Most people in the world desire to be happy, but many factors of happiness are beyond our control and determined by our environment. One of these environments is our workplace. We spend about one third of our life at work! To truly enjoy that much time in the workplace, we need to be in a positive mood.

Much of our work environment is in the hands of the organization we work for. If the leadership of the organization has no clue how employees are feeling at work and what is driving their moods, engagement or wellbeing, it can be difficult to make changes and create a culture of employee happiness. So where to start as an employer?

In this blog you will read which personnel costs you can prevent through happy employees.

Start listening and keep listening

Employees who desire to be happy and healthy at work, are hopeful their organization cares enough to ask feedback regularly. Taking continuous measurements of workplace moods and what (de)motivates employees in the work environment, is better than just an annual sampling (either a performance review or employee satisfaction survey). Research findings strongly support this feeling.

But also in practice, a continuous feedback loop with employees appears to enable managers to respond to ‘people problems’ immediately, to see the impact of their solutions and to monitor long term trends. So why are we not taking these precautionary actions?

Research facts

    • An employee whose voice is heard at the workplace is 4.6 times more likely to give his best performance (Salesforce Research, 2017)
    • According to 92% of employees, a display of empathy is important for employee retention (Businessolver, 2019)

Employee Happiness brings success, start taking it seriously

There are many studies over the past 20 years demonstrating the correlation between happy and engaged employees and positive financial business results. Equally important however, is that happy employees also translate into other benefits such as lower turnover, increased innovation, lower absenteeism, less burnouts, better customer experience and a better employer reputation.

Research facts

    • Companies with engaged employees pull in 2.5 times more revenue compared to competitors with low engagement levels (Hay Group)
    • Organizations with happy and engaged employees unleash a 31% increase in productivity and 37% growth in sales success (Shawn Achor, 2011)

All these studies however, do not seem to be enough for organizations to focus more on employee happiness and measure it more frequently than once a year. To really change things up, it often takes a dramatic event such as key employees giving their notice to leave or getting a burnout, when it is actually too late.

Unhappy employees will leave you (with costs!)

Organizations will scramble to replace those employees, utilizing time and resources to recruit, off load the work, hire, onboard and train. Not to mention the other administrative costs and activities associated with employee turnover or long term sick leave.

Example of employee turnover costs

    • Research by SHRM suggests that replacement costs associated with employee turnover can be as high as 50% – 60% of an employee’s annual salary, with overall costs ranging anywhere from 90% – 200%. Let’s say an employee is earning $60,000 per year then it could cost an average of $30,000 – $45,000 to replace that employee.

Example of burnout costs

    • Let us take an example of a healthcare institution with 500 employees. In the Netherlands, 14,5% of employees in healthcare struggle with burnout symptoms. That is 72 employees in the example company. The average recovery period of a burnout is 8 months and average sick leave costs are $244 per working day. So when costs per month are $368, with 72 employees the costs can go up to $3,000,000.
    • And what if we view this from a savings perspective? Happy employees lead to 80% less burnouts. That reduces the number of employees with burnout symptoms in the example company to 15. Sick leave costs are now only $645,000 per year. If the employees in this company are happy then $2,355,000 can be saved.

For an even more convincing business case, think about your own employees and replace the numbers in these examples with figures or HR statistics from your own organization. Burn-out and turnover have a direct impact on the financial bottom line and every organization must deal with. A slight reduction in turnover or burnout rates can save organizations millions of Dollars!

Best practice: IT company retaining talent through feedback loop

At 2DAYSMOOD we help various organizations throughout the world in increasing happiness and reducing turnover in a short period of time. Organizations use our continuous measuring method and 15 second survey to keep in touch with their employees on a weekly basis. Via the online survey, anonymous feedback on employees’ moods and what drives their engagement is gathered and presented in real-time. The data is used as a means to encourage openness and understanding about difficult subjects. With that, leaders and teams can take targeted steps for improvement!

An IT company in the Netherlands started to use 2DAYSMOOD’s continuous measuring method. Through very simple actions and deriving awareness from the weekly survey and insights, the results began to improve quickly. The employees felt empowered since the first week of implementation as the organization asked each employee for feedback and how they felt at work every week.

‘This spawned open dialog on how the leadership could improve the working climate. And they did!’

Following the weekly mood report, each week there were also 10-minute department meetings discussing the results for both the department and the organization. This spawned open dialog on how the leadership could improve the working climate making certain changes. And they did!

The employees started to see and feel these changes and answered their surveys more positively. After a few months, positive trends and results in both their department and the entire organization were visible. After twelve months there was even a collective sense of organizational transformation. There were more smiles throughout the organization, and people were ‘’infecting’’ each other with positive energy.

‘The results were in and the company reduced turnover by 60% over the prior year…’

It was now time for the measurement event to review employee turnover compared to the previous year and the possible savings associated with workplace happiness. The results were in and the company reduced turnover by 60% over the prior year for a savings of $1.8 million!

As you can imagine, there were many celebrations throughout the company. But they were not just about the financial savings. We are all humans at the end of the day, we all want to feel important and make a difference. Thanks to the investments in happiness at work, a transformation took place at this IT company. A win-win situation for all leaders and employees!

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