Are happy employees more productive? In the old days, employers never used to think about employee happiness or its connection to productivity in the workplace. But they eventually discovered that employee happiness is significantly intertwined with the productivity and success of their company. It still is true today.

Why Are Happy Employees More Productive in the Workplace?

Does Employee Happiness Have an Impact on Productivity?

“Happy employees are productive employees.” Forbes published the results from one study that revealed happy employees are as much as 20% more productive in the workplace than unhappy employees.

Employee happiness is a result of good health and wellness. Forbes published the following statistics from various sources, which shed light on the important connection between employee wellness and engagement:

  • Highly engaged teams are 21% more profitable for the company.
  • The top 20% of the most engaged teams showed a 59% reduction in turnover and a 41% reduction in the amount of absenteeism.
  • Approximately 89% of human resources leaders believe continuous peer review and feedback are vital to successful productivity.
  • American companies lose up to $550 billion per year because of disengaged employees.
  • 61% of employees feel burnt out and experience symptoms of depression, anger, anxiety, aches, fatigue, and other physical and mental health issues.

Company leaders must focus on the health, happiness, and wellbeing of their employees to increase productivity in the workplace. Otherwise, their company will eventually fail because its employees won’t be enthusiastic or engaged enough to make it succeed.

Company leaders must focus on the health, happiness, and wellbeing of their employees to increase productivity in the workplace.

RELATED: 10 Ways to Create a Productive Workforce in Your Organization

Why Are Happy Employees More Productive?

What is the connection between happy employees and workplace productivity? If employees are getting paid to work, why should it matter to their employer whether they’re happy? The answer is simple: employees are human beings.

Here are the top reasons why happy employees create a more productive workplace.

1) Company Loyalty and Low Turnover

Workplace productivity depends on sustaining a low turnover rate in the organization. Low turnover means that management doesn’t have to hire and train new employees regularly. If a company can retain its existing employees, it saves time and money.

Why Are Happy Employees More Productive?

Happy employees have no incentive to quit their jobs. If they feel good about their jobs or the circumstances of their work conditions, why would they want to leave? That is why turnover is low when employees are happy.

Low turnover affects workplace productivity in the following ways:

  • Work projects are completed faster
  • Work results are better, with fewer mistakes
  • Retain experienced employees
  • Builds employee loyalty and morale
  • Better trust and personal relationships with employees

Low turnover can save your company money from hiring and training new employees without knowing if they are truly suitable for their job positions. If you have loyal employees who want to stay with your company, you can direct more of your resources to grow your business rather than sustain it.

RELATED: Best Employee Retention Strategies to Reduce Labor Loss and Increase Loyalty

2) Accomplishes Short-Term and Long-Term Goals

You cannot sustain or increase productivity without setting goals for your employees. Setting short-term and long-term goals will keep them motivated to work hard as long as they are happy.

Make employees feel personally invested in your company’s success. They will feel happier and more valuable and it will compel them to work hard to accomplish your goals.  

Here is how setting goals creates happy employees and more productivity:

  • Increases cost and time efficiency
  • More profits and growth for the company
  • Fewer mistakes and unexpected expenses
  • Happier customers
  • Reduced stress and anxiety
  • Gives direction to the company

Find other ways to make employees happy at their jobs first. Then it will allow them to feel personally invested in your company’s success. Otherwise, they won’t have any reason to want to accomplish your goals.

RELATED: The Real Reason Companies With Happy Employees Succeed

3) Fewer Workers’ Compensation Claims and Sick Days

Workers’ compensation laws require employers to compensate workers who get disabled or injured while on the job. These injuries can include physical or mental health issues.

In Australia, roughly 10,000 workers’ compensation claims for psychological injuries get approved every year. About 75% of those claims result in employees taking over one week off from work. The total cost of these claims adds up to around $480 million.

Fewer Workers’ Compensation Claims and Sick Days

Workplace productivity can drastically suffer from lost work time and workers’ compensation expenses. So if you want to reduce the number of workers’ compensation claims and sick days in your organization, you need to find ways to keep your employees happy.

