, crystal-clear prioritization will be key. In this article, we argue that there is one essential area where companies can create enormous social value: job satisfaction. Because of the connection between happiness at work and overall life satisfaction, improving employee happiness could make a material difference to the world’s 2.1 billion workers. It could also boost profitability and enhance organizational health.
When it comes to employee happiness, bosses and supervisors play a bigger role than one might guess. Relationships with management is the top factor in employees’ job satisfaction, which in turn is the second most important determinant of employees’ overall well-being. According to our analysis, only mental health is more important for overall life satisfaction (Exhibit 1). Unfortunately, research;also shows that most people find their managers to be far from ideal; for example, in a recent survey, 75 percent of survey participants said that the most stressful aspect of their job was their immediate boss. And those describing very bad and quite bad relationships with management reported substantially lower job satisfaction than those with very good and quite good relationships (Exhibit 2).
Exhibit
Shifting the behavior of an entire cadre of managers might seem a daunting proposition. But McKinsey research on changing organizational culture;indicates the key elements required. Senior leaders can create a step change in...