The Dawn of the Great Workplace Era

Much that we hear about the workplace these days is gloomy.

“Why You Hate Work” read the headline of a 2014 New York Times article about the way many employees toil to the point of exhaustion at jobs with little appreciation or meaning but plenty of distractions. Also last year, The Conference Board reported that — for the eighth straight year — less than half of U.S. workers were satisfied with their jobs. And Gallup Inc.’s “2013 State of the Global Workplace” report showed that just 13 percent of employees were engaged at work.

But quietly, amid all the overcast news, a sunnier story is taking shape. A variety of forces are pushing the work world in a better direction. These factors include the rise of balance-minded, meaning-seeking millennials, increased transparency into organizations, and mounting evidence that high-trust cultures lead to better business results. Thanks to these and other positive trends, we’re at the beginning of what my organization, the Great Place to Work Institute, calls the Great Workplace Era. In it, all people can expect to work for an organization where they trust their leaders, enjoy their colleagues and take pride in what they do.

The Great Workplace Era is in keeping with the rise of business sustainability, the emergence of the “purpose economy” and the attention to reciprocity’s role in success — captured by Adam Grant’s best-selling book “Give and Take.” What’s more, signs of this new era’s dawning can be found in many sectors of the economy. Even the hardheaded finance sector is finding a heart, in part because blending head and heart pays off.

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Former Citigroup Inc. executive Sallie Krawcheck is now calling on Wall Street to embrace workplace diversity, noting that women are more client-focused. “The financial industry, despite its bad reputation, can do a lot of good in the world. But it has defined itself about money and not about meaning at all,” she said in a recent issue of Fast Company. That issue of the magazine focused on the power of mission-driven companies, and being a great workplace is central to such visionary firms as Google Inc., St. Jude Children’s Research Hospital and Whole Foods Market Inc. 

With companies like these at the vanguard, the Great Workplace Era is taking shape. This happier age, it should be noted, has a hard edge: low-road employers who fail to build a healthy workplace culture will find it increasingly hard to stay in business. But the overall arc is encouraging. Increasingly, workplaces will make the world better by making people’s lives better.

Names and Numbers

To be sure, there are countervailing forces to the Great Workplace Era. Shortsighted investors can oust leaders who push too hard to invest in their people. Economic slowdowns can make it hard to retain the long-term vision that’s needed to build a great workplace. Political and religious conflicts around the world can destroy workplaces and diminish trust in societies overall.

But we see the positive trends outweighing the negatives. And we’re not the only ones with a hopeful assessment. Prominent business leaders at companies such as Daimler Financial Services,  Microsoft Corp. and NetApp agree that a Great Workplace Era is at hand. Among them is Microsoft CEO Satya Nadella. “More than ever before, today’s top talent is not just looking for great work, they’re looking to create a great life and a better world — and their work is part of how they achieve that,” Nadella told us.

Our own data at the Great Place to Work Institute backs up what Nadella and others observe. Our research shows that the best workplaces around the world are getting better. That is, levels of trust, camaraderie and pride are increasing at the best workplaces. In a solid majority of the 50 or so countries where we operate, we see rising scores on the Trust Index, our 58-question employee survey tool that measures the extent to which employees trust their leaders, take pride in their job and enjoy their colleagues. In addition to improvements within countries, we have documented increased improvements at the companies that make up Great Place to Work’s annual World’s Best Multinational Workplaceslist. See “Global Trust” chart, p. 34.

Seven Reasons Trust, Pride and Camaraderie Are on the Rise

We see a combination of factors behind improvements at the best workplaces around the globe:

1. Awareness:There is increased awareness among company leaders globally of the importance of a great, high-trust workplace culture. Trust is top of mind for today’s executives worldwide, according to a 2013 PricewaterhouseCoopers report, which surveyed 1,330 CEOs in 68 countries.

This awareness is taking root in India, among other places. It can be seen in an emerging approach to management that some scholars have called the “India Way.” That “way” includes investing in talent and building a stirring culture, along with creating a strong sense of public mission and national purpose.

2. Evidence:Evidence is mounting that great workplaces lead to better business results. For example, a paper published last year by the European Corporate Governance Institute studied data from 14 countries and concluded that higher levels of employee satisfaction corresponded to stock market outperformance in countries with high levels of labor market flexibility, such as the United States and the United Kingdom.

That research is part of a growing body of evidence that better workplaces produce better results, including improved financial outcomes and increased employee retention. For example, publicly traded companies on the U.S. Best Companies to Work For list have nearly doubled the performance of the stock market overall from 1997 to 2013. And a 2013 report from research and consulting firm Interaction Associates found that “companies adept at practices that reinforce strong leadership, trust and collaboration enjoy better financial performance.”

