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The Happiness Formula for Business Success

Austin Mac Nab
Austin Mac Nab

Employee happiness is linked to customer satisfaction, which, in turn, is linked to business success. Translation: Employee happiness is the formula that drives business success.

One of the basic tenants for running a successful business is to be laser-focused on the customer experience. However, customer experience is only part of the equation. Organizations of all sizes are finding that employee experience has a significant impact on customer satisfaction. Business leaders can create a positive work environment that boosts employee satisfaction by focusing on creating a positive company culture, prioritizing employee engagement, encouraging communication and collaboration, and recognizing and rewarding good work.

Business leaders can develop a winning formula for building a positive work environment in four ways.

Create a positive company culture

Company culture, which is often defined as the set of shared values, goals, attitudes, and practices that characterize an organization, plays a key role in employee happiness. A positive work culture is one in which employees value their work and feel that their employers value them.

Company culture is a business asset that can drive company success. Research by Deloitte found that 94% of executives and 88% of employees believe a positive corporate culture is an essential part of a company's success.

One way to create a positive company culture is through a family atmosphere. Often companies that foster a culture where employees are welcomed with open arms, open minds and open hearts find it creates a rallying point for everyone in the company.

At VizyPay, this family atmosphere extends beyond just the office walls. Senior leadership aims to hold employees accountable at a level that impacts them both on a personal and professional level. The team believes firmly in helping employees succeed within the office, as well as at home. By building a positive work culture, it can trickle positively into personal lives as well. It is important for employees to know and understand the company culture and core values. With this understanding, employees feel united in a common purpose, which boosts job satisfaction and increases employee retention.

According to a Glassdoor survey, having a compelling mission, culture, and values are critical when it comes to attracting and retaining top talent. The survey found that 56% of employees consider company culture more important than salary when it comes to job satisfaction. The survey also revealed that millennials, the largest generation in the workforce, are more likely to place culture above salary.

Prioritize employee engagement

Engaged employees are happier employees who deliver better customer service, go the extra mile and are committed to improving their organizations. According to Gallup employees with higher levels of engagement:

  • Produce substantially better outcomes
  • Treat customers better and attract new ones
  • Remain with their organization
  • Are healthier and less likely to experience burnout

Business leaders can increase engagement through company events and activities that create opportunities for employees to interact with each other and build strong relationships. For example, hosting employee engagement activities like organizing potlucks and impromptu breakfasts provides employees with opportunities to get to know one another as the company continues to grow. Furthermore, establishing a "giving back" committee to enable employees to work together and engage with the community can encourage team bonding as well. 

Encourage communication and collaboration

Creating a positive working environment also involves encouraging communication and collaboration. An open-door policy helps keep communication flowing. Keeping doors to management open to encourage employees to provide feedback, ask questions or simply have a conversation, helps strengthen their tie to the company. 

Another way for senior leadership to connect with employees is by finding a weekly or monthly time to get lunch or a coffee with an employee individually to get to know them on a personal level. This helps them feel closer to the company and drives the idea of what leadership can do for employees, not what employees can do for the company. Making it a priority to engage with all employees, not just managers, drives further commitment as well.

In fact, data from IBM revealed that 83% of employees have a more positive work experience when they feel their ideas and suggestions matter. Consider creating committees within the company to help drive these efforts. For example, a team-building committee can encourage collaboration to create a positive work experience that increases cohesion and helps employees relate better to one another.

Recognize and reward good work

Recognizing and rewarding good work is one of the most important ways businesses can create a positive work environment that boosts employee happiness. A positive work environment is one that shows employees appreciation for jobs well done.

A simple "thank you" or "great job" can go a long way toward showing employees that their hard work is noticed and appreciated. This recognition can yield significant business benefits in the form of increased employee engagement, loyalty, productivity and retention. A study by RewardGateway found that 54% of the workforce in the U.K., U.S. and Australia feel their boss could do more to show their appreciation to employees. The study also found that 59% of workers would rather work for on a business with a culture where they received recognition compared to a job with a higher salary where they didn't receive any recognition, and nearly half of employees would leave a company if they didn't receive recognition.

One way to recognize employees and ensure they know they are valued and appreciated is by holding parties throughout the year to celebrate and give back to company staff.  Providing food, drinks, and entertainment and even branded company merchandise for attendees such as shirts, hats, tumblers, and bags are ways to create a fun atmosphere. These high-energy events are easily scalable and geared toward making sure employees have opportunities to relax, feel appreciated and get to know coworkers from other departments. 

The case for focusing on employee experience

The strong connection between happy employees and happy customers is revealed in a 2019 Glassdoor Economic Research Report. The report found that companies with happy employees are more likely to have high customer satisfaction scores compared to their counterparts. For each one-star improvement in an employer's Glassdoor company rating (with a total of five stars being possible), there was an associated 1.3-point increase in customer satisfaction (out of a possible total of 100). The report concluded that there was a clear overall link between satisfied employees and happy customers.

Happiness also makes people more productive at work. Researchers at the University of Warwick conducted a number of experiments to test the idea that happy employees work harder. The study found that happier workers were 12% more productive. One researcher noted that happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality. Productive employees are often more responsive to customer needs and requests, which has direct implications for increasing customer satisfaction.

The link between employee happiness and customer satisfaction has bottom-line impacts for businesses. Consider that:

  • 55% of consumers are willing to pay more for a guaranteed good customer experience.
  • It is anywhere from five to 25 times more expensive to acquire a new customer than it is to keep a current one.
  • Customers who had a very good experience are 3.5 times more likely to repurchase an item and are five times more likely to recommend the company to friends and relatives than if they had a poor experience.
  • Increasing customer retention rates by 5% increases profits by 25% to 95%.
  • Happy salespeople can improve their closing rates by 37%.
  • Unhappy employees can cost a company $390,000 in lost productivity.

Business leaders have some work to do when it comes to providing employees with a more positive, rewarding experience. Workplace culture consulting firm Great Places to Work surveyed 3.4 million employees in 90 countries to gather data on work experiences. The survey reported that about half of employees worldwide don't have a great workplace experience, resulting in "unhappiness, lower business performance and wasted human potential on a planetary scale."

The level of employee happiness is directly linked to customer satisfaction, which is directly linked to business success. Translation: Employee happiness is the formula that drives business success.

Austin Mac Nab
Austin Mac Nab Member
Austin Mac Nab is CEO, co-founder and executive leader of VizyPay, a West Des Moines, Iowa-based provider of payment technology solutions for businesses across the U.S. Mac Nab has been in this role since April 2017 when he co-founded the company.