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“Two year itch”, holding back businesses

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Institute of Leadership & Management publishes major piece of research into links between happiness, productivity and performance in the workplace.

UK managers are happiest during the first two years spent at an organisation, according to research published today (Wednesday 21 November) by the Institute of Leadership & Management (ILM). The report uncovered evidence of a ‘two year itch’ that is harming the productivity of UK plc, with managers’ happiness and performance decreasing significantly across the board after this point. The pursuit of happiness: positivity and performance among UK managers is the first ever management diagnostic produced by ILM.

The ILM study, which asked over 1,000 managers to assess themselves and their teams in terms of confidence, happiness and performance, revealed that stress can actually have a positive impact on productivity in the workplace. Almost nine out of ten (87%) managers who rated their team’s performance highly also described their staff as ‘somewhat’ or ‘not very’ stressed, compared to just five percent whose staff were ‘very stressed’ and eight percent who were ‘not at all stressed’. This highlights the challenge for organisations and managers to maintain the right level of stress, enough to focus and energise, without being so great that it affects wellbeing and performance. The research reveals that happy managers are better managers overall. When asked to rate their own performance, the top ten percent of managers were also the happiest, with a happiness rating of 86 out of 100, while the bottom ten percent of performers rated themselves as least happy at 30 out of 100.

It also found that managers with happy and low-stressed team members were happier and less stressed themselves, indicating that both happiness and stress radiate up and down through organisations. The survey indicates a clear link between training and development, and the happiness and performance of both managers and their teams. Managers with clear access to progression and development pathways were shown to be happier and performing at a higher level than those with less access. Charles Elvin, chief executive of the Institute of Leadership & Management, said: “Our research shows that managers’ performance and happiness tend to peak after two years within an organisation, before falling away rapidly. Organisations can counteract this ‘two year itch’ by harnessing and retaining managers’ early energy and enthusiasm with timely training over this crucial period.

“Our survey also highlights the pressing need to target training more effectively for front-line managers, who have the least access to development opportunities, and stand out as being less happy, more stressed and performing to a lower level than their more senior colleagues.”

ILM set out to examine a range of other factors that affect managers’ happiness, such as size and sector of the organisation they work for, their level of seniority and the size of the team they manage, with the aim of determining the optimum conditions in which UK managers should thrive. It found that the happiest managers: work in small organisations (less than 20 employees); manage larger teams (more than ten reports); and are either very senior (for example at CEO level); or have been with their organisation for less than two years.

David Pardey, Head of Research & Policy at ILM, added: “Strong management and great leadership are the keys to social and economic prosperity, both for organisations and the UK as a whole. It is essential that we understand how managers are faring and feeling, to enable businesses to create the right environments for them to thrive. “ILM’s research demonstrates the business benefits to organisations of improving their staff’s wellbeing, through increasing support and ensuring managers have the skills they need to cope effectively with their workload. We know that organisations that train and develop their managers in a timely and targeted way, not only drive happiness, engagement and loyalty, but also see improved business performance.”

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