3. Millennials: The millennial generation is demanding better workplaces. Around the world, the cohort of people in their mid-30s and younger is pushing employers to pay more attention to work-life harmony and social responsibility. A 2013 study from employer branding company Universum found that the top career goal for U.S. undergraduates is work-life balance, followed by job security and then “to feel that I am serving a greater good.”

4. Well-being: The emergence of a “well-being” movement is nudging organizations to improve their cultures. Levels of stress have risen at organizations globally as companies have asked employees to do more with less, and the growing use of mobile devices has led employees to feel pressure to be “always on.” Stanford University professor Jeffrey Pfeffer has estimated that there are more than 120,000 excess deaths annually in the U.S. alone because of unhealthy work environments, which include features such as little control over one’s work, conflicts between work and family, and job insecurity.

Partly in response to stressful work climates, people have placed more value on physical and mental well-being. Great workplaces around the world are embracing this trend. Among the three Trust Index scores that have risen most among the World’s Best Multinational Workplaces is this statement: “People are encouraged to balance their work life and their personal life.”

5. Momentum:Once an organization develops a positive workplace culture, that culture tends to continue getting better. This positive, upward spiral owes both to management and employees. Managers make improvements to the work environment based on measurements of their culture. And employees of great workplaces take increased ownership of their cultures. They participate to advance the organization and feel greater appreciation for their work setting.

6. Innovation:Innovation has come to be the lifeblood for many businesses, especially those operating in global, competitive markets. And innovation success depends crucially on high levels of trust, pride and camaraderie in an organization. Individual employees are more likely to risk sharing novel ideas in a climate in which they feel a measure of security and are proud of what they do. In addition, collaboration, which is increasingly central to effective innovation efforts, is fueled by friendships among co-workers.

7. Transparency:Technologies such as social media and mobile, personal devices that can easily record images and audio are providing unprecedented transparency into organizations. So is the pressure put on organizations to disclose information related to labor relations and environmental impact. The result is that the sunlight of transparency is exposing and punishing less-than-great organizations and rewarding good ones. The best workplaces around the globe are adapting to and taking advantage of this trend. Another of the three Trust Index scores that have risen most among the World’s Best Multinational Workplaces is this statement: “Management keeps me informed about important issues and changes.”

The Great Workplace Era

The factors above aren’t just pushing the best workplaces to get better — they are affecting all companies. That’s why we believe we are at the beginning of the Great Workplace Era, which represents a more harmonious relationship between shareholders and stakeholders, between managers and employees. But this concept is not just a feel-good dream. It is a hardheaded reality.

Three Keys to a Great Workplace

1. Trust

Trust is developed over time as employees experience leadership through a manager who:

• Promotes two-way communication.
• Demonstrates competency.
• Maintains a clear vision.
• Matches actions to words.
• Treats employees with respect and fairness.

2. Pride

In order for employees to feel proud of their work, they must:

• Believe that the work they do is meaningful.
• Feel they are making a difference in their organization.
• Take pleasure in team accomplishments.
• Believe their organization positively affects their community.

3. Camaraderie

Employees need to feel a real connection with co-workers.
This is accomplished when they can:

• Be themselves.
• Experience a sense of fun.
• Engage with friendly co-workers.
• Experience a sense of community or family.

—Ed Frauenheim

Companies that embrace the Great Workplace Era will be the ones with the greatest trust in their cultures. These organizations will not only be doing the right thing by employees but also positioning themselves to win in the marketplace. They will see higher engagement scores, which have been linked to better business outcomes. They will see a variety of business benefits, ranging from recruiting advantages to more effective innovation to higher revenue to better stock performance.

We hear lots of excuses for why an organization can’t become a great workplace,but our research suggests that these common objections can be overcome. 

Among the key first steps in the journey to greatness is for leaders to commit themselves to being trustworthy: to living up to their word, to treating staffers with respect and to being even-handed with people. By demonstrating credibility, respect and fairness, leaders will do right by their employees, managers and shareholders — and get on the right side of history.

Another CEO who sees the Great Workplace Era on the horizon is Terri Kelly of W.L. Gore & Associates, the maker of Gore-Tex fabric and many other high-tech products. “Our founders explicitly believed that our company was created to make the world a better place, not only by building great products that enhance lives, but by building an organization that makes our associates’ lives and communities better,” she said.

Plenty of organizations are not great workplaces, but we are confident the workplace weather is changing; powerful forces are propelling all companies to become better workplaces.