Here are some ways to improve the psychological health and happiness of your employees:

  • Stress Management Programs
  • Time Management Programs
  • Workplace Flexibility
  • Other Mental Health-Related Wellness Programs

Every job has different levels of psychological challenges. For this reason, employers must establish the best mental health and wellness programs to address the specific psychological challenges facing their employees.  

Related: Employee Health Programs Worth Investing In

4) Better Customer Service

Customer service has a significant impact on the success of a company. Happy and cheerful employees give an excellent impression to customers before, during, and after their interactions and communications. Great impressions create a positive customer experience and will often lead to repeat business in the future.

Happy employees are more productive by providing better customer service. Here is how:

  • Saying “hello” to customers and clients as they enter the commercial facility.
  • Maintaining a positive attitude, even when customers are rude or negative.
  • Answering customer questions clearly and uncritically.
  • Offering helpful information without overselling or putting too much sales pressure on customers.
  • Prioritizing customers and their needs above anything else.
  • Following up with customers after a sale to answer their questions or address their concerns.

Happy employees create customer productivity, which measures the amount of customer satisfaction derived from workplace productivity.

RELATED: 9 Workplace Well-Being Activities to Skyrocket Employee Productivity

5) Happy Employees Makes Coworkers Happy

Have you ever felt better when collaborating with a happy or cheerful person? If so, why not encourage more collaboration in the workplace between happy and unhappy workers?

Happiness can be infectious to people who may not be so happy. So if you have a few happy employees in your workplace, their influence could help other employees become more cheerful.

Happy Employees Makes Coworkers Happy

Happy employees are more productive by influencing their coworkers in these ways:

  • Boosts energy, confidence, and excitement
  • Encourages productive teamwork and social encounters
  • Reduces stress and depression
  • Improves morale
  • Reduces turnover

Assigning teams is critical to increasing workplace productivity in this way. Evaluate each employee’s happiness level and then assign seemingly happy employees to unhappy employees. Within a few weeks, you should see significant improvement in the unhappy employees’ attitude and work performance.

RELATED: The Real Reason Companies With Happy Employees Succeed

What Makes Employees Happy?

Company employers and managers are constantly trying to find new ways to make employees happier. Creating a healthy and safe work environment is a significant first step.

Here are some of the best ways to make your employees happier at work.

1) Wellness Programs

Employee wellness programs focus on improving and sustaining the health, wellness, productivity, and happiness of employees. They are customized to address their primary health challenges inside and outside the workplace, such as lack of exercise, depression, poor food choices, etc.

The most popular employee wellness programs include:

  • Smoking Cessation Programs
  • Stress Management Activities
  • On-site Fitness or Gym Facility
  • Nutritious Cafeteria Food
  • Employee Training Programs
  • Wellness Consulting
  • Personal Training
  • Financial & Retirement Planning

Wellness programs help employees feel happy, confident, and enthusiastic. If you can keep supporting this effort by creating and improving effective employee wellness programs, your workplace productivity will continue to increase.

If you can keep creating and improving effective employee wellness programs, your workplace productivity will continue to increase.

RELATED: The Correlation Between Wellness Programs and Increasing Productivity in the Workplace

2) Provide Training and Education

Employees are happy when they feel confident and satisfied with their work. If you provide training and continuing education opportunities to your employees, they will be more motivated and capable of doing a good job.

Here are the reasons why training your employees will make them happier and productive:

  • Enhances employee skills and knowledge
  • Gives employees more opportunities for promotions and greater responsibilities
  • Positive feedback on employee evaluations
  • Employees feel valued
  • Reduces wasted time and supervision
  • Boosts morale
  • Better organizational structure
  • Better use of technology
  • Better customer feedback

All of these benefits of employee training add up to one thing: productivity. Happy and knowledgeable employees will boost productivity on so many different levels. It won’t take you long to see a return on investment from your employee training programs.  

3) Create an Attractive Work Environment

No one can be happy in a dull or ugly work environment. If employees have to stare at solid white-colored walls and window blinds for 8+ hours per day, they will go crazy. Remember, your employees are human beings and not machines.

better work environment for keeping happy employees more productive

An attractive and visually-pleasing work environment can make your employees feel happier, more productive and less depressed. If their work environment doesn’t make them feel like they’re at work, they may feel more comfortable with their surroundings.

