Episode 240: The Hidden ROI of Workplace Wellbeing (with Jan-Emmanuel De Neve)
If people are our greatest asset, why is wellbeing still treated like a perk instead of a priority?
In this episode of the Digital HR Leaders podcast, host David Green explores this very question with Jan-Emmanuel De Neve, Professor of Economics at Oxford and Director of the Wellbeing Research Centre, co-editor of the World Happiness Report, and co-author of Why Workplace Wellbeing Matters.
Tune in as Jan shares eye-opening insights from a massive global dataset of over 25 million workers, revealing why employee wellbeing is a business-critical priority.
You’ll hear:
The real drivers of happiness at work (and why most companies get it wrong)
How employee wellbeing directly impacts performance, retention, and recruitment
The role of AI in shaping the future of meaningful, human-centered work
This is a must-listen for HR and business leaders ready to shift from wellbeing-as-an-initiative to wellbeing-as-a-strategy.
This episode is sponsored by Mercer.
To thrive in an AI-augmented world, organisations must rethink how work gets done. Mercer’s Work Design solution uses AI to deconstruct jobs, redeploy tasks, and redesign work for greater agility, productivity, and impact.
Unlock your team’s full potential. Learn more at mercer.com/wfdemo
Links to resources:
This episode of the Digital HR Leaders podcast is brought to you by Mercer.
[0:00:08] David Green: For years, we've heard the familiar refrain, "Our people are our greatest asset". But if that's true, why does workplace wellbeing still feel like a luxury rather than a strategic imperative? In today's world of work, where burnout is rising, employee engagement is wavering, and the nature of jobs is evolving rapidly, employee wellbeing is an absolute business-critical issue, and few people understand this better than my guest today. I'm your host David Green, and today on the Digital HR Leaders podcast, I am joined by Jan-Emmanuel De Neve, Professor of Economics and Director of the Wellbeing Research Centre at the University of Oxford. Jan is also the co-editor of the World Happiness Report and co-author of the recently published book, Why Workplace Wellbeing Matters.
Drawing on data from over 25 million workers through a landmark partnership with Indeed, Jan shares what the evidence tells us about how people truly feel at work and why that matters. We look at the tangible impact on business outcomes, everything from productivity and innovation to recruitment, retention, and financial performance. And we also examine the role of leadership, organisational culture, and technology, especially AI, in shaping the modern workplace. This really is an eye-opening conversation, packed with research and a compelling case for why investing in how people feel at work isn't just the right thing to do, it's a strategic necessity. So, without further ado, let's get the conversation started with a brief introduction from Jan.
Jan, welcome to the show. For those meeting you for the first time, can you tell us a little bit about your background, your research and your work-life passion?
[0:02:00] Jan-Emmanuel De Neve: Thank you, David, for having me on your podcast. And so, yes, as you kindly introduced me, I'm Professor of Economics and Behavioural science. So, that gives you a sense that it's not macroeconomics or trade, but more towards the behavioural side of things. And I'm at the University of Oxford, and more officially, at the Saïd Business School. And that will give you a hint that the fact that we're always looking at behavioural economics in the context of businesses. And then, at Oxford, I set up the Wellbeing Research Centre, as you know, which is now a group of about 20 frankly stellar, young, old, and in between scholars, postdocs, working on the empirical science of wellbeing through a variety of angles, including of course workplace wellbeing, which I sort of personally lead that work stream, but also childhood lesson wellbeing, and much more. And I think one thing that might come up in the conversation also is that our Wellbeing Research Centre is now the production hub for the World Happiness Report, which comes out once a year, has been in publication since 2012. And for the past two years, we run the show and fundraise and produce it for the rest of the world to see the rankings of country populations.
So, that gives you a bit of a sense, a brief overview of my roles and the kinds of things I'm involved with. And then finally, I should mention, I'm also the co-founder of a charity, which is called the World Wellbeing Movement, and that is together with Lord Layard and so ably led by Sarah Cunningham, and has pulled together about 15 or so organisations, foundations and especially exemplary corporates, the likes of Unilever, Indeed, HSBC, to put some resources together to help put wellbeing metrics at the heart of both business and public policy. And so, we're doing a lot of work generally then, as you can tell, in the empirical wellbeing space.
