Why Employee Happiness Matters

Each day it seems there are more and more magazine articles, podcasts, and tweets crafted about the importance of employee happiness. But even after reading all of them you might still be wondering: why does employee happiness matter so much? In the following blog post, we’ll aim to answer this question by providing helpful information and statistics from recent industry research and experts who study how happiness affects the workplace.

Greater Productivity

To start things off, employee happiness can have a positive impact on overall productivity. Simply put: happiness is a motivator. When we feel happy we want to continue doing what makes us happy and we want to increase the flow of happiness. Now, the workplace isn’t probably most people’s “happy place” go-to, but if an employee feels fulfilled, accomplished, accepted, and praised at work, they will probably want to continue ensuring their work situation continues to give them those attributes by working hard, meeting goals, and focusing on their responsibilities.

Research lead by professor of economics at Warwick Business School, Andrew Oswald, shows that employees’ happiness has a significantly positive impact on work productivity, “We find that human happiness has large and positive causal effects on productivity, Positive emotions appear to invigorate human beings, while negative emotions have the opposite effect.”

Unhappy employees may still physically show up to work, but often the more unhappy the employee, the less they’re mentally “there,” which may mean a significant decrease in their work productivity. According to Gallup, disengaged, unhappy employees cost the American economy up to $350 billion per year due to lost productivity.

This is also true of employees who aren’t necessarily unhappy, but have reached a point in their career where they can no longer grow both within the company and as a professional. Employees want to feel like they can continue to master their position and not just get stuck in a rut.

Higher Sales Figures

This same idea applies to sales figures. Happy employees want to meet goals. They want to measure their success so they can be praised and celebrate their achievements. Employees who feel empowered to meet these goals are excited and motivated to do so for a company that makes them feel happy.

A Gallup study by James Harter demonstrates that employee feelings and attitudes about a business can be reflected in the business sales and profits.

Not only will employee happiness create a desire and motivation to reach and surpass sales goals, but as the Bill Network explains, they can do it at a more quality and faster rate than unhappy employees: “I can give you an SAT test, a Sudoku puzzle, a crossword puzzle — any of 15 different tasks all requiring intelligence — and prime you to be in a happy group, a neutral group, or an unhappy group,” says Shawn Achor, author of The Happiness Advantage, citing a study of 65,000 businesspeople. “The happy group will outperform the others every single time.”

Better Networking and Social Support

Happy people want to be around other people. They want to exchange ideas and stories, are willing to help others out, and want to do it all with a friendly and charming demeanor. They want to communicate with others, and more importantly, they want to make others happy (which means greater customer satisfaction).

On the other hand, unhappy people tend to pull away from social situations wanting little contact with others, especially co-workers or customers that may be the source of their unhappiness. Unhappy people are less willing to contribute ideas in a discussion or offer assistance or idea exchanges with others.

As stated by CustomerSkills, “According to J.M. George in his research article published in Human Relations, and P. Totterdell and his colleagues, in their article in the Journal of Personality and Social Psychology, a bad mood moves people into an entirely different way of thinking and acting. When people are feeling negative they become critics of each other, and take a win-lose approach to problems and efficiency suffers. Negative people concentrate on what is wrong and attempt to correct it. Conversely, a positive mood stimulates people to be creative, tolerant, constructive, generous and non-defensive. The focus is not on what is wrong, but on what is right.”

Fewer Absent Days/Lower Turnover Rate

As Forbes reports, “90% of employees are willing to consider changing jobs and unsatisfied employees are 11 times more likely to move to a new organization in the next year, according to 24 Seven.”

Let’s face it: if an employee is unhappy at their place of work, they probably do not want to be there. This can manifest itself in a higher amount of sick and personal days, and more excuses to leave work early or put in less effort. Unhappy employees are looking for a way out, which means looking for a new job opportunity so they can leave your company (they may even be using work time and company resources to do so). Both of these things are obviously detrimental to your company’s well being. Additionally, the process of hiring a new employee will end up costing you more time and resources than maintaining happy employees, even while giving them regular rewards.

According to a Wall Street Journal study, employees who report being happy at work take ten times fewer sick days than unhappy employees. They also stay in their position twice as long as unhappy employees who are more likely to quit to look for fulfillment.

As a business owner, have you noticed changes in your business related to your employee’s happiness? Do you find that your business functions better when your employees are happy? Let us know in the comments section below.

Why Employee Happiness Matters