The State of Employee Happiness and Engagement in 2020

Facts on the state of employee satisfaction and happiness in small businesses in the UK. Compiled from over 250 organisations, over 7,000 employees representing 37,000 data points from across the UK between 2019 and 2020.

A note on our Polls data

Responses have been analysed from


locations in the UK





Our survey highlighted 4 essential elements to building a team of happy, engaged and productive people:




Personal growth

Employees are happiest and most engaged when they’re satisfied with their teams and their management. If they feel their work is recognised and that they’re directly contributing to the success of the business — that's when they perform to the best of their abilities.

Our survey data from over 37,000 unique data points gathered anonymously from CharlieHR users reflect a current and honest insight into some key elements of life as an employee in a small business. Our findings from employees across the UK show that there are some huge cracks in employee experience:


Only 10% would say they’re happy at work there is a happiness at work problem


frequently think about looking for a new job at a new company there is an engagement and retention problem


feel their leadership team/founders don’t lead by example there is a leadership problem

While 90% of respondents don’t feel happy at work, 90% of employees feel their teams are committed to doing quality work. This means that the statistics aren’t a result of frequent spats with fellow team members or caused by physical distance from their colleagues.

The root cause of the negative employee sentiments towards their companies and work lives stem from a higher, administrative level.

By analysing the current state of HR in small businesses in the UK alongside the sentiments of their employees, we’ve identified some issues at the core of the worryingly widespread negative experience of SME employees.

A negative employee experience leads not just to employee retention problems, but affects employee mental health as well.

The engagement problem


don’t feel like their opinion matters in the business

Many people are drawn to small businesses by the promise of having an impact on the success and direction of the company.

The reality is however, that 86% of SME employees don’t feel that they are involved appropriately in decisions that affect their work, or the direction of their team’s work.

This has a negative impact on employee retention in SMEs, with many suffering from high employee turnover rates. It costs many businesses valuable time and money to go through what can be a lengthy sourcing, hiring and training process.

Aside from time and money considerations, it costs teams and your hiring team hours of productivity that could otherwise be spent on things contributing directly to the success of your business.

Building a true culture of growth and development not only boosts employee performance and gives them a clear view on how their work performance is faring, it also fosters higher quality work output and more creative input.

When employees have a current and clear understanding of their performance, it’s easier to be motivated to continue on their strong trajectory, or focus on areas needing improvement. This means not only stronger motivation, but better contributions to their team and higher performance overall.

Frequent and productive performance reviews are vital as they provide structure and signal the investment of managers and the business in the individual’s growth and performance.

Our survey revealed that up to 34% of companies run reviews only twice a year. Having reviews, or just simple one-to-ones, more frequently is the first step to building a culture where open two-way feedback is welcomed and encouraged.


of companies link performance directly to compensation

With 60% of companies linking performance directly to compensation, there is a disconnect between the support given to employees wanting to progress in their careers and the expectation that employees will improve their performance and productivity in order to increase their compensation.

The happiness and wellbeing problem


of employees feel that work negatively impacts their lives


of employees are unable to manage a healthy work-life balance

There is a serious problem with employee wellness with 87% of employees reporting they are unable to manage a healthy work-life balance and 85% reporting they felt their workloads were unmanageable. These are all causes of feelings of stress, overwork and fatigue.

The wellness of team members should concern all businesses and managers - but there’s also a business case for supporting the wellbeing of their teams.

High, untenable stress levels leads to lower productivity and can destroy any sense of motivation leading to poorer quality and lower quantities of useful output.

However, 52% of companies don’t have any form of mental health or wellbeing policy in place - many businesses aren’t investing in supporting the wellbeing of their team members which will affect not only individual wellbeing, but that of the business as a whole too.


of employees feel their company doesn’t support them when they need to deal with personal or family issues

A staggering 94% of employees feel their company doesn’t support them when they need to deal with personal or family issues. And as can be seen by the 80% that feel work negatively affects their lives - there’s a clear overflow of work and personal life - it’s impossible to detach the effects of stress from one from the other.

The leadership problem


feel their leadership team/founders don’t lead by example

It’s hard to take things seriously and give your work your all, when your manager or CEO isn’t doing the same. Without strong leadership to guide and inspire, employees will find it difficult to hold onto long-term motivation and drive for success in hitting targets within or beyond the realm of their job spec. Yet 83% of employees feel their leadership don’t exhibit the desirable behaviours they ask of their team.

It’s impossible to imbue true dedication to the task at hand, the success of the company, in employees when the company leaders fail to exhibit behaviours that signal dedication and serious commitment to the team and company themselves.

87% of employees understand how their work contributes to company and team goals, and a further 90% feel their fellow team members are committed to doing quality work. There is therefore a shortcoming in SME leadership teams, which contributes to employee lack of motivation and output. It will likely lead to the individual looking elsewhere for a leadership team who is as outwardly committed to the success of the company as team members are expected to be. It’s hardly inspiring working for someone who doesn’t hold themselves to the same standards, which can lead to burn out, demotivation and causes a lack of incentive to perform or strive to.

The retention problem


of employees would leave if they were offered the same job at another company


don’t see themselves in their current role in 2 years

Having team members who actively think about their next career step can be a good thing for your business, a sign that they are engaged with their career development and a team whose careers are important to them. However, the fact that  84% of employees don’t see themselves in their current role or current company in 2 years is a potential problem for SMEs.

Ambitious team members will likely push for their own learning and development opportunities, which is great for any SME. Ambitious individuals committed to moving up in their careers fosters greater productivity and contributions to the business at all levels. The problem arises in the fact that the majority of employees don’t see their growth happening within the bounds of their current role. This is a clear indication of a lack of clarity on career development within their current company.

A clear and visible career progression pathway is a key part of keeping a team engaged, and crucial for retaining team members.


don’t see a path for themselves to advance their career at their current company

86% of respondents feel that this tangible pathway for growth is missing in their current roles. If there is a clearer path for their career to grow beyond the bounds of your business, the most ambitious and committed will leave to chase a position where their full potential is more evidently likely to lead to progression in their careers.

Access the full data

The CharlieHR Benchmarking Survey + Polls report