[0:03:49] David Green: Well, it's great. I mean, and wellbeing is a topic that much of our audience is very interested in, mostly HR professionals, HR leaders. And I think what we're going to be talking about in this episode is actually the connection between wellbeing and firm financial performance, but also the societal impact of firms as well. So, really looking forward to diving into it. Obviously, we're going to be talking about some of the findings, no doubt, from the World Happiness Report that you mentioned. You've also co-authored a book with your colleague, George Ward, I think, who is at INSEAD, Why Workplace Wellbeing Matters: The Science Behind Employee Happiness and Organizational Performance. And for those watching on the video, you can see it behind Jan and you can see it there as well, next to my book as well on the shelf there.
I just want to also congratulate you on the World Happiness Report. I wonder, how do the insights from the World Happiness Report connect to what you're seeing in the workplace through your research, and why do you think now is such a critical time to focus on wellbeing at work?
[0:04:54] Jan-Emmanuel De Neve: It's a good question and it's interesting. And for me, it's been interesting as well over the past decade-and-a-half now that I've been working on wellbeing science, where I've worked both on population wellbeing, what makes individuals and populations happier, what explains differences, which is sort of the mission of the World Happiness Report. So, in that case, we're essentially trying to explain differences in life satisfaction. And as we move into the workplace, when I put on the business school professor hat and the book that you've kindly alluded to, Why Workplace Wellbeing Matters, that's very much then looking into job satisfaction, so the domain of work. But when we explain differences in job satisfaction or between job satisfaction aggregated across companies, or whether we're trying to explain life satisfaction aggregated at population level, it's a good question you're asking because we do find some parallels there.
I think the main one is essentially part of the beyond GDP movement. So, for example, in the context of population wellbeing, most people would think of GDP as a proxy for welfare/wellbeing of a population. What we find is that differences in GDP explain a bit, but by a long mile not as much as people expect it to explain, differences in population wellbeing. What does explain differences would then be health, healthy life expectancy, and especially, and this is the link I think with workplace, is social support, sense of belonging, social connections, trust, the social elements, the social capital in a society or in a community. And I think what's clear in the book as well, when we look at the drivers and the relative importance of these drivers, it's the same thing that gets echoed in the workplace. When you ask people, "What is most important for a workplace wellbeing, your satisfaction with your job?" what people will put on top is sort of, "Oh, fair compensation and flexibility".
But when you actually run the analysis to see what helps explain most differences between people's levels of job satisfaction, turns out it's the sense of belonging, having friends at work, feeling like you're being cared about, etc. And so, it's again the social capital on the work floor, the workspace, it turns out to be way more important than people think. And so, thank you for prodding me to this question, because it's something that between these two levels of analysis, we do find similarities in terms of what drives variation in both life satisfaction and job satisfaction. And it's typically the social capital, the social elements that come to the fore in those instances, and have been typically overlooked both in business and policy.
[0:07:26] David Green: Really interesting. And before we dig into the workplace wellbeing specifically, just for our listeners' interest and knowledge, which countries usually come out on the top of the World Happiness Report? I know it's usually the Nordic countries, I think, isn't it?
[0:07:40] Jan-Emmanuel De Neve: True. It's Finland again this year. They took over from Denmark a few years ago. Truth be told, it's quite tight up there at the very top. And so, it's interesting to actually give you the number. So, just to be clear, the World Happiness Report is not an index. It's literally, we report back the average satisfaction with life reported by a representative sample in all of those countries. And so, the Finns, to name the people at the very top, the average response to the question, "On a scale from 0 to 10, how satisfied are you with your life these days?" average response is close to 8, like 7.7, 7.8 on average. In the UK, it's closer to sort of 6.9 or 7, as is the case in the United States. So, a whole point lower really than the Nordic countries.
By the way, at the very bottom, let's sit tight, they'll have Afghanistan, which continues to slip. And the average response to the life satisfaction question on a 0 to 10 scale in Afghanistan is 1.5. So, imagine going into an organisation or community asking a representative sample, "On a scale from 0 to 10, how satisfied are you with your life?" and the average response is 1.5. So, if anybody responds 4 or 5, you already need a whole bunch of 0s to just bring it back down to 1.5. So, it gives you a sense that people in these places know very well, they're leading poor lives, poor, not just materially speaking, but psychologically speaking. So, that gives you a bit of a sense of the differences. So, we pick up huge differences in population wellbeing as measured through the self-reported measures of how people feel the quality of their lives is going. But that's our starting point.
