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When looking for ways to boost the bottom line, businesses usually look for shortcuts—apps that automatically do work for you, or techniques to upsell your way to the top. But as in life, there are no shortcuts to the ultimate work hack—happiness.
On an individual level, there may be no better way to be more productive than being happy. When people feel engaged and passionate about their work, they work harder, faster, better. We’ve known this, intrinsically, forever. But science backs up our intuition.
A study at the University of Warwick found that happiness make people about 12% more productive. In this context, the driver of this productivity increase (according to research leader Daniel Sgroi) is “happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality.”
That’s an excellent, and measurable, outcome. But what is less definable is the idea of “happiness.” It’s a subjective term, and it’s not clear how we as people, much less as workers or employees, can achieve this state of mind.
So, let’s examine how happiness affects the workplace and explore what both businesses and employees can do to make their work life a happy experience—and, by extension, a more productive one.
Happy: You know it when you see it or feel it. But how do you define it in a workplace setting?
One measurement is engagement, meaning a psychological commitment and ability to make positive contributions. A Gallup poll with over 73,000 respondents from a few years ago puts worldwide employee engagement at a mere 13%.
On the other hand, 63% of the poll participants were “not engaged”—they were not motivated to work or invest themselves in outcomes. And another 24% said they were “actively disengaged,” which means they were unhappy and could spread that unhappiness to others.
Another way to measure happiness in the workplace is through turnover rate, with the understanding that people tend not to leave jobs where they feel happy. Businesses that appear on Fortune’s list of the 100 Best Companies to Work For typically have a lower employee turnover rate than other companies in their industry. For example, information technology companies on the Fortune list have a voluntary turnover rate of 5.9%, compared to 14.4% industry-wide.
The cost of employee turnover is high: Some estimates put replacing a salaried employee at 6-9 months’ salary on average. Replacing highly educated executive positions can cost up to 213% of annual salary. The costs of retaining these employees, keeping them engaged and positive, are far outweighed by the costs of constantly seeking replacements for actively disengaged workers.
Unengaged employees aren’t just more likely to leave a company—they tend to do less work overall, costing their business in the long run even if they stay. The U.S. as a whole loses $450-$550 billion a year thanks to disinterested and discontented employees, according to a State of the American Workplace report by Gallup.
Suffice to say, unhappiness is expensive. Conversely, happiness turns a profit. Research shows the brain works better when people are in a good mood and that happy employees are better collaborators and more innovative.
So, if happiness is a productivity hack—some have called it “the ultimate productivity booster”—how can businesses foster a happy environment?
Here’s the first tip: It doesn’t involve hiring clowns. Clowns can be kind of creepy.
But companies that don’t have the enormous resources of corporate giants like Google (read: most of them) often question how much they can afford to spend on employee happiness. Are catered lunches enough? How about in-office childcare? An expansive benefits package?
The answer doesn’t necessarily lie in giving employees more money. In a ranking of the Best Small and Medium Workplaces, employees were 10 times more likely to call their workplace “great” when they thought their leaders were honest and ethical. But they were just twice as likely to say the same when they felt positively about their pay, perks, and training opportunities.
So, happiness isn’t (only) about padded paychecks or large investments in trendy perks. It’s also about respecting and appreciating the company culture, which doesn’t always require a monetary commitment.
Here are a few ways to build a culture that earns the respect of employees:
Some of these things depend on employees to communicate their needs clearly with their employers. That’s something that millennials, for example, have no problem doing: That generation says that they need more transparent and continuous communication with their superiors (rather than a more traditional annual review) or they’ll be gone within the next year or two.
Some aspects of work life will make anybody feel demotivated and unhappy, from sitting down most hours of the day to the stresses of making deadlines. Encouraging employees to take active steps in improving their mental health and outlook on the job can do wonders.
The steps can be simple: Engage in some positive exercises throughout the workday, such as jotting down three things you’re thankful for or writing a positive message to a coworker or peer. Commit to a few minutes of meditation or exercise throughout the day to keep your body and mind focused on work when actually “working.” Find and encourage social support among your team, since low social support can be as damaging to health as high blood pressure.
That last point is perhaps the most important, as we’ve already noted that peer relationships within an organization matter more to overall happiness than manager-to-employee relationships. According to a report from Harvard Business Review: “the correlation between happiness and Zimet’s social support scale (the academic measure we used to assess students’ positive engagement with their social networks) was a whopping .71—for comparison, the correlation between smoking and cancer is .37.”
So employee happiness isn’t just about creating an environment in which people can happily get through the day—but hiring, training, retaining, and promoting people who can thrive in your environment.
One more thing about happy companies: They make for happier customers. Customer service representatives who are happy represent their brand better than those who aren’t (as many a cable-company customer service horror story can tell you).
It’s not just about customer service either. Creatella CEO Guy Brockless says that after sharing their employee satisfaction data publicly with customers—including telling customers that they had helped create jobs and improved the quality of the company’s work by employing them—they saw record-high referral rates and responses of positive comments.
In this case, being happy was its own reward.
There is no magic formula for happiness, as virtually any human being alive can tell you. But there are definite ways to create a happy environment where workers can thrive, and as a result the company will be more productive and profitable.
If you’re worried about your business’ bottom line, consider examining your workplace culture first. The answer could be as simple as making people smile.