As shown in our previous blogpost, happy employees are rare. Worldwide only 13% of employees are engaged with their work. This alarming amount of engagement is a personal waste. The fact that people don’t feel happy and connected should be enough reason to change the way we work. But what makes the change even more obvious are the positive effects of a happier and more engaged workforce. In this blogpost, we’ll amaze you with the positive effects of having happy employees.
“The results are inevitable. Happy employees make companies succeed.”
As you will agree, you feel more productive and successful when working on something you really like. Whether it’s an exciting task at work or arranging that weekend getaway for your friends, your intrinsic motivation will make you want to achieve success and go the extra mile. On the other hand, when your motivation is not there, you feel like procrastinating is the way to go. The same mechanisms are present in organizations. As you can imagine, this will have a major effect. If only 13% of us is engaged at work, it means there is a huge amount of untapped potential waiting to be spent on more meaningful tasks.
Happy employees create success
Let’s start with the negative effects of unhappy employees on organizational parameters. Studies of Queens School of Business and Gallup have recently been quoted in an article of the Harvard Business Review. It is shown that disengaged workers are accountable for 18% lower productivity and 16% lower profitability. At the same time, they account for 49% more work-related accidents and 37% higher absenteeism.
Similar results are shown in studies that focus on the positive effects of happy employees. For decades, pioneers have created thriving workplaces where authenticity, passion, purpose and happiness are the drivers for success. It not only makes everyone happy, it also has a very positive effect on the productivity, innovation, sales and social value of organizations. The gathered evidence is striking and abundant. Research studies by the Hay Group, Martin Seligman and Gallup have shown that engaged and happy workers are accountable for 43% more productivity, 37% higher sales, 51% less employee turnover and 43% fewer sick leave days.
These insights and numbers are not revolutionary. It is surprising to see that when we were still babies, similar conclusions were already drawn. Strangely, not much has happened or changed over all these years. The website ConnectingHappinessAndSuccess.com lists a range of historical but illustrative studies. The list showed that happy employees…
- …are a good predictor of job performance (Wright & Cropanzano, 2000, Hom & Arbuckle, 1988);
- …receive more positive evaluations from superiors (Cropanzano & Wright, 1999; Wright & Staw, 1999);
- …set higher goals for themselves (Baron, 1990; Hom & Arbuckle, 1988);
- …are 47% more productive and 25% more effective than less happy employees (Jessica Pryce-Jones);
- …go the extra mile, beyond what is expected of their role (Baron et al., 1992).
These findings are amplified by anecdotal evidence of the pioneering companies that we will be visiting soon. For example, one of the most well known examples: Semco. It’s a company focused on increasing their success by increasing the happiness of their employees. Chuck Blakeman describes the success of Semco in his mindblowing TED talk. He illustrates the astonishing 10 year results of the Brazilian company. Over a 10 year period, Semco has achieved a 500% profit growth, 600% revenue growth and 700% productivity growth. Even more remarkable is the low employee turnover. Semco enjoyed a 2% employee turnover compared to an industry average of nearly 20%. This clearly shows that Semco’s happy employees are driving the company’s success.
Another extraordinary example can be found in The Netherlands. Buurtzorg is a non-profit health care organization based on self-management principles. Buurtzorg was founded in 2006 and currently employs around 10.000 (!) nurses. None of the 10.000 employees is a manager or a boss. Its structure is completely based on self managing teams of 10-12 nurses, who take care of all tasks within their neighborhood. Their results have been amazing: they have built their client base in less than 10 years from 0 in 2006 to 70.000 in 2015. They have achieved a revenue growth of 350% over the last 5 years with a profit rate of 8%. This is even more remarkable when you realize it is a non-profit organization. Within the 8 years of its existence, Buurtzorg has taken up more than 60% market share. It is exemplary that the sickness rate of Buurtzorg nurses is reported to be a low 3%, where the average sickness rate of the competitors lies around 7%.
The combination of research and examples shows that companies which have successfully implemented happiness are outperforming their competitors. Their practices based on a combination of meaningful work, self-management, and employee engagement have, time and time again, proven to be successful.
Attracting top talent
Another major advantage that these successful companies have: access to top talent. Now, and especially in the future, top talent is scarce and companies face fierce competition on the job market. A recent survey conducted by ManpowerGroup showed more than one in three (35%) reported difficulty filling positions as a result of a lack of suitable candidates. Combine that with the fact that culture and engagement are already the most pressing issues companies face around the world. Deloitte reports that 87% of the organizations cite culture and engagement as one of their top challenges. This issue will become only more pressing in times when cultures and work experiences become more and more transparent.
Think for example of networking tools like Glassdoor, Facebook, Twitter, LinkedIn and other social media platforms. Because of these tools, companies will be constantly reviewed, compared and openly judged. Detailed information about organizational models and company cultures will be available to everyone. Potential employees will be able to familiarize themselves with deep insights about their future employer and will choose upon information available. This will shift the power balance from employer to employee, making the will and desire of the employee much stronger.
The results are inevitable. Happy employees make companies do better. It is time that more companies start adopting practices to increase their employees’ happiness. Imagine what that could look like. Your friends, family, colleagues; everyone around you is fully inspired at work. Everyone contributes to something they fully believe in. Imagine how that effect could spread across all aspects of life in all parts of the world.
A complete organizational transition has to be the next step in the evolution of organizations. It is time that we move away from traditional organizational values, structures and processes. It will be necessary to radically change the internal and external views on organizations. We need a step-by-step approach that leads to a more happy working environment. The approach has to proof highly successful in a broad range of organizations. From big to small, from service to education, and from health care to manufacturing. We all need to move more and more towards new ways of working. By doing that, we can create a happier world for all of us.