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A Good Investment: How Keeping Employees Happy Benefits Business
While keeping customers happy has long been a primary goal for businesses, many companies neglect employees’ happiness.
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As a business owner, it’s tempting to focus your growth efforts solely on operational aspects such as lead generation and sales. However, it’s just as important to prioritize employee happiness. After all, when the people who interact with your customers and drive sales are happy, they’re more likely to be productive and motivated. In this article, we explain why keeping your workforce happy is essential and how to do it effectively.
How happy employees benefit your business
Besides being the right thing to do, keeping employees happy has several benefits for you and your team. “Having a happy and engaged workforce is essential to driving strong economic output,” said Floor van Griensven, chief people officer at Trivium Packaging. “Happiness also promotes a culture of collaboration and teamwork, which positively impacts engagement.”
Here are some of the primary advantages associated with a motivated workforce.
Increased productivity
The University of Warwick found that workplace bliss leads to a 12 percent increase in productivity. Employees who are happier with their jobs will take fewer coffee breaks and bathroom breaks that are just about getting away from their desks. Conversely, stressed-out and unsatisfied employees are easily distracted from their work. For any business that’s watching its bottom line, the simple fact that joyful employees tend to be more productive should be reason enough to invest in their happiness.
“Happy employees naturally deliver better service, stay loyal longer and actively help grow your business,” explained Tim Heneveld, country director for PERGOLUX. “Prioritizing happiness isn’t just nice, but it’s smart business.”
High engagement
Maintaining high employee engagement is one of the most important things your business can do. Engaged employees are passionate about their work and excited to contribute. Employee happiness is one of the first steps to drive employee engagement ― an upbeat employee is more likely to feel connected to their workplace’s success.
“Employee happiness is the foundation of a healthy, high-functioning workplace,” said Jamie Walden, owner of Pure Barre Macon. “When your team feels supported, seen and valued, they show up with more energy and purpose, which directly impacts the member experience.”
Enhanced creativity
Since satisfied employees are more engaged at work, it enables them to see more of the big picture and offer creative ideas and suggestions that may benefit the whole business. Personnel who feel safe to take risks and suggest creative ideas can be vital to an organization’s innovation. “Happy employees bring more energy, focus and intent to their work,” said Swapnil Shinde, CEO at Zeni. “They’re not just checking boxes; they are thinking critically, collaborating effectively and they push to exceed expectations.”
Low absenteeism
Unhappy employees are less committed to their jobs and may find distractions or excuses for their inability to attend work, increasing your overall employee absenteeism rate. On the other hand, happy employees are excited to work and intrinsically motivated to show up ― on time. “When my team feels fulfilled and appreciated, they’re more likely to go the extra mile, stay longer and build stronger connections with members of our community,” Walden said. “It creates a ripple effect that boosts every part of the business.”
Improved retention
Recruiting and training employees is expensive for businesses, especially when faced with high levels of employee turnover. Often, this movement stems from employee happiness — or lack thereof. According to Gallup, 45 percent of employees who voluntarily left their jobs said no one in a leadership role had initiated a conversation about their work satisfaction or future at the company in the months leading up to their departure.
Company loyalty tends to weaken when employees feel dissatisfied in their workplace. In contrast, employers who invest in employee happiness help their teams feel valued, leading to improved employee retention and lower turnover rates. “When employees are genuinely happy at work, they’re more productive, more engaged in their roles and far more likely to stay with the company long-term,” Shinde said. “That means less time and money spent on hiring and training new people and more energy focused on growth, innovation and execution.”
How to keep employees happy
So, if we all agree that keeping employees happy is important, how do we do it? Here are some tried-and-true strategies to apply to your business.
1. Create an inclusive workplace.
Start creating a diverse and inclusive workplace by hiring employees who represent your company’s values. Train your leadership to demonstrate these values, too. An inclusive workplace that celebrates employee diversity and uniqueness is ideal for fostering employee satisfaction.
“The best leaders know that genuine happiness from their team doesn’t come from hosting pizza parties on Fridays,” Shinde highlighted. “It comes from four key foundations: psychological safety, recognition, career growth and transparency.”
People want to work with happy people and joy is contagious. If some of your employees are motivated, it can have a multiplying effect on your other employees ― assuming you have a good culture for everyone.
