Unhappy Employees Are Costing You: 4 Lessons From Denmark

Unhappy employees cost U.S. companies as much as $550 billion every year. That’s roughly the equivalent of the valuation of Google or Apple, the world’s two most valuable companies.

Entrepreneurs have been grappling with unhappy employees for years, with U.S. employee engagement hovering at or below 30 percent since at least the year 2000, and it’s taking its toll on American businesses. Compared to their happier peers, dissatisfied employees make 37 percent fewer sales, are 31 percent less productive, have 51 percent more turnover and are 300 percent less innovative.

Companies with satisfied staff members outperform those with dissatisfied workers by up to 202 percent.

In short, unhappy employees are bad for business, and American entrepreneurs don’t seem to know what to do. But maybe it’s time they look overseas for ideas: According to international happiness studies, Denmark ranks first in happiness, while the United States doesn’t even make the top 10. If you want your business to join the ranks of those happier Europeans, take some cues from the Danes. Here are some of their secrets:

1. Make time off mandatory.

Denmark this year surpassed Switzerland as the world’s happiest country. And maybe we need to look to the Scandanavian nation as a role model, because the differences between Denmark and the United States couldn’t be more pronounced.

For starters, Americans work an average of 1,789 hours per year — nearly 200 hours more than the Danes, according to the Organisation for Economic Co-operation and Development. This occurs, in part, because Danish law provides employees with five weeks of paid time off per year, while our country stands alone among the advanced economies as the “no-vacation nation.”

So, if you run a U.S. company, fight burnout and boost productivity: Implement mandatory vacation policies to show employees it’s okay to take time to relax away from the office. Couple this with seminars on physical and emotional wellness to remind employees that time off is an important component of their well-being.

2. Seek emotionally intelligent managers.

Here’s a little secret:The best managers aren’t necessarily the ones who launch disruptive products or prioritize profits over all else. They’re conscientious people who appreciate their teams and recognize that workers are emotional beings.

While CEOs tend to have the lowest emotional intelligence (EQ) scores in the workplace, the most successful leaders buck that trend. Sven Kristensen, CEO of Wuerth Denmark, built a multinational wholesale organization that incorporates EQ training into its leadership program. Back on our side of the Atlantic, Google CEO Sundar Pichai has been lauded for his own EQ and for promoting those who share that quality.

When looking for management material, then, tap team members who understand how to express their emotions and encourage others to do so, too. Create employee management forums to help team members hash out conflicts, speak their minds and find common ground.

3. Hire as if you’re choosing the next CEO.

When I recruit new employees, I look for people who could one day become CEO. They need to be creative thinkers, adept project managers and autonomous workers. Even if they never land that top spot, they’ll elevate the team, with self-reliance and constant experimentation.

One big reason Danish workers are happier is because they enjoy much greater freedom and autonomy in their jobs than Americans, leading those Danish workers to feel empowered and valued in their roles. American workplaces, by contrast, rank the lowest in the world for “power distance” between bosses and workers, leading team members to feel unappreciated and distrusted.

To create a happier, more engaged team, hire independent thinkers and let them rise to the challenges they create for themselves.

4. Fight job lock.

Nobody wants to feel stuck in a job, and studies show that opportunities for advancement factor heavily into worker happiness.

One way Denmark combats job lock is by offering unemployed individuals 90 percent of their former salary for two years. This empowers Danish employees to speak up about roles they’re in that they’re dissatisfied with; and it encourages Danish employers to place employees in roles where they’ll thrive.

Nurture employees who have outgrown their current positions by promoting them or assigning them to projects of their choosing. Establish tuition reimbursement programs to encourage team members to pursue education and open doors for themselves, and allow team members in good standing to choose their responsibilities.

Employee unhappiness has reached epidemic proportions in the United States and has hamstrung entrepreneurs’ success. To build a stronger team — and a better bottom line — start managing employees the Danish way.