As burnout, loneliness and disengagement rise, organisations face growing challenges around productivity, retention and employee wellbeing. While many continue to invest in structured wellbeing programs to address this issue, Julian Pace, Founder and Managing Director of Happiness Group, believes that happiness is fundamentally a leadership issue, not something that can simply be outsourced.
“Happiness is often viewed as the product of employee perks and wellbeing initiatives, but it is much deeper than that,” he says. “Happiness is a mindset that shapes how we think, behave and perform across all aspects of our personal and professional lives.”
Research increasingly supports this sentiment, confirming happier workplaces outperform their peers.
- Gallup’s State of the Global Workplace 2026 report reveals that just 20 per cent of workers feel truly involved and enthusiastic about their jobs, while 16 per cent feel actively disengaged – conditions that continue to cost the global economy trillions in lost productivity. This report also confirms that the percentage of people experiencing negative emotions at work (like stress, anger and sadness), remains above pre-pandemic levels.
- Additional insights published by KindHive in The Global Workplace Happiness Report 2026, show companies that consistently demonstrate clarity, care, recognition and connection (four human behaviours that separate sustainably growing organisations from those that stall), achieve 17 per cent higher productivity and are 34 per cent more likely to double EBITDA over 10 years.
For Julian, these findings emphasise the critical role of human-centred leadership in creating happiness and shaping both individual and organisational performance.
“When people experience loneliness, burnout or disconnection, even the smallest of challenges can feel overwhelming,” he says. “Happy people have the emotional capacity to navigate uncertainty, solve problems, work collaboratively and contribute positively to their teams – qualities that directly impact organisational performance.”
“Human-centred leaders recognise that people perform better when they are happy,” Julian continues. “This understanding makes happiness a powerful indicator of organisational health and strategic leadership capability that drives engagement, innovation, retention and long-term organisational performance.”
The evolution of executive search
Growing focus on employee happiness and engagement continues to shape executive search, with Ivan Zuvela – Managing Partner for Gerard Daniels Perth – noting a shift in the demand for candidates capable of leading with a human-centred approach.
“Fifteen years ago, executive appointments were largely based on technical and commercial expertise, sector knowledge and financial capability. Today, clients increasingly ask who candidates are as people; how they build relationships and develop the capability of others; and whether they instil trust and influence in a way that strengthens culture and inspires others to follow,” says Ivan.
“Candidate expectations have also evolved,” Ivan continues. “Across our talent networks, executives want to know who they will be working for; what their culture and values are; how they will be developed and grow; and whether they will feel like they belong – changes that represent a significant shift in our approach to deliver successful executive search assignments.”
Redefining what successful leadership looks like
While commercial achievement was once considered the primary measure of leadership success, performance is increasingly measured by the ability to create environments where people feel they belong, have opportunities to grow and understand why their work matters. Intentionally creating this type of environment builds the trust, inclusion and psychological safety that people need to perform at their best.
“Feeling disconnected directly impacts performance at work, making people less likely to engage, speak up, ask questions, collaborate and take the kind of risk that drives innovation,” says Julian. “When people feel seen, heard, valued and safe to be their authentic selves, they are far more likely to contribute, collaborate, innovate, ask for help and support others.”
Developing people, not just capability
The shift towards human-centred leadership is changing how organisations approach professional development. Where development once focused solely on improving technical capability and commercial expertise, to attract and retain top talent today employers must also understand that people want to walk out better than when they walked in.
“Building happy and thriving teams means broadening the development focus from building skills and technical capability to developing people,” says Julian. “This is an important distinction, because when people improve their self-awareness, EQ, communication and ability to accept feedback, they not only become better leaders, but also better colleagues, parents, partners and friends.”
When organisations invest deliberately in building these capabilities, leadership becomes less about directing performance and more about creating the conditions that allow people to thrive.
Building trust and purpose
Leadership effectiveness is not only measured by commercial outcomes, but by how it makes people feel about themselves, their employer and the work that they do.
Purpose is a powerful tool for effective leaders, with research by Gallup and the Wellbeing and Planet Earth Foundation confirming that employees who enjoy their work and feel it improves the lives of others, report a stronger sense of wellbeing and workplace engagement.
DHL provides a great example, having ranked in the top 10 of the World's Best Workplaces™ list for 9 consecutive years (including 6 years inside the top 2). “Helping DHL employees to think beyond moving parcels to connect their work with delivering meaningful customer moments, has been a key factor for DHL in achieving this,” says Julian.
Trust is an equally important factor in building happy and engaged teams, because when people work for leaders that they genuinely like and trust, they are likely to be more curious, accepting of mistakes, willing to contribute and prepared to go above and beyond.
Harvard's landmark Study of Adult Development, alongside broader longevity research, has consistently shown the quality of our relationships to be one of the strongest predictors of long-term health, happiness and wellbeing. In the workplace, these findings reinforce the importance of leaders who create trust, connection and psychological safety. The Happiness Group's own research also identifies empathy and positive enthusiasm as key qualities in leaders who build happy, engaged and high-performing teams.
Considerable investment goes into refining strategy and operations, but the organisations best positioned for long-term success will be those that value people as more than headcount and recognise leadership as more than just a commercial capability. “To strengthen commercial outcomes, leaders must be capable of shaping how people think, feel and perform each day,” says Ivan. “A human-centred approach is key to this, helping leaders to attract exceptional leaders, build strong culture and sustain long-term performance.”