So, I started the response to this question by noting that we're not an index. Even though we're a bunch of high-end academics from different institutions, we don't pretend to know how happy you are, David. So, of course, wellbeing is explained by multiple dimensions and everybody has factors explaining it from income to social support to healthy life expectancy to all kinds of things that matter in explaining differences between people. But ultimately, you have to ask people, "Well, are you satisfied with your life, are you happy?" and that's what we start with. And then, we use these other more objective indicators to try and explain why they feel the way they do. And while it seems obvious what I just said, it's actually quite a step up or step forward, I think, because most efforts... and by the way, this is relevant to business and HR leaders as well, because most HR leaders, just like most indices that try and move us beyond GDP, they sort of mix and match inputs and outputs into like a dashboard-type approach with 7 dimensions, 12 dimensions or 17 dimensions, like SDGs or many more KPIs, but there's sort of no conceptual structure or hierarchy.
But then also, if you're a business leader or an HR leader, ultimately, you have to make about decisions about where to spend your money, which is typically a limited budget, money doesn't fall from the tree. And so, say if a CEO gives you, David, say a CHRO, $1 million extra this year to spend on improving workplace wellbeing, where do you spend it on? And in a classic sort of dashboard approach with, say, ten indicators, there's no way, unless there's a conceptual hierarchy with an outcome, a KPI and then drivers, you would end up technically probably splitting your $1 million $100,000 on each one of your ten indicators. Whereas the reality is, in your organisation, some things will matter more than others. It could be fair pay or flexibility or belonging or trust or managerial support or learning. And so, that will change from individual, between populations, between organisations. And so, you need that conceptual hierarchy to have a criterion, I think, in the language of philosophy.
But in the language of econometrics, you need something on the left-hand side of the equation, the y, the dependent variable, that needs to be explained by the variables on the right-hand side of the equation, x1, x2, x3, x4, in order to be able to derive a weight, a coefficient, the relative importance of these drivers. And I think that's one of the things. So, in the book, we go on and on and on and on about making the case to take the next step and make a conceptual split between an outcome, like job satisfaction, and a driver, such as compensation, trust, learning, flexibility, the kind of actionable drivers that you should be working on, but that each feed into an overarching notion of how people feel at work, and that's what we're trying to drive. But if you don't make that split, then the puzzle doesn't come together.
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You've crowdsourced, correct me if I'm wrong, but I think you've crowdsourced insights from over 25 million workers through the partnership that you have with Indeed, which is impressive, to say the least. What has this scale of data taught you about how people truly feel at work, and what patterns or surprises emerged?
[0:13:57] Jan-Emmanuel De Neve: Yeah, thank you, David, for raising it. It's just been an extraordinary partnership with Indeed, starting in late 2019. And they always say they've got millions and millions and millions of people going to the website each month. And so, a handful of those get nudged into responding questions. And to be precise, the outcome indicators would be job satisfaction, we phrased it, but also, "Are you happy at work? Are you stressed at work? Do you find purpose and meaning in the work you're doing?" And these, we consider outcome questions. And then, we get answers and they get asked questions around a whole host of drivers, like the ones we mentioned, flexibility, pay, belonging, learning, managerial support, you name it. And we're nearing 30 million. It's just an extraordinary high-frequency source of data.
The main insights are, first and foremost, and this is good news for the data scientists, is that there's a lot of variation. And so, these questions are being asked on a 1-to-5 scale, and what we're finding out there is that there's organisations where the average work wellbeing score, which is the average of the four outcome indicators, is over 4 out of 5. And then, there's organisations where it's not even 2 out of 5. And then somewhat surprisingly, you find these distinctions even within industries. And even so, my favourite example of this is in the hamburger industry, because it's an industry where people kind of do the same thing, flipping burgers, selling them, serving, cleaning, etc. And yet, you'll find a very well-known hamburger chain doing 2 points lower on skill from 1 to 5 than in-and-out on the West coast of the US, which is sort of at the top of this. And so, this raises the all-important question, "Okay, so if we're finding huge differences, even within the industry, what explains these differences?" And it goes back to the point we just raised earlier, which is you kind of need then these driver structures to help you explain what is the relative importance of pay, of belonging, of flexibility policies, of trust, of learning and managerial support on the job, and explaining why in-and-out was so much better than some of the big names in the industry, for example, and we find these differences across every industry.
