While we live in a time of increasing technology, businesses are still highly dependent on humans; in fact, people are central to the future of work. As such, keeping those humans happy is central to the success of every business. Employee happiness isn’t just about being a nice company owner or manager – it’s truly important to your bottom line.
Here are the reasons every leader should be thinking about boosting employee happiness… and a few different ways to do so.
Happy employees stay put, while unhappy ones go off in search of greener pastures. This leaves companies dealing with employee turnover and this can be costly.
How much does employee turnover cost? Josh Bersin of Deloitte estimates the cost of losing an employee is as much as 1.5 to 2 times the employee’s annual salary. When you consider the time it takes to search for and interview a new candidate – let alone train – it’s worth much more to the company to keep their current employees happy and in place.
Another way that employee happiness is linked to better business is by boosting productivity. This isn’t just perception; study after study has found that happier employees are more productive.
A study by researchers at the University of Warwick put an exact number on that increase in productivity: 12 percent. Subjects who had their happiness levels increased had an impressive 12 percent greater productivity. In addition to this, the per-piece quality of their work wasn’t altered at all.
To verify their findings, the researchers tried a second experiment where they looked at the productivity of employees who had suffered real-world events that made them unhappy – like a death or an illness in the family. Right in line with the findings from the first experiment, those who were less happy were less productive.
If happier employees lead to less turnover and greater productivity, this amounts to an increase in overall value for the company. In fact, Forbes reported that the stock prices of its “100 Best Companies to Work for” rose 14 percent per year from 1998 to 2005. As for companies not on the list? Their stock prices only increased by 6 percent.
While happiness itself might feel like a subjective concept, what this means in objective terms is that happier employees equal a thriving, more valuable company.
Ways to Boost Employee Happiness
With all of that said, what are the best ways to boost employee morale and create a company culture with a focus on employee happiness? Paying employees more is one way, but for companies that are strapped for cash, there are other strategies to lift the spirits of your team.
Prioritize work/life balance. Work/life balance has become a big focus for many employees – and particularly the younger generations. All work and no play doesn’t just make Jack a dull boy; it can make him less healthy, less focused, and less productive. Help employees prioritize time to pursue hobbies or just relax.
Offer flexible work hours if possible. This is closely related to work/life balance, but offering flexible work scheduling goes a long way towards increasing employee happiness. Whether it’s avoiding that long morning commute or spending more time with the family, allowing employees some wiggle room in terms of when they start their workday can help them feel more in control of their lives.
Maintain clear and transparent communication. Communication is key to employee happiness, whether it’s clearly communicating job requirements and expectations or really listening to employee critiques and concerns. Learning how to communicate effectively to all demographics, from texting with Gen Zers to reducing workplace risks and fostering better teamwork with excellent communication with industrial employees, greatly boosts morale throughout any organization
Offer incentives and a path forward. Finally, offer employees a reason to stay, including good benefits and a path forward. If they feel rewarded for a job well done and have a way to advance upwards in their careers, you’ll build a company centered around employee happiness and supported by a base of loyal, longtime team members.