Cracking the Code for Employee Happiness and Retention
New research reveals how business leaders can build more inclusive workplaces that drive genuine business value.
Employee stress is at an all-time high globally, and only 21% percent of workers feel engaged at work, according to a recent Gallup report. Even more worrying, 2022 research from Future Forum and Boston Consulting Group found that 57% of desk-based workers are likely to look for a new job in the coming year, and 43% of “deskless workers”—those who need to be physically present to do their jobs—are similarly at risk of quitting.
Boston Consulting Group, however, has clear direction and tangible solutions for business leaders who are focused on attracting and retaining talent. BCG’s BLISS Index, which is based on survey responses from 27,800 employees across 16 countries, has identified inclusion as a critical factor in workplace happiness, with a meaningful impact on retention. When workers feel included, the index shows, their happiness and overall well-being improve and retention rates increase.
BLISS stands for Bias-free, Leadership, Inclusion, Safety and Support.
Why Inclusion Matters
BCG’s BLISS Index quantifies the experience of inclusion with a single number score ranging from 1-100, with higher scores indicating greater inclusion.
So, what happens when a company increases BCG’s BLISS Index score from 55 (10% below average) to 75 (10% above average)?
Three-quarters of employees at a company with a BLISS Index score of 75 feel happy (versus just one-quarter of employees at a company with a BLISS Index score of 55).
The number of employees at risk of leaving is cut in half.
Source: BCG's BLISS Index
Gabrielle Novacek, a Managing Director and Partner at BCG who has been analyzing workplace trends and culture for more than a decade, says that BCG’s BLISS Index provides compelling analytical proof of the business value of employee inclusion.
That’s an important step forward for Diversity, Equity and Inclusion (DEI) efforts. While diversity and equity are relatively straightforward to understand and to measure through representation, retention, promotion and compensation metrics, inclusion has been more elusive.
Measuring the Impact of Inclusion Explore the Data
See how happiness rates increase and retention risk declines as BLISS Index scores improve.
- % of employees happy
- % of employees at risk of quitting
BCG's BLISS Index Score
There’s an undeniable connection between inclusion and retention. If people feel included, they will be happy, they will feel a greater sense of well-being and they will stick around. This research has clear implications that DEI programs actually deliver in shaping meaningful outcomes for employees.
Gabrielle Novacek Managing Director and Partner, BCG
How Included Do Employees Really Feel?
Every person is comprised of a multitude of identities. For example, one employee might be a woman who grew up in a low-income home and is a caretaker for an elderly parent. The visible trait in the workplace may be gender, but the latter traits are unseen factors that could impact her feeling of inclusion.
BCG’s BLISS Index uses an employee-centric approach to understand what truly drives feelings of inclusion and to identify correlation patterns in survey responses. For example, if an employee feels valued at work, they also are very likely to feel like they belong.
By focusing on the data, leaders can strip away their assumptions and see how their employees really feel at work. Based on benchmarks from the 27,800 workers surveyed by BCG, the survey results give a fuller view of whether employees feel included, and how these feelings vary significantly based on certain factors or traits.
Every one of us is made up of a multiplicity of identities, and those identities coming together create a unique set of individual circumstances, needs and contexts. BCG’s BLISS Index reveals how complex these factors can be when they interact with each other.
Gabrielle Novacek Managing Director and Partner, BCG
Senior leaders and direct managers are the primary drivers of inclusion
Many factors affect employee happiness and retention, from family circumstances to relocation and career plans—and companies can’t necessarily change them. However, inclusion is a key component in driving positive outcomes for employees, and senior leadership and direct managers have a profound influence on inclusion.
What stands out in BCG’s BLISS Index isn’t just the importance of inclusion, but also the central role that senior leadership and direct managers play in employees feeling included, through the actions they take, the messages they communicate and the cultures they nurture.
BCG’s BLISS Index identifies six core elements that drive whether employees feel included at work. Of these factors, BCG has determined that the most influential—by a large margin—are senior leadership behavior and direct manager behavior, which together account for two-thirds of their employees’ feeling of inclusion.
What Drives Inclusion? Explore the Data
The presence or absence of six core elements determines whether workers feel included. These elements are Senior Leadership Behavior, Direct Manager Behavior, Respect, Psychological Safety, Equality, and Discrimination. The following chart shows how all these factors impact the work experience and, ultimately, employee retention.