The other big finding is, actually maybe a sub-finding of what I just mentioned, is also there's so much data here for the large companies, the Walmarts, the McDonald's of this world. We've got tens of thousands of responses over time coming in every day, and it allows us to also slice and dice by region or even by warehouse or plant. And what we're finding, I think at this point, we probably have a better view on the wellbeing of workers at Walmart than Walmart does itself. And so, what's extraordinary here is that you find big differences even within an organisation. The other big point, David, and this is a bit sad, is now obviously this is the crowdsourced data through Indeed, so there's some selection bias, and we can talk about that if you want. But even controlling for some of that, we find that only a quarter of respondents, or just shy of a quarter, to be precise, is actually reporting 4 or 5 out of 5 on average. And so, that means that three-quarters of the workforce are sitting in a 1, 2, 3 out of 5.
So, that gives you a sense now, obviously that's an arbitrary cutoff, like people responding 4 or 5, but businesses like to have these percentiles, so it does give you a sense. And it aligns with some of the other research we're seeing by our friends at Gallup, engagement figures that are also pretty appalling. Typically, about 18% or 20% or 22% of people are actively engaged and a whole chunk is actively disengaged. And so, this mirrors or echoes this, but I think on a grander scale. And so, I think that's a call for, like, the alarm bells should be sounding. And especially in light of what we're going to be talking about later, where we find these links between how people feel at work and their productivity, the retention of this talent, and obviously also a good workplace, you become a more attractive employer in the first place, which also has its downstream consequences on P&L.
So, I think the fact that there's so much room for improvement on workplace wellbeing, clearly, the fact that it is possible to raise workplace wellbeing, and let nobody tell you it's not possible, I do think these are some of the key meta insights coming back from this massive, massive, world's largest study on workplace wellbeing, thanks to the partnership with Indeed. And that's probably a good starting point, I think, for more insights in our discussion now.
[0:18:30] David Green: So, when it comes to impact, you know, you've spent over a decade looking at this, what does your research show you about how workplace wellbeing links to business outcomes like productivity, recruitment, retention, even financial performance?
[0:18:44] Jan-Emmanuel De Neve: Well, you've got to make an important distinction there. So, in our research, we've looked at these different elements over time, and only after a while, it became clear to us how this is all coming together. And so, you should know that improving workplace wellbeing leads to different behaviours of your workers. And the most immediate one, the one that took us the longest to prove causally, is productivity. So, David, if you feel better this week, generally speaking you will be performing better this week in your organisation. And that's sort of a first major pathway to performance. And we can talk about how we got there. We worked with British Telecom, it took us ten years, we leveraged different weather around the call centres for these call centre place workers coming in as a natural experiment to sort of manipulate their moods one week to another, combine that with the architecture of these call centres and the exposure to light, to try and have a natural manipulation of their mood from one week to another to then see how that cascades onto their performance.
What we're finding there, and this is the headline result from the productivity piece, and it's really a lower-bound estimate, but it's sort of a 12% increase in hard weekly sales from a static deviation change in their wellbeing, how they felt from one week to another. That's lower bound. Then we have for more sort of tasks that require more social emotional intelligence, the impact was greater. So, one of the tasks that are more complex in nature, like a disgruntled customer calling in, and you have to try to retain your business, potentially even upsell them, that's when how you felt that week mattered a lot more than just taking calls that were just order-taking, where there was no social emotional intelligence. So, maybe an argument or something for later in the discussion is that in the future of work, what's going to be left for us humans to do is the kind of work that requires social emotional intelligence, elements of creativity. And that's precisely where how you feel today or this week matters more, obviously, than in the events of when it's just order-taking or something more mechanical, which machines will end up doing anyway. So, that's pathway to performance one, is sort of that productivity link.
The second pathway is essentially retention. Very intuitive, but, David, if you're feeling good at the company or better, you're more likely to stay. Companies with high workplace wellbeing, so where the average is around 4 out of 5, with reference to earlier, we find that those companies have a third less annual voluntary turnover. So, that's talent that's leaving that you didn't want to leave. And that's at a rate of 30% more than companies with high turnover. So, companies with 4 out of 5, on average, have 30% less annual voluntary turnover than companies with low workplace wellbeing. That's the second pathway.
