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6 Benefits of Having Happy Employees in Your Organization

May 15, 2023

Is it still true that happiness is directly associated with the productivity of organizations? An Oxford University study found that employees are 13% more productive when happy. This study suggests that employees perform better when recognized, feel valued at work, are heard, and, most importantly, are satisfied with their work.

In what way do you benefit from having happy employees? Here we list the key benefits of having happy employees in your organization. 


Benefits of Happy Employees

Let us explore some of the major benefits of having happy employees.


1. Happy Employees Are More Productive

According to the American Psychological Association, happy people tend to have better critical thinking, better problem solving skills, and make few mistakes.

Happiness gives a sense of rest within an individual, enabling them to easily process tasks and problems and develop working solutions. Also, happy employees are more likely to stay focused on their work. 


2. Happy Employees Take Fewer Days Off

Employees who are happy are more likely to show up for work than unhappy peers. This is because they have found a sense of purpose and meaning in their work. 

In fact, according to Gallup's report, a happy and engaged workforce shows an 81% difference in absenteeism and a 14% difference in productivity. Unhappy employees tend to become exhausted and drained from work, whereas happy employees are energized by the work they do.

Engaged and happy factory employees

3. Happy Employees Have Strong Peer-to-Peer Relationships

According to a survey by Jobsite, 70% of participants reported that they would be happier at work if they had friends at work.

In the survey, participants even went so far to say that salary is less important than having friends at work, and they would reject a higher job offer for friends. While this might sound hard to believe, research shows that employees with work friends are happier and seven times more engaged with their work.


4. Happy Employees Stay Longer

David C. Wyld conducted a study for three years in an organization to find the reason for the voluntary turnover of employees. His findings suggested that stronger emotional ties to an organization significantly lessen employees' voluntary attrition.

Therefore, organizations that promote employee engagement and recognition programs to create a happy working environment tend to retain employees.


5. Happy Employees Serve Customers Better 

The key to customer satisfaction actually lies with employee satisfaction. Happy and engaged employees are more likely to go above and beyond for clients, leading to more happy customers. 

Research on telesales workers and their performance shows that employee happiness positively impacts sales performance, increasing productivity within their scheduled work hours. As previously mentioned, happiness impacts every business outcome and acts as the fuel for success.


6. Happier Employees Show Greater Commitment 

In Wrike’s research, 70% of happier employees show a strong connection with the mission and vision of their organization. Conversely, 37% of unhappy employees don’t show affinity to their organization’s mission.

Happier employees are more engaged in team activities and programs conducted in the workplace. This increases trust and boosts confidence, motivating employees to accomplish business goals.

Factors Affecting Employee Happiness

As an employer, you can't be entirely responsible for your employees' happiness. But you are responsible for taking the necessary measures within your power to ensure their wellbeing. 

For example:

  • A negative workplace culture affects employees' happiness. According to research, 1 in 5 (20%) workers say they work in a toxic environment. Work culture has much to do with employee wellbeing; you can see its ripple effects on organizational benefits.
  • Some employees believe that isolation makes them more productive. However, lack of friendship and employee engagement in the workplace majorly affects productivity. A survey by WeWork in the U.S. and Europe found that 70% of employees are more satisfied with their work when offered opportunities to collaborate with clients and coworkers.
  • The average turnover rate of employees across all industries in 2022 was 9.31%. When surveyed, 50% of employees reported pay and employee benefits as their primary motivation to quit. The survey portrayed that misalignment in management (between managers and employees), flexibility in work hours, and pay are the central issues in the employee turnover rate.


What do these numbers suggest? If you want an excellent organizational culture and a positive work environment, certain measures need to be taken from the organization’s end. 

If you are unsure about your employees’ wellbeing status, conduct an employee engagement survey or ask for feedback. 

  • Have multiple check-ins with employees to understand their pain points
  • Appreciate and recognize their efforts and performance
  • Promote growth opportunities
  • Consider offering flexible work hours (if possible)
  • Offer reasonable pay


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Frequently Asked Questions

1. How well do happy employees perform at work?

According to scientific research on ‘Happiness and Productivity’ by colleagues at Warwick University, happiness improves productivity by 10-12%. Similarly, low happiness correlates with lower productivity.


2. What are the ways to keep employees happy?

Employees tend to perform better when: 

  • Recognized for their performance
  • Offered flexible work hours
  • In collaboration programs
  • Rewarded
  • Given growth opportunities
  • Trusted
  • Health and employee wellness is prioritized 


3. Is happiness a driving factor for employee engagement?

Happiness has a direct impact on the wellbeing of employees. It boosts their confidence to engage with others, better deal with adversity, and engage in team-building activities. Happy employees are more innovative, creative, analytical, and efficient than unhappy peers.


The Bottom Line

There is no doubt that happiness is key to an organization's overall success, and we research agrees. Success doesn’t bring happiness. Instead, happiness is the fuel to success. 

Create a positive work environment with Terryberry. We offer employee wellness programs, corporate wellness activities, and employee recognition programs to ensure employee happiness.

Get started today.


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