Happiness at work is trendy right now. It is trendy to post images from an office with bean bag chairs and a pool table. It is trendy to share the pictures from a company holiday party or a lunch with the team. It is trendy to tell everyone on LinkedIn how much you care about your employees, their happiness, growth, and work-life balance.
Of course, any good leader cares about their employees’ wellbeing and wants all of these things for them.
However, happiness at work is not just a nice thought or something you should talk about because it’s trendy. As an organization, there is another crucial reason on why you should be concerned about your employees’ happiness and wellbeing: your bottom line. If your employees are happy and healthy, it has a direct impact on your company’s results. Here is how:
Cost Savings Related to Absences
It has been demonstrated in several studies that employee wellbeing leads to savings in costs related to absences and sicknesses. For example, a study done by researchers at the Harvard University and Harvard Medical School found that every dollar spent on employee wellness programs generated approximately $3 savings in medical costs and absenteeism costs.
It makes sense, when your employees are physically AND mentally healthy, they are going to need less sick leaves. Obviously, everyone catches a cold every so often, it is inevitable. But there are other times when this could be avoided. You should for example pay attention to physical ergonomics and the strain that work puts on the employees’ bodies (think reducing the negative impact of sitting down in an office job and the physical strain in industrial jobs). Also, find ways to reduce stress and improve mental wellbeing at the workplace (equally important to all employees across positions and industries).
Reduced Turnover Rates
Employee wellbeing helps save on costs related to employee turnover. If your employees are happy, they undoubtedly stay with your organization longer. High employee turnover is a huge red flag indicating that something is wrong.
Anyone who has ever lost a team member knows that turnover is expensive. According to the Society for Human Resource Management (SHRM), the direct cost associated to replacing a departing employee can reach 50%-60% of their annual salary and the total cost associated to the departure can be even higher, 90%-200% of the annual salary. These numbers include not only the obvious costs such as recruiting and training a replacement but also a lot of hidden costs. These can be for example losing clients and partners, delays in deliveries, and a lot of information getting lost or falling through the cracks when it doesn’t all get transferred over.
Happy employees are more productive than unhappy employees and they also serve customers better which leads to higher customer satisfaction and more sales in the future. I bet you have personally experienced this feeling at least once in your life: if you enjoy what you are doing, who you are doing it with, and where you are doing it, you are more likely to go the extra mile and be happy while doing it. If you are unhappy, on the other hand, your energy goes into “surviving” and you might not have any left for doing extra.
You may also have experienced this as a customer. Near my apartment building, there are two grocery stores. Essentially, both stores have the same products and same price range but I prefer going to one more than the other. Why? Because the staff is consistently friendlier. And I would bet the reason behind it is because one of the places is doing things better when it comes employee wellbeing.
Employee wellbeing shouldn’t be seen as a cost but rather an investment because helps you save money on costs related to absenteeism, sickness, and employee turnover. It also leads to increased productivity and better customer experience. In fact, by investing in employee wellbeing you are likely to save and make more than what you spend.