Then, the third pathway is talent recruitment, attraction, and this is really exciting. I mean, our friends at Indeed, when the work wellbeing score was being rolled out, there was an A/B test. So, there was a staggered rollout, which allowed us, and George did all the work on this, but an extraordinary study, which became his MIT PhD thesis. And again, sit tight, but we were able to randomise, I think, 23 million job seekers. 23 million job seekers were randomised into either seeing work wellbeing scores for an organisation they were thinking about applying to, or not seeing it and just seeing the usual job description, the company name and the salary attached to it. Lo and behold, when people see more information about the non-pecuniary, the non-monetary elements of working there from the horse's mouth, so if there's sort of a, "Oh, this company is actually the top half, or the top quartile high workplace wellbeing", job seekers start responding to this, so their behaviour starts changing. And it's not massive, massive, but they were less inclined to apply to low workplace wellbeing companies.
So, the treatment group, the people who saw the usual job ad, job description, pay, but also the work wellbeing score, if it was low, they were less likely to apply. If it was top or top quintile or top quartile, they would be more likely to apply. And so, this is the third pathway to performance. These are just the benefits of wellbeing, they don't bring into the picture the cost side. And so, the only way to try and get both the benefits of improving workplace wellbeing as well as the costs, well, there's two ways. One is to literally look at intervention and say, like, "Okay, what will it cost me to improve workplace wellbeing through intervention X or Y, whether it's coaching or this training or mindfulness apps or wholesale change and compensation packages or benefits?" But then, you'll get the ROI on a specific intervention to improve workplace wellbeing.
So, what we were after is like, wait a second, we may not have the specific costs of an intervention and the attached wellbeing productivity gains. What we could do is look holistically at an organisation's P&L and, say, look at differences between the wellbeing of some company versus another company and see whether they do better financially in terms of profitability. While we may not understand what these companies did to improve workplace wellbeing, they must have done something to have an average score of 80 rather than say 70. And so, whatever they did to effectively raise workplace wellbeing, it must have cost them something or nothing, but they did things that have a positive impact on their wellbeing. Does it pay off?
[0:24:11] David Green: Yeah. Is it performance driving perceived wellbeing or is it the other way around, sort of thing? Yeah.
[0:24:16] Jan-Emmanuel De Neve: Precisely. And so, the beauty is, I think on the individual pathways to performance, the productivity retention recruitment, we now have causal evidence. We've been able to disentangle the dynamic directions running from performance onto wellbeing, and wellbeing to performance. So, there we have causal evidence. Nobody can attack us on that front. But only on the business case, the largest of performers, it's hard to manipulate. You can't do experiments and put some companies into wellbeing intervention and others not generally and then see what happens. So, that's not quite possible. So, the best we can do is move to longitudinal evidence, where we see historical levels of workplace wellbeing, say, how come the wellbeing of companies in say 2021 or 2022, is that predictive financial app performance in '23, '24, '25? And so, that's the kind of stuff that we set out to do, and that's what we're finding. So, we're using, for example, the work wellbeing scores of the big companies that are listed in '21, '22, and you sort of see that that continues to predict financial performance of the profitability coming years out. And that's one study.
Then, in line with that, the final study, and sorry, I'm on a bit of a...
[0:25:34] David Green: No, this is good stuff. And I know the people analytics people listening will be loving it.
[0:25:39] Jan-Emmanuel De Neve: Oh, that's excellent. Thank you, David. But I'll finish on this, which is a study that got so much attention, the longitudinal aspect is the stock market study. So, now that we've got comparable data for all the big, listed companies in the US, I begged the question, obviously for us, but three years ago, "Wait a second. If we believe in this business case, why not invest on this? Let's see if that also pays off in future stock market performance". And so, on 1 January 2021, we invested $1,000 in the top 100, based off the 2020 data, historical data, and then go to bed for a whole year, wake up on 1 January 2022 and see how we did. And then we rejigged the portfolio a little bit. And typically, there's about, sort of out of the top 100, there's typically about 20 companies that sort of drop out of the top 100 because of the new data. And then, they get replenished and there's a bit of new blood coming into the top 100. So, there's a bit of change, but not fully, of course. Some companies keep doing very well for their people, and people tell us so.
So, what we're finding is, both in the bear market, in the bull market, and the volatility, overall, right now, our portfolio of just investing on best places to work from the horse's mouth through this crowdsource survey, and across all companies, we're at, I think, $1,600, whereas the S&P is at $1,500 and NASDAQ is at $1,400-something. So, there's meaningful, meaningful predictive power, but outperforming, because obviously good companies will have been already highly valued, but still there's something extra in there. The work wellbeing pays dividends over time that are not fully captured nor anticipated by the stock market, and that's exciting.
