Why do we need happy employees?

In courtesy of Pixabay
photo: pixabay.com

Should companies have happy employees working for them or should they keep their people a bit unhappy so that they’d contribute more?

Well, my vision is that we need happy employees.

I conducted a small research on the internet and here are my findings on why we need to keep our people happy!


Happy employees are more creative and are better at solving problems

Shawn Achor has found that the brain works much better when a person is feeling positive. At those times, individuals tend to be more creative and better at solving problems. They claim that brain, works better when you’re feeling positive, so developing a sunny outlook allows being smarter and more creative. “We found that optimism is the greatest predictor of entrepreneurial success because it allows your brain to perceive more possibilities,” said Achor. “Only 25 percent of job success is based upon IQ. Seventy-five percent is about how your brain believes your behavior matters, connects to other people and manages stress.”

I agree with Achor 100%. Some people constantly find reasons why something won’t work instead of trying to find ways how to make it work.  And therefore people with a more positive attitude really tend to be more successful in their lives. Take Richard Branson for instance.


Happy employees are less sick

Research shows that happy employees take less sick days (an average of 15 days less per year), they have a better immune system and they cope better with viruses.

Sickness is quite costly for companies. Let’s take firstly direct costs that are related to sickness. For instance, it is required by law for employers to compensate (partly or fully) employees sickness lists. But there are also indirect costs related to sickness: such as those related to replacement of sick ones. When your people are sick you need to find a replacement for them.  Yes, it could be that you do not need to hire extra people to do the job, but your current employees won’t be happy with the decision to fill in for sick ones with no extra compensation. So to keep them happy you either need to pay them more or give them some time off from work.

Also, you shouldn’t forget about other downsides related with sicknesses, such as delay of important projects when you lack manpower as well as unhappy customers and partners who (sometimes) need to deal with an incompetent replacement.


Happy employees are more engaged

With happy employees, companies have lower employee turnover

And engaged employees also are more likely to stay with their employers. According to this Gallup study, for instance, in high-turnover organizations (who have an annual turnover of 40% or more), highly engaged business units achieve 24% lower turnover. In low-turnover organizations (who have an annual turnover of 40% and less), the gains are even more drastic: highly engaged business units achieve 59% lower turnover.

Employee turnover is costly. It could cost you up to 400% of employee’s annual salary. For instance, for entry-level employees, it can cost between 30-50 percent of their annual salary to replace them. For mid-level employees, it can cost upwards of 150 percent of their annual salary to replace them. For high-level or highly specialized employees, you could look at 400 percent of their annual salary.

So why is employee turnover so costly? Well, let’s start from recruitment, selection, and training of new hire – there are several direct and indirect costs (such as job adverts, salaries of interviewers, induction training, etc.) related to hiring. But hiring is not the only cost. You should also consider lost opportunity costs as well as dissatisfied customers who see an inconsistency in service quality etc.


Happy employees have fewer safety incidents

Studies show that engaged employees have fewer safety incidents. Since happy employees are the ones that are engaged, then this rule clearly applies to them as well.

For instance, this one study found that the most engaged organizations have 41% fewer safety incidents (i.e. falls, medical errors, infection rates, and risk-adjusted mortality rates). If employees are not engaged, they are less focused on their work and more likely to make mistakes. Which also could mean a loss of productivity.


Happy employees are more productive

Economists carried out a number of experiments to test the idea that happy employees work harder. In the laboratory, they found happiness made people around 12% more productive. Dr. Daniel Sgroiwho was involved in leading research at University of Warwick concluded: “the driving force seems to be that happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality.”

I would say that it is clear: when the person is unhappy, then he/she is probably not so committed to the employer as well as their job. Lack of commitment causes more mistakes (and we know how costly they can be) – a person just doesn’t have a passion for performance anymore and doesn’t care about the results as we’d need and want.


So based on this I will conclude the following: there are several positive effects in having a happy workforce. But how to achieve that? Well, stay tuned because my next post is exactly about that! 🙂


Want to make me happy? Well, comment and share my posts! 🙂


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  1. Thank you for this post. It’s very important to understand why some companies have low turnover. Unfortunatelly they are momentan the minority.


  2. Individuals want to be responsible for and own their personal Happiness at Work. They know that it belongs to them and not their managers.
    Now this is typically very different from employee engagement which is generally owned by managers who are responsible for their teams’ annual scores.


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