January 23, 2022

What is the financial impact of happiness at work?

Written exclusively for the Cornerstone Community by Ivan Palomino - Learning and Behavioral Strategist & Founder of PeopleKult, and Co-Founder of Bessern

At some point in our life – we have all felt completely drained and exasperated at work. Whether it was because we felt overwhelmed by continuous demands and expectations or by a sense that we were going the extra mile without recognition. The truth is that all of these can make us quite unhappy and not exactly motivated to reach our workplace with a smile on our faces.

Often, the lack of happiness has, as a consequence, increased presenteeism – which is simply the fact of showing up at work without being at the best of our physical or mental levels (basically being at the office without being really productive). If you haven’t heard about this word – here are some numbers that you will not forget: in a country like the UK, the level of presenteeism in 2021 is 83% (vs 24% in 2010), and it has a cost for corporations of close to 800 USD per employee per year.

What is happiness at work?

Happiness is a sense of wellbeing, joy or contentment. When people are successful, safe, or lucky, they feel happy [1].

In this sense, we define happiness at work in a similar way, as the overall sense of satisfaction, engagement, joy, and recognition that employees experience at their position within an organization.

Employee’s happiness is a crucial ingredient for organizational and business success. Happiness in the workplace can be achieved when we find joy doing the job assigned to us, in an environment of trust, where we can broaden our skill sets, feeling recognized and satisfied with the financial (or sometimes non-financial) benefits we receive.

What happens when employees are happy: 

·       Companies with happy employees outperform the competition by 20%

·       Happy employees are 12% more productive

·       Happy sales people produce 37% greater sales

·       Employees who report being happy at work take 10X fewer sick days than unhappy employees

Happier employees experience higher productivity through intrinsic engagement and are more open to collaborative projects. This enhances creativity and efficiency, which should positively affect the bottom line.

How can you increase happiness in your organizations?

The Nordic countries have the highest rate of satisfaction at work – they even have a word for it: Arbejdsglæde (a very Danish word for joy or satisfaction at work). Here are some pointers on how to define the impact of Arbejdsglæde:

·      Research shows that companies with happy employees do 2x better on their business results;

·      Arbejdsglæde is one of the three most important sources of life satisfaction: the other two are good relationships and close friendships;

·      Arbejdsglæde is one of the best cures for stress. Stress does not necessarily come from working too much, but from feeling bad while working;

·      The biggest sources of lack of Arbejdsglæde are trust, lack of recognition, lack of support from our manager;

·      Arbejdsglæde does not come from salary, bonuses, titles or perks. It comes from two things: Results - i.e. to do a good job that you can be proud of and        

·      Relationships - to feel good about the people you work with.

A great place to start is by placing value on your employees’ capacity to learn and develop.

It is never too late to start making happiness a core value, whether on an organizational or individual level. For starters:

·      Make the commitment to your employees’ wellbeing and encourage a culture where employees feel empowered to take ownership of their career growth;

·      Allow for time and resources for reflection and fun;

·      Understand what your team triggers of motivation are;

·      Encourage psychological safety where your employees feel vulnerable and safe to voice their opinions without judgement.

Organizations who invest in the happiness of their employees will set themselves apart from the rest and attract new and great talent. By offering meaningful personal and professional development (and, most importantly, practice), your employees will feel satisfaction and fulfilment at work. We are always happier when we grow as a people.

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