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Two-part question this. Firstly, do you think wellbeing is still treated as an HR nice-to-have? And then maybe, as part of that, why do so few, or relatively so few CEOs invest more in employee happiness than wellbeing initiatives? Just your thoughts really.
[0:29:02] Jan-Emmanuel De Neve: Oh no, it's a very good question, one that we go on and on at length in the book, so thank you for raising it. Yes, so in a way back to the very start of our conversation, once you make that conceptual split between measuring how people feel at work generally through, say, job satisfaction, and then look at what might drive it, then you quite quickly get into thinking more holistically around workplace wellbeing, and not just sort of individualistic interventions typically associated with HR wellness perhaps, packages such as mindfulness apps, like proposing yoga or health checks and these kind of things, which are very individual-focused. But what you find when you do this driver analysis is that the relative importance of the more structural, environmental, social aspects actually weigh in more into how people feel at work, and those that drive their performance and productivity, what have you, as do these individualistic elements. And I think we're moving away.
So, our friend, Andrew Gibbons, who's the Global Head for Wellbeing at HSBC, who's absolutely brilliant, he's called his coin this notion, "Okay, we're moving from wellbeing 1.0, playing Whac-A-Mole with wellness interventions, so, 'We want this, we want that', and you sort of throw stuff at people and see what sticks, to wellbeing 2.0, which is more evidence-based, trying to actually get into the data of what actually drives wellbeing more structurally, and trying to put your money where it will make real difference". But that does mean, this goes to your question, it means that the HR function is going to have to play more of a bridge-building role, because a lot of the more structural interventions that will really move the needle of workplace wellbeing will have to do with work culture, ways of working, bureaucratic elements, red tape; people get frustrated, they're not at their productive best because of XYZ policies; pay, which is not necessarily within the domain of HR, but CFO suite; culture and sense of belonging. And it comes from right from the top, the CEO. And so, there's a lot of stuff that actually helps explain how people feel at work that is outside the scope or the remit of your traditional HR function.
So, I think you've got this notion of Chief HR Officers become Chief People Officers. So, you see some companies have adopted that language. I think that's a good move. It's also indicative of the fact that they are then speaking on behalf of people. And then, they need to work with the CFO, the CEO, Chief Operations Officer to talk about ways of working, making it easier on people to do what they need to do and feel productive, bullying culture, belonging, pay. And so, there is a move, I think… I shouldn't pick on wellness. It's more, like, beyond the individual. So, at the moment, people think, "Oh, wellbeing is you, David, and I'm going to try and improve your wellbeing by throwing yoga and mindfulness apps at you". But they forego the fact that a big chunk and the co-responsibility of how you're feeling at work is the work environment. And that also explains how you're feeling. It's not just making you more resilient or happy, but dealing with...
I mean, our colleague, Sarah Cunningham, who runs the World Wellbeing Movement, she was doing a little sketch on stage at the World Happiness Summit where she was saying, "Oh, so we're going to get a yoga offer between two and three this afternoon". And at the same time, there's all these slacks and pings and emails coming in where she was overworked. And so, the yoga was actually counterproductive because it had her fall behind and work later in the evening. And so, some of these things, these ways of working, the stress, the burnouts are not going to be addressed by tagging along mindfulness apps or yoga. And these things are not bad; by all means, do. But some of the core roots of why we're unhappy at work has come through the structure of work to begin with and the ways of working and the work itself.
[0:33:04] David Green: Another big area for HR and business is the future of work. We can't talk about the future of work without talking about technology, especially AI. What role do you see technology and AI playing in shaping the quality of work; and how can we ensure it's used to enhance, rather than erode wellbeing?
[0:33:25] Jan-Emmanuel De Neve: Well, God, how much time do we have?! No, but in sum, first of all, I'm very pleased. You just noted, how can we leverage these new technologies to improve the quality of work? That is already a massive step change. The fact that you raised the question the way you did is huge, because most people will be, generally, especially in the context of policy or economics, they'll be talking about, essentially the supply of work, quantity, what jobs, how many jobs will be left, who's going to be kicked out of the organisation, and so an element of quantity of work. And as we're being reminded more often than not, is that with every industrial cycle, with major new technology coming in, what is it now, the fourth and fifth Industrial Revolution, there's always been a lot of transition. Some jobs go and others get created. And so, maybe this time is different through AI, I don't know.
