# Employee happiness rebounds: Happiest companies see 46% lower turnover rates New research indicates employee morale is recovering from historic lows. - **Source:** [Fast Company](https://www.fastcompany.com) - **Published:** 2026-08-07 - **Topic:** [People & Culture](https://brifing.si/c/people) - **Original article:** - **On Brifing:** https://brifing.si/s/8a281c4a-f450-442a-99fa-47d39a73b39b ## Recovery in employee happiness begins BambooHR's latest Employee Happiness Index reveals that worker morale is starting to climb from all-time lows. The study shows a positive turnaround in employee satisfaction, which had experienced a steep decline post-pandemic. The index has recorded a steady upward trend since the second half of 2023 across multiple industries. ## The happiness-retention connection Data indicates companies with the happiest employees experience 46% lower turnover rates compared to those with lower happiness scores. This finding clearly demonstrates the direct relationship between employee engagement and company performance. The correlation is particularly pronounced in technology and financial sectors according to the report. ## How the index is measured BambooHR's index compiles anonymous feedback from employees across 1,000+ companies. Measurements cover 12 key factors including work-life balance, career development opportunities, managerial support, and pay equity. Surveys are conducted quarterly, providing comparative analyses across different industry verticals and company sizes. ## Are pandemic effects fading? Experts note that employee dissatisfaction, which peaked during the 'Great Resignation' of 2021-2022, is gradually declining. The widespread adoption of hybrid work models and increased corporate investment in employee wellbeing programs appear to be key drivers. However, happiness levels remain below pre-2019 benchmarks in most sectors. ## Sector-specific trends emerge The research shows education and healthcare sectors are experiencing above-average improvements in employee happiness. Conversely, high-pressure industries like retail and customer service are seeing slower recovery. Tech companies are in a rebuilding phase following last year's mass layoffs, with happiness metrics showing gradual improvement. ## Impact of managerial practices Changes in leadership approaches are contributing significantly to the happiness rebound. Teams adopting greater transparency, flexibility, and feedback cultures show more pronounced satisfaction gains. Many organizations are focusing their investments on training programs for middle managers, recognizing their pivotal role in daily employee experience. ## Economic uncertainty's influence Analysts suggest global recession concerns have reduced employees' willingness to job-hop, increasing attachment to current positions. However, questions remain about whether this fragile recovery in happiness levels can be sustained when economic conditions improve and job market mobility increases again. ## Key takeaways for organizations The research underscores that employee happiness has evolved from an HR metric to a strategic performance indicator. In talent-competitive sectors, companies actively monitoring happiness indices and adapting policies accordingly are gaining measurable competitive advantages, particularly in retention and productivity metrics. ## Sources covering this story - https://www.fastcompany.com/91586518/employee-happiness-is-climbing-back-from-all-time-lows-survey-suggests — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._