Commitment to DEI; Diversity in top management
The centrality of the role of senior leaders and, in turn, direct managers, is astonishing in how powerful it really is. As leaders look at the outcomes of this work, they should feel a profound call to action that they have a significant role to play in making progress on inclusion.”
Gabrielle Novacek Managing Director and Partner, BCG
Where can senior leaders make the biggest difference?
The profiles in BCG’s BLISS Index show that workers with different identities and support needs can have vastly different experiences in the workplace. A critical factor in feeling included is whether employees feel they can be their authentic selves at work. The following profiles illustrate how feelings of inclusion differ when employees feel they need to hide important elements of their true identities at work, versus when employees feel comfortable sharing these important elements of their identities with their coworkers and managers. For senior leadership and direct managers, these differences in BLISS Index scores should underscore the importance of creating an environment where workers feel free to be their authentic selves.
LGBTQ+
- LGBTQ+
- Not out to all coworkers
BCG's BLISS Score:
60.2- LGBTQ+
- Out to all coworkers
BCG's BLISS Score:
66.6Unseen Disability
- Unseen Disability
- Not Disclosed
BCG's BLISS Score:
60.2- Unseen Disability
- Disclosed
BCG's BLISS Score:
63.0Authentic Selves
- Does Not Feel Free to Be Authentic Self at Work
BCG's BLISS Score:
48.9- Feels Free to Be Authentic Self at Work
BCG's BLISS Score:
76.1Business leaders can have a measurable impact on increasing feelings of inclusion through mentorship and investment in DEI and employee-centric programs.
For example, we see that BCG’s BLISS Index scores for women of color increase when they have a mentor in the workplace; leaders trying to improve inclusion and reduce retention risk should lean into mentorship programs that build authentic relationships. Even greater inclusion gains are possible with comprehensive DEI and employee-centric programming, including mentorship, 360-degree feedback, career growth opportunities and benefit packages. Companies that layer a suite of programs to improve the employee experience achieve the biggest uptick in inclusion outcomes.
Impact of Mentorship
- Woman
- Racial Minority
- No Mentor or Sponsor
BCG's BLISS Score:
57.5- Woman
- Racial Minority
- Has a Mentor or Sponsor
BCG's BLISS Score:
69.0- Man
- Low Socioeconomic Childhood Background
- No Mentor or Sponsor
BCG's BLISS Score:
58.0- Man
- Low Socioeconomic Childhood Background
- Has a Mentor or Sponsor
BCG's BLISS Score:
67.2Impact of Investment in DEI and Employee-Centric Programs
- Company Lightly Invests in DEI Programs (0-15 Programs Exist)
BCG's BLISS Score:
57.5- Company Moderately Invests in DEI Programs (16-29 Programs Exist)
BCG's BLISS Score:
67.8- Company Heavily Invests in DEI Programs (30+ Programs Exist)
BCG's BLISS Score:
75.4Mentorship has the potential to impact a broad range of profiles, and in this world of scarce resources, it doesn’t necessarily need to be expensive. Mentorship is more about: Does somebody care about me, connect with me and engage with me on a regular basis inside the organization?”
Gabrielle Novacek Managing Director and Partner, BCG
Senior leadership can’t afford to ignore inclusion—in any country or industry
BCG’s BLISS Index demonstrates that inclusion affects employee retention in all industries and in all countries surveyed. No business, in any region or sector, can afford to ignore inclusion. Explore the results below to see how employees in different countries and industries feel about inclusion. (Data not available by category in all countries.)
- PlaceHolder
% of employees at risk of leaving their company
> Industry average ≦ Industry average
How to support employee inclusion in the long run
By leveraging analytical statistical techniques to examine how individual experiences and different levels of support can impact career trajectories, BCG’s BLISS Index has revealed some universal truths about the steps that business leaders can take to create a stronger and more engaged workforce.
In short, when workers feel included, they stick around. This simple truth is a call to action for leaders to focus attention and investment on improving the day-to-day workplace environment and on interactions that shape inclusion and drive meaningful outcomes for employers and employees.
Inclusion has a major impact on motivation, productivity, and what people are willing to bring to the job each day. When done right, inclusion positively changes the workplace experience, and not just for minorities and marginalized groups; inclusive cultures benefit all employees.
Leaders have a unique opportunity to drive change and create a workplace culture where everyone feels valued and supported. What BCG’s BLISS Index has shown us is that investing in specific workplace factors through DEI will make all the difference.
Gabrielle Novacek Managing Director and Partner, BCG