But a priori, I think we can probably best rely on the fact that yes, it'll be difficult. Some jobs will go, transition, reskilling, and then hopefully better jobs will come into play. A priori, the automation, new technology, the AI bit is taking up tasks and jobs that are associated with lower job satisfaction, as was the case in previous industrial revolutions. And so, initially, we're optimistic, because it means that there will be a period of transition, there needs to be a lot of help for those that are needing to transition. But the new jobs ought to be better than the old jobs. There are things that do look different this time around. And AI and these algorithmic platforms becoming your manager, to some extent, is something that's semi-worrying. I know the talk these days is, we've got our Copilots and our AI agents, and we'll all become CEOs or managers of AI agents, and that seems exciting. That seems to fit with the positive case.
But I'm also seeing signals that it's not just AI agents that assist us, but in many cases, it's the AI agents managing us instead. And so, maybe not at every level of the organisation, hopefully there'll still be CEOs and C-suite folk bossing AI agents around. But I do see a lot of instances, and the most obviously obvious case are the gig workers, who've been, I think, sort of the canary in the coal mine here, potentially. Because if you're an Uber driver or a Deliveroo courier moving food around, you don't have a line manager. Your line manager is an algorithmic platform. You're not seeing other people. You have no colleagues, you have no boss, no nothing. It is algorithmic platforms suggesting where you go, what to do, and whether are you doing a good job or not. And so, that's a bellwether, we ought to be mindful of that.
Now, in the book, we consider all of this and we say it's hard to predict the future. But what we could do is look at the drivers of workplace wellbeing and how is automation AI impacting each one of these drivers. And what you're finding is, in essence, some drivers seem to be positively impacted, for example, flexibility, autonomy, agency seem to be. Agency perhaps has flexibility, autonomy, there's more opportunities for job crafting. Working from home is a benefit for the white-collar folk, typically, but thanks to technology. But then, on the flipside, you've got that sense of belonging, which has turned out to be so important to social elements. Those, however, are being put under pressure, especially with algorithmic platforms becoming your manager or your coworkers, or Microsoft Copilot or ChatGPT. And so, that becomes more problematic from a human element, from a wellbeing, from a quality-of-work aspect. And then pay is also interesting.
Pay obviously is important to workplace wellbeing. And here, we do know from economic research on these industrial revolutions is that typically, there's gains from productivity, otherwise people wouldn't be doing these technological changes; but the gains from productivity tend to go to a subset of the workers, in addition to shareholders, and those companies that run these technological advancements. And so, our fear is that on one of the drivers of workplace wellbeing, pay as well, like through flexibility, positive belonging, big question. Pay is also questionable, because some will benefit, but possibly a majority will not benefit from this. We'll have to work harder for the same pay, or potentially be in competition with AI and machines, which means that they're going to be having less leverage and bargaining power in driving positive change in their salaries.
So, we're foreseeing, and I think all HR leaders listening to this, this is going to hit home, because as you're introducing these productivity, efficiency enhancing tools, the C-suite is very excited about the potential of cost-cutting. If we, thanks to these productivity, efficiency enhancing tools can do more in the same amount of time, that means that teams can be reduced. So, if your team, David, now is, say ten people strong, I'm willing to put my hand in the fire, in five years, it will be eight or six people strong and you'll be as productive.
From a political economy perspective, so now from HR to economics to political economy, political economy is about how to distribute these gains through productivity. Who's going to gain from this? And it's definitely going to be the OpenAIs of this world, the Microsofts, the Metas, the Googles, the xAIs. I think the employers, the shareholders, are going to benefit massively, because there'll be huge efficiency gains, productivity gains. I think the C-suite is going to benefit, because they'll have to manage all of this hybrid workforce. And I think the very talented pilots who are really managing this and are good and working with AI are going to benefit, they'll see their salary increase. I think there's a big chunk of the workforce who's not necessarily going to benefit. And then the question is, will we be able to redistribute some of these gains for productivity back to the workforce who may not stand to benefit, or a big chunk of the workforce who may not stand to benefit from these gains? And that is through taxation or through labour unions pushing for decent wages and living wages for people who do not stand to benefit, or through Universal Basic Income, or these kinds of ways.
