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A Good Investment: How Keeping Employees Happy Benefits Business

Updated Sep 08, 2023

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Why it’s important to keep employees happy

While keeping your employees happy is just generally the right thing to do, it can also have several benefits for you and your team. Here are some of the primary advantages associated with a motivated workforce.

Increased productivity

The U.K.-based University of Warwick found that workplace bliss leads to a 12% increase in productivity, while distress leads to a 10% decrease. It’s not surprising; employees who are happier with their jobs will take fewer coffee breaks and bathroom breaks that are really about just 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.

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.

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.

Low absenteeism

Unhappy employees are less committed to their jobs and may find distractions or excuses for why they can’t show up to 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.

Improved retention

Employee happiness plays a huge role in employee turnover. Research from the Development Academy found that more than 75% of unsatisfied workers are looking to leave their current roles. When people are gratified at work, they’re less likely to look for other jobs. Since recruiting and training employees is one of the most expensive activities a company can engage in, retaining happy employees can significantly impact your bottom line.

FYIDid you know

High employee satisfaction is only one reason behind employee retention. If your organization struggles with high turnover, check out our article on 12 reasons employees quit.

How to keep employees happy

So, if we all agree that keeping employees happy is important, how do we do it? The best way to keep employees throughout your organization content is to survey them regularly and act on their feedback. Here are some other 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.

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.

According to the Development Academy, more than 70% of those surveyed said feeling unappreciated is the biggest driver of employee dissatisfaction. It is important to recognize employees in both big and small ways to ensure they know you appreciate them. You can have a formalized employee recognition program, and encourage all staff levels to offer positive feedback to each other whenever possible.

Keep in mind that every employee has different criteria for feeling supported and praised. One of the worst mistakes that managers can make is to praise employees in the wrong “language.” Be sure to ask your employees how they like to be recognized.

TipBottom line

Employee recognition doesn’t have to break the bank. Check out these affordable employee recognition ideas.

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. In the Development Academy survey, more than half of workers claimed flexibility drives their satisfaction. 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.

4. Offer comprehensive salary and benefits.

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.

However, paying your employees what they are worth is important for employee happiness. 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 content, you need to give them the tools necessary to do their jobs. When they’ll be expected to use a new software system, offer training, manuals and time 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 personnel and the company at large.

As employees grow with your organization, you should offer career development opportunities so they can upskill and advance professionally. Learning and development are not only important for employee happiness, but also key to employee retention.

Margarita Hakobyan contributed to the writing and research in this article.

Skye Schooley
Staff Writer at
Skye Schooley is a human resources writer at and Business News Daily, where she has researched and written more than 300 articles on HR-focused topics including human resources operations, management leadership, and HR technology. In addition to researching and analyzing products and services that help business owners run a smoother human resources department, such as HR software, PEOs, HROs, employee monitoring software and time and attendance systems, Skye investigates and writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.
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