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Employee happiness: Why it matters and how to get started

Business person working at office desk showing employee happiness


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As a small business owner, your common sense will tell you that having happy employees is better than having unhappy ones. But did you know that research backs up that theory? 

Here are just five reasons to keep workers happy. Happy employees are:

  1. More productive
  2. Less likely to take sick days
  3. More engaged in their work
  4. More likely to stay with your company
  5. More likely to help you attract other good employees

Let’s unpack these benefits a bit.

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Top benefits of happy employees 

1. Happy employees are more productive

A study by the University of Warwick found that happy workers are 12% more productive than their unhappy counterparts. The study also found that happy workers are less likely to take sick days and are more engaged in their work.

Employee productivity is key to the success of any business. You can generate more revenue with a happier workforce.

2. Happy employees are less likely to take sick days

Sick days can be costly for businesses. Analysis from Integrated Benefits Institute found that lost productivity from illness-related employee absences totaled almost 1.5 billion days annually for all employees and cost employers $3,900 per employee. 

What’s the connection between those costs and employee happiness? When unhappiness increases, so do sick days taken. Workers who report being happy take 10X fewer sick days than unhappy employees. 

3. Happy employees are more engaged in their work

Although happy employees aren’t necessarily engaged employees, a connection between happiness and engagement does exist. Happy employees contribute to a better workplace culture, which in turn contributes to higher levels of employee engagement and lower levels of burnout

HBR notes: “Decades of data have confirmed that higher employee engagement, or the strength of the mental and emotional connection an employee feels toward their workplace, has many positive benefits — including reduced stress, improved health and job satisfaction, as well as increased productivity, job retention, and profitability.”

4. Happy employees improve retention

Losing an employee costs a company on average 1.5 to 2 times the employee’s salary. The good news is that happy employees are less likely to leave their jobs. As happiness increases, the number of employees who leave their organization typically decreases.

Bonusly research found that 82% of employees believe that being recognized at work contributed to their happiness, and that happiness translated into staying longer with their employers, with 63% of those who receive regular recognition reporting that they are “very unlikely” to seek a new job in the next 3-6 months. 

When happy employees stay with an organization, the business can save money on recruitment and employee training and avoid the negative consequences of high turnover rates, such as decreased productivity and poor employee morale.

5. Happy employees attract better talent

Employees are a company’s most important asset. Happy employees are more likely to attract top talent, meaning that businesses can benefit from better-quality employees. In addition, businesses can save money on recruiting and training new employees when happy employees act as brand ambassadors for the organization.

keeping your employees and customers happy -- happy employee
The secret to keeping your employees and customers happy

8 ways to increase employee happiness

So, how can you increase employee happiness? Here are eight tips:

  1. Create a positive work environment
  2. Encourage social interaction
  3. Give employees flexible work arrangements
  4. Offer financial incentives
  5. Give your employees a voice
  6. Provide training and resources
  7. Deliver clear expectations
  8. Learn what happiness means to them

Create a positive work environment

A positive work environment is key to a happy workforce. Employees need to feel appreciated and respected to be happy at work. Make sure that your employees feel like they are part of a team and that their opinions are valued.

There are many different ways for an employer to foster this kind of company culture, including:

  • Celebrating individual accomplishments
  • Providing regular feedback
  • Having an open-door policy

Happy employees also create a more positive work environment, and can help with employee retention and attracting top talent.

💡 Pro-tip:

RingCentral’s collaboration tools can foster communication between employees, helping them to engage further and remain happier.

Encourage social interaction

Social interaction is key to happiness. Encourage your employees to get to know each other outside of work. This can be done by organizing team-building exercises or by providing a place for employees to socialize.

Communications tools, like RingCentral, can help employees stay connected, even when they’re not in the office. Employees can easily connect with each other through chat, team messaging, voice, and video calls.

Unlimited team messaging gif

Give employees flexible work arrangements

Flexible work arrangements often lead to happier employees. Allowing employees to work from home or take breaks during the day can help them feel more in control of their lives.

Many employers offer flexible work arrangements. However, some employees may be afraid to ask for them. If you’re an employer, make sure that your employees know that you’re flexible and that they can come to you with any concerns they have. These arrangements offer a work-life balance that’s key for happy workers.

RingCentral supports businesses with flexible work arrangements by providing a variety of communications tools that employees can use from anywhere. This helps employees stay connected and productive, even when they’re not in the office.

person riding bicycle work from anywhere
Work from anywhere: two small business success stories

Offer financial incentives

Financial incentives are a great way to encourage employee happiness. Cash bonuses, paid vacations, gym memberships, retail discounts, and 401k contributions are just a few of the employee incentives that employers can offer.

Offering a variety of financial and non-financial incentives is a great way to encourage employee happiness.

Give your employees a voice

Employees who feel like they have a voice in the workplace are happier than those who don’t. Allowing employees to contribute to decision-making can help them feel like their opinions matter.

Giving employees a voice can be done in many different ways, such as through surveys, focus groups, or town hall meetings. Allow your employees to share their thoughts and opinions, and you’ll build trust and create a better workplace culture.

Provide training and resources

Employees who are well-trained and well-resourced are happier than those who aren’t. Make sure that your employees have the tools they need to do their jobs. This includes providing them with appropriate technology and training them on how to use it.

It’s human nature to want to continually improve and grow. Providing employees with the tools they need to grow will help them to remain happy at work. Keep your employees engaged by providing them with regular training and resources, along with opportunities for growth. For instance, you can provide them with books, online courses, and a high-quality podcast which they can listen to while working.

Recognizing the unique skills of your workforce and investing in those skills produces happy workers and increases your company’s return on investment for every single person you hire.

Mentoring and team building are just a couple of ideas to encourage your employees to grow alongside their team members.

Deliver clear expectations

Employees need to know what’s expected of them to be happy at work. Make sure that your expectations are clear and concise. This includes setting goals for your employees and making sure they understand the company’s mission and vision.

If employees don’t know what’s expected of them, they’ll become frustrated and unhappy. Deliver clear expectations to your employees and you’ll see a boost in morale and productivity.

Learn what happiness means to them

Each employee has their own definition of happiness. Learn what makes your employees happy and try to incorporate these things into the workplace.

This can be done by conducting employee surveys or focus groups to find out what makes your employees happy. Once you know what employees need and want, you can start to implement these things into the workplace.

It’s also important to engage with your employees on a regular basis and ask how you can better support them. Happiness is very personal, and what makes one employee happy won’t necessarily be true for others.

Bridging human connections: How employees are staying connected at work
Bridging human connections: How employees are staying connected at work

Start boosting employee happiness

Employee happiness is important for a number of reasons. Happy employees are more productive, have lower turnover rates, and are less likely to get sick.

There are many things employers can do to create a happy workplace. Some of these things include offering flexible work arrangements, financial incentives, and giving employees a voice. Employers should also make sure that they deliver clear expectations and provide training and resources to their employees. By doing these things, employers can create a happy and productive workplace, showing their employees that they truly care.

RingCentral’s all-in-one cloud-based communications solution offers employers a better way to keep employees connected and engaged. RingCentral makes connected communications possible with phone, messaging, videoconferencing, fax, SMS, and more all in one app. 

Are you ready to support your employees’ happiness with a best-of-breed communications solution? Get a demo of RingCentral today!

Originally published Mar 29, 2022, updated Dec 30, 2022

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