'Troubling trend': Employee happiness drop to 4-year low in May

Employee happiness plummeted in the second quarter of 2024 after plunging to a four-year low in May, according to data from BambooHR.

Its quarterly Employee Happiness Index revealed that employee happiness dropped to a score below 36 in the second quarter, becoming the lowest-ever Q2 in the index.

Employee happiness further hit a four-year low in May 2024 with a 35 score, down from 44 in May 2020, according to the index. In addition, there was a five-per-cent decrease in employee happiness from June 2023 to June 2024.

^{Source: BambooHR}

Anita Grantham, head of HR at BambooHR, said the findings indicate a "troubling trend" in employee sentiment.

"This persistent decline throughout Q2 2024, with scores consistently below 36, is alarming and signals a critical need for organisational introspection and action," Grantham said in a statement.

Where are the happiest employees?

According to BambooHR, there was a "slight global improvement" in employee happiness as June concluded despite a general decline across all regions in the early months of the second quarter.

North America saw the happiest employees in the second quarter, with an average happiness score of 40 in June.

On the other hand, employees in the Asia Pacific region were the least happy with an average happiness score of only 24.

Smaller companies with fewer than 75 employees have the happiest workforce, according to the report. Organisations with a predominantly newer workforce are also revealed to be two per cent happier than those with a longer-tenured employees.

Grantham said the findings underscore the importance of a "well-defined talent philosophy," especially for growing organisations.

"For large companies, it provides a framework to manage vast human resources effectively, ensuring alignment with strategic goals and reducing turnover," she said.

"Meanwhile, small companies benefit immensely as it allows them to compete for top talent by offering a clear value proposition and culture fit, which is crucial in today's competitive job market."

Happiness by industry

Employees in the Construction industry also emerged as the happiest one with an average score of 51 in the second quarter, with only a marginal increase of less than one per cent from the previous one.

"This indicates a small positive shift in employee sentiment, which could be due to minor improvements in workplace conditions, policies, or employee engagement strategies," the report read.

The full list of happiest industries include:

• Construction (52)
• Nonprofit (36)
• Travel and Hospitality (36)
• Finance (36)
• Education (36)
• Restaurant, Food, and Beverage (34)
• Technology (32)
• Healthcare (31)

To improve employee happiness, Grantham said leaders should enhance engagement efforts, support teams in workplace transitions, and foster open lines of communication.

"It's not just about improving numbers but building a workplace that genuinely prioritises the well-being and satisfaction of every employee, thereby cultivating a culture of sustained happiness and productivity," she said.