Here are some ways you can improve the aesthetics of your workplace to increase employee happiness:

  • Adding indoor plants can reduce psychological and physiological stress on employees, especially those who are younger adults.
  • Repaint the walls with more vibrant and tropical colors.
  • Hang creative artwork on the walls.
  • Add more window space with no blinds or curtains.
  • Allow more natural lighting inside
  • Add new and stylish furniture

It doesn’t take too much time or money to enhance the appearance of your workplace. You can execute most of these ideas on a limited budget.  

RELATED: 7 Reasons Every Worksite Should Offer An Environmental Wellness Program

4) Rewards and Gifts for Employees

Recognizing and rewarding employees for their hard work is how you keep them working hard. When you show gratitude to your employees for their accomplishments in the workplace, they will be happy to know that you value and appreciate their efforts. As a result, they won’t slow down anytime soon.

Saying “thank you” to hard-working employees is one way to show your gratitude. However, employees respond better to praise when it comes in the form of a reward or gift. If your employees see you invested money in buying a gift, they will have a better sense of your appreciation for them.

If your employees see you invested money in buying a gift, they will have a better sense of your appreciation for them.

Here are some gift ideas for making your employees happier and incentivizing them to be more productive:

  • Vacation Getaways
  • Gym Memberships
  • Smart Watches
  • Exclusive Parking Spaces
  • Gift Cards
  • Personal Training Sessions
  • Water Bottles

Use your creativity when choosing rewards and gifts for your employees. Just make sure they are wellness gifts that can enhance their health and wellbeing.

RELATED: 10 Employee Wellness Gifts to Incentivize Healthy Behavior in the Workplace

5) Workplace Flexibility

According to a ManpowerGroup Solutions study, roughly 40% of global job candidates claimed schedule flexibility was one of their three primary considerations for choosing a career.

A less restrictive work environment gives employees the freedom to work in a way that makes them happy and productive. They don’t have to worry about getting in trouble for being two minutes late or not dressing a certain way. It also gives them more time to spend with their families.

Workplace flexibility is about:

  • Letting employees set their work schedules
  • Allowing employees to work from home or remotely
  • Encouraging a casual dress code

The benefits of workplace flexibility include:

  • Happier employees
  • Low turnover and high retention
  • Better productivity
  • Attracts skilled and talented employees
  • Improves diversity
  • Increases productivity
  • Better employee engagement
  • Reduced overhead expenses
  • Promotes eco-friendliness by reducing travel and commutes

Certain work environments may require employees to abide by specific standards regarding schedules, dress codes, etc. Therefore, use these tips as they can be applied to your company.

RELATED: 6 Strategies for Successful Wellness with Remote Workers

6) Employee Feedback and Suggestions

Employees want to have a valuable voice in the company. You can give them such a voice by allowing them to submit feedback and suggestions about their jobs and the workplace.

employee feedback

There are two ways to execute an employee feedback system. One way is to allow anonymous suggestions to be submitted in a drop box. Another way is to have one-on-one meetings with each employee, where you discuss their opinions about their job.

Employee feedback will:

  • Reduce the number of disgruntled employees
  • Allow you to improve their working conditions and address their needs
  • Keep employees engaged and focused
  • Give employees a chance to contribute new ideas to the company and watch them get executed.

If your employees know they can tell you their ideas and concerns without retaliation, they will feel happier and more comfortable at their jobs. Those happy employees will be more productive as a result.

To Conclude

Happy employees are more productive. But don’t assume employees will become happier on their own. Instead, create a work environment to support their health and wellness both inside and outside the workplace.  

The path to employee happiness is never a straight line. Every organization may need to create a unique plan for improving employee health, wellness, and happiness. If the plan is successful, high productivity will be the final result.

Would you like to learn how to make happy and more productive employees in the workplace? Schedule a free demo with our WellSteps team to get started.  

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About The Author

Dr. Steve Aldana

Dr. Aldana is the CEO of Wellsteps, a worksite wellness solution that leads the nation in wellness program deployment and engagement. Dr. Aldana authored over 75 scientific papers and 7 books on health risk management, healthy living, and health promotion programs. He has given over 350 keynote speeches across the U.S. on the ability of good nutrition and regular exercise to prevent, arrest, and reverse many chronic diseases.