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Why Employee Happiness is Essential

When you’ve put in the hard work to build a team of employees that’s motivated, skilled, and collaborative, it can seem like you’ve accomplished your most important task. But one essential element of creating a productive and engaged team is often overlooked, and that’s employee happiness. It’s a powerful driver of many of the essential elements of your business and can mean the difference between a successful or struggling company. 

Productivity and Profit

Happy employees are up to 20% more productive than unhappy ones. People are willing to work hard and achieve more with their time when they have a good experience as an employee. And that’s reflected in company profits as well. Higher profits are also correlated with higher employee happiness. Treating your employees well isn’t just the right thing to do – it’s also good business sense. 


Replacing employees when they leave your business is an expensive proposition. It can cost between one-half to twice an employee’s annual salary to replace a single worker. And the time you need to spend recruiting, hiring, and training a new employee is significant as well. Employees who stay with your business for years or even decades build and share valuable institutional knowledge that helps your business run smoothly. 

Some turnover is to be expected in even a healthy organization. But your retention rates will be higher, and your retention efforts easier, when you make employee happiness a high priority. Unhappy employees, on the other hand, are likely to jump ship as soon as another offer comes along. 

Employee Engagement

Highly engaged employees are a powerful force for good in your business. Employee happiness and engagement aren’t quite the same. Employees can be happy in their workplaces and roles but not particularly dedicated to them. However, unhappy employees certainly aren’t likely to be engaged. 

And since disengaged employees cost U.S. businesses up to $550 billion per year, employee happiness is an element of engagement you can’t afford to ignore. Ensuring employee happiness is a priority in your organization is essential to your efforts to raise and sustain engagement rates. 

Customer Satisfaction

Happy employees don’t just make your workplace pleasant for their fellow workers, they also deliver a better customer experience. Every one-star improvement in a company’s Glassdoor ranking increased customer satisfaction scores by 1.3 out of 100. Happy and highly engaged employees are more likely to go above and beyond to deliver great service and experiences to customers, which in turn makes customers happier and more loyal. 

It makes sense. It’s easy to tell when you enter a shop or visit a business if their employees are unhappy and putting in the bare minimum, or if they genuinely enjoy their jobs and delight in providing excellent customer experiences. 

Employment Brand

Hiring the right people for your business is always a challenging endeavor, and in a tight labor market, it’s even more difficult. Attracting the top performers in your field who have plenty of employment options is easier if you have a strong employment brand. And developing a strong employment brand can’t be done successfully if your employees are unhappy. 

When candidates come in for visits or interviews and meet happy employees, they receive a positive impression of your business. But if they hear through connections that the bulk of your workforce is unhappy and dissatisfied with their workplace experience, that hurts your hiring efforts.  

Prioritizing Employee Happiness

The happiness of your employees should be a vital focus for your business. Not only because creating a happy workplace is the right thing to do, but also because it makes your business more successful and profitable. 

Looking for help hiring employees who will stay motivated and engaged in their roles? Reach out to Cangrade to learn more.