2. Acknowledge employees’ accomplishments.
As a leader, recognizing employees in both big and small ways is important to ensure they know you appreciate them. In fact, a recent Canva study found that appreciation in the workplace has a direct impact on performance and mindset: 87 percent of employees reported that it boosts motivation, and 84 percent noted that it improves productivity.
Keep in mind that every employee has different criteria for feeling supported and praised. One of the worst mistakes managers can make is praising employees in the wrong “language.” Be sure to ask your employees how they like to be recognized. “Leaders who really listen and openly recognize employee successes create trust,” Heneveld said. “These gestures of appreciation often go a long way.”
3. Offer flexible scheduling.
As remote work and flexible working hours have become relatively common in recent years, employees quickly learned to favor flexibility in the workplace, with one in three claiming flexibility drives satisfaction, according to Deloitte.
Choosing their schedules can help workers improve their work-life balance and overall workplace feel. When you’re flexible with scheduling, your employees will thank you. “Flexibility gives people the freedom to design their work in a way that supports both performance and well-being,” Shinde said.
4. Craft a comprehensive salary and benefits package.
Competitive employee compensation and comprehensive employee benefits are essential to attract and retain employees in today’s marketplace. The market is tight for labor, so you likely need to up your offering just to compete. These offerings can include additional PTO incentives, wellness benefits like a gym membership, commuter reimbursement or even pet insurance.
Before offering additional perks, survey employees to ensure they’ll be beneficial to them. For example, if some employees commute to the office by train, while others drive, you should offer a solution that meets the needs of both groups.
Beyond benefits, employee happiness is also dependent on fair compensation. Offering competitive wages and benefits shows that you value your staff and care about their well-being. Review compensation and benefits at least once a year to ensure you stay competitive with industry standards.
5. Provide staff with relevant training and development.
If you want your employees to be happy, you need to provide them with the tools necessary to do their jobs. If you plan for them to use a new software system, offer employees training, manuals and time for them to get accustomed to it. If a new policy is going into effect, don’t just tell them what it is; explain why it’s happening and what benefits it will provide to personnel and the company as a whole.
As employees grow within your organization, offer career development opportunities so they can upskill and advance professionally. Learning and development are not only important for employee happiness but also crucial to employee retention. Supporting employee growth through targeted training and development helps them excel, making your investment in their success truly worthwhile. “It’s not about perks — it’s about creating an environment where people can thrive,” Shinde noted.
6. Ask employees for input.
Go straight to the source by asking employees how you can better support them. Ensure these conversations are ongoing by establishing a clear line of communication where employees can share both named and anonymous feedback, prioritizing honesty over appeasement. This can foster trust while providing employees a safe and supportive environment where they feel encouraged to contribute.
According to van Griensven, the most important thing is to take consistent action after gathering input from your team. “Listening can take many forms, from surveys and pulse checks to town halls and feedback sessions,” van Griensven said. “This will make employee happiness and engagement contagious and a priority for everyone.”
7. Help employees visualize their future.
Humans are goal-driven — they’re motivated by understanding what they’re working toward and why it matters. That’s why it’s important to be transparent about your company’s mission and how each employee contributes to it. “Purpose gives meaning,” Heneveld said. “Employees committed to the mission will stick around because it matters to them personally.”
But vision alone isn’t enough — it must be followed up with action. Learn about your employees’ goals and establish pathways to support them, such as mentorship programs or cross-department initiatives. “When [employees are] supported in learning and advancing, they see a future with the company,” Shinde noted. “And when leadership is open about goals, decisions and challenges, trust deepens.”
8. Create a peer-to-peer recognition program.
In addition to praise from leadership, empower employees to acknowledge one another’s contributions through a peer-to-peer recognition program. This can be as formal or informal as you’d like — from a dedicated communication channel for shout-outs to a weekly vote for the teammate who made the biggest impact.
Peer-to-peer recognition can lead to stronger team-wide collaboration, as it celebrates and encourages employees to use their strengths in working together toward a common goal. It can also positively impact the broader organization by reinforcing a clear message: collaboration and teamwork are valued and rewarded.
Skye Schooley and Margarita Hakobyan contributed to the reporting and writing in this article.