Then, I'll finish on this. I'm not fully confident that society will be able to fully compensate the losers in this question, and take from the winners enough to compensate the losers through taxation, UBI, etc. And so, my idea here is, how about if we cannot compensate or redistribute the productivity gains in terms of money, can we redistribute a little bit in terms of time?
[0:40:24] David Green: And maybe we can realise the prediction of John Maynard Keynes, from the early part of the 20th Century, when I think he said something along the lines of, and maybe I'm misquoting him, something along the lines of, "By the end of the century, we'll all be working a 15-hour week". I don't think we'll get there, but I think, yeah, maybe you're right, maybe that's the wellbeing angle of the future of work. Jan, we need to get to the question of the series, and then I'm going to ask you one last question about the book. So, I'm going to ask you to look into your crystal ball, and it's probably a little bit of what we've been talking about, really. What's the single biggest shift in the future of work you foresee by 2030, and how do you think HR can lead it?
[0:41:07] Jan-Emmanuel De Neve: I think 2030, the biggest thing for HR is to properly manage the rollout of these new technologies, like AI agents. It's like, don't just impose it. The reason being, and this is sort of a nice distillation of what we've been talking about, yes, it might be productivity enhancing, but if it takes out a sense of belonging, it's going to hurt people's wellbeing, which is going to reduce their productivity and raise mental health concerns. And so, it may backfire if you push it through too hard just on the sake of efficiency. So, yes, CEOs and CFOs will want you to get this happening ASAP, these AI enhancing tools and Copilot use, but make sure you roll it out in a way that is in partnership with people so they feel good about this. Because if they don't feel good about this, it's going to backfire in spectacular ways, and that will undo the productivity gains that you're hoping for.
[0:42:05] David Green: Well, Jan, I think we could talk about this all day, but although our listeners like long episodes, I think probably we have to get to a limit. So, one thing about the book. If people could have one big idea to take away from it, what would you want it to be?
[0:42:20] Jan-Emmanuel De Neve: The meta idea of course is, "You take care of people, they'll take care of business". That's the meta idea that comes through. And I know, as well, a lot of people say, but obviously the evidence now is irrefutable and is right there. And the second idea would be, "Measure what you treasure, but measure it properly". Make that conceptual distinction between measuring how people feel and then what drives it, and don't just mix and match things and then it becomes a potpourri of things that becomes ineffective.
[0:42:47] David Green: Jan, thank you so much for your time. It's been a real pleasure and I've learned a lot from our conversation. Before we part ways for the day, could you let listeners know how they can follow all the great work you're doing at the Wellbeing Research Centre, find out more about the book, follow you on social media?
[0:43:03] Jan-Emmanuel De Neve: Oh, well, thank you. I've got a decent LinkedIn following, so look me up on there. The book is called Why Workplace Wellbeing Matters, published earlier this year with Harvard Business Press. It's doing well and really, really brings all of our research together in an accessible way. The Wellbeing Research Centre obviously has a newsletter, where there's seminars and much more. The World Wellbeing Movement has the act, we didn't talk about this, but it's very important to note the World Wellbeing Movement has what we call a playbook for wellbeing intervention. So, if you're inspired by everything in the conversation with David just now, and you want to know what actually works to effectively improve workplace wellbeing, look no further than the World Wellbeing Movement's playbook, where for every driver of workplace wellbeing, we've listed the best evidence-based interventions. And then, check out the World Happiness Report.
[0:43:53] David Green: Lots of resources for people to look at. Jan, thank you so much for being a guest on the Digital HR Leaders podcast.
[0:44:00] Jan-Emmanuel De Neve: Thank you, David.
[0:44:02] David Green: If there's one takeaway from today's discussion, it's this. When people feel better at work, they perform better. It's as simple and as powerful as that. So, a big thank you again to Jan for all the amazing work he is doing in helping to reshape the way leaders think about wellbeing. And as always, thank you for tuning in each week and listening to the show. If today's episode sparked ideas, questions or even a shift in perspective, don't forget to subscribe, rate, and share the episode with a colleague or friend. It really helps us reach more forward-thinking leaders like you. To connect with us at Insight222, follow us on LinkedIn, check out our website at insight222.com, and don't forget to sign up for our weekly newsletter at myHRfuture.com. That's all for now. Thank you for tuning in and we'll be back next week with another episode of the Digital HR Leaders podcast. Until then, take care and stay well.