The ROI of Employee Happiness

‘Employee happiness’ has long been spoken about in the workplace; but only now is it becoming a key focus for companies. From early-stage startups through to multinational organisations, employers all over the world are taking employee wellbeing more seriously than ever before. But why?

Research has continuously shown that the cost of not having an employee wellness program in place is far greater than the cost of implementing one. Employee happiness has repeatedly and explicitly been linked to a business’s bottom line.

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Why employee happiness matters

So, what is the true value of employee happiness? Is it worth investing in? And how can we go about increasing happiness at work? We break down the key factors below.

Increased productivity

Employee happiness is very much tied to increased productivity; with some studies reporting a rise of up to 18%.

Your company is only as strong as the people in it; so if your team are engaged and productive, you will start to see an increase in output and a significant increase in ROI.

This is especially true when it comes to salespeople; in some cases, employee happiness has been reported to increase sales by 37%.

More creativity

Employees who are happy at work experience improved levels of creativity and demonstrate a better ability to think outside-the-box.

From your operations team to your marketing team, employees will be better equipped to solve problems, find new ways to work together, attract new customers and sell more efficiently.

Increased levels of creativity can only mean good things for your company’s bottom line and the growth of your business.

Reduced absenteeism

Absenteeism costs the average UK business £554 per employee; and while this can’t always be helped, some of these are likely to be non-genuine absences.

These kinds of absences can be hugely damaging for businesses; especially startups and SMEs, reflecting a much deeper issue within a business.

Besides sickness, there are a number of reasons for unplanned absences; including low morale, a lack of company culture, a heavy workload, negative feedback, disengagement, and stress.

Several of these can be helped by an effective employee wellbeing program.

As staff become happier at work, employee attendance rates will start to increase, boosting productivity and saving employers money as a result.

Better retention rates

Employees who are happy at work are more likely to stay at a company long-term.

While you can attract talent with a great salary alone, if company culture, work environment, progression and feedback aren’t there, employees will start to search for pastures new.

It’s been reported that the average employee costs SME’s £12,000 to replace; including recruitment, salary, and training.

For most employers, the cost of replacing just one employee is higher than the cost of investing in employee wellness from the start.

Improved branding

Who better than your staff to advertise your business? With happier employees, companies generate a better business brand; which can be a useful tool in talent recruitment.

With social media, review sites and Glassdoor now playing a huge part in potential employees’ decision-making, unhappy staff and a poor company culture can be damaging to your brand.

When they’re looking online, will potential hires find information on your wellbeing initiatives, team away days and work perks; or will they come across negative Glassdoor reviews from disengaged team members?

Employee happiness contributes a lot of value when it comes to talent recruitment.

After years of discussion, work happiness is becoming a reality for many of those in employment. Employees now expect certain amenities at work, and when they are searching for a new job, they actively look for a happy workspace.

Savvy employers know they need to offer a strong employee wellbeing program in order to remain competitive.

How to increase employee happiness

So that’s the why; but how? As you might expect, building an effective employee wellbeing strategy isn’t easy; it takes time, dedication and trial-and-error.

At a minimum, employee happiness needs to consider:

Physical work environment

The physical environment plays a huge part in employee happiness.

A great work environment (which includes everything from comfortable chairs and natural lighting, to plants and art) has been proven to increase workplace wellness and productivity.

Company culture

Great company culture has been linked to higher rates of employee engagement, productivity and happiness at work.

Employees look for a company culture that reflects their own values, so this can help differentiate your organisation from others in the market.

Physical and mental wellbeing

Focusing on employee health and wellbeing has been proven to increase focus, productivity, and lower the risks of illness (and therefore, absenteeism).

Likewise, mental wellbeing plays a key part in employee engagement and satisfaction – improving productivity by as much as 12%.

Salary and bonuses

Financial incentives aren’t everything, but compensation plays an important part in employee happiness.

Constantly review your salary offering to ensure you remain competitive and to keep your employees engaged and happy.

Good relationships with colleagues

Employees who have strong relationships with their peers are more engaged, happier and more productive at work.

Socials, after-work events and team bonding activities can help to improve relationships amongst your team.

This article was written by Work.Life. Work.Life specialises in work happiness; in fact, it’s our number one priority across our coworking spaces. To find out how you can bring a culture of happiness and wellbeing into your business, and to learn more about our office spaces, head to Work.Life.