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Why Employee Happiness Should Be a Priority for Every Business

A study conducted by the American Institute of Stress in 2019 shows that yearly, depression leads to $51 billion in costs because of absenteeism. Also, $23 billion is spent on treating depression annually.

Additionally, in a global happiness study, respondents say their jobs are their major source of happiness and pleasure. When an employee is happy, they give their all to the job. Therefore, any investment in the happiness of employees will not only benefit the staff but also the business.

This relationship between employee happiness and business growth is why prioritizing employee happiness has become necessary. Businesses are beginning to realize that their successes depend on how happy and satisfied their employees are with their jobs.

Apart from this obvious and general correlation between employee happiness and business growth, there are other specific ones. In this article, you’ll find out more reasons why investing in employees’ happiness should be a top priority for every business.

The Role of Performance Management Systems in Employee Happiness

To start on the journey of knowing why employee happiness should be prioritized in your business, you need a guide to performance management systems. Beyond the obvious role of reviewing annual performance, performance management (PM) systems also contribute to the satisfaction your employees get at work.


With an effective performance management system in place, business leaders become more invested in people management processes. These PM systems help to automate people management processes, leading to improved job satisfaction for staff.

A PM system assists you in creating agile processes that not only handle performance management but also improve employee development. Time management is another advantage you get from having a PM system in your business. The result is more effective business leadership, happier employees and a booming business.

5 Reasons Why Your Employees’ Happiness Should Be Prioritized

Reason 1: Happy employees have fewer absent days


If nothing else makes you want to prioritize your employees’ happiness, this should. As earlier stated in the report from the American Institute of Stress, when workers are depressed, they stay away from work and this costs both parties a fortune.

Unhappy employees don't feel like coming to work. This is understandable as people naturally stay away from environments that make them unhappy. When people are happy at work, they tend to spend more time there. Many people have reported that time speeds when they are doing the job they love.

When your employees put in the required hours at work (and even work extra hours when necessary), the business grows. On the flip side, when your staff stay away from work because they feel unsatisfied with the job, the business suffers. The only option for a forward-thinking business owner or manager is to make employee happiness a topmost priority.

Reason 2: Replacing employees costs more

If your employees stay unhappy for an extended period, they might eventually leave and this would harm your business and cost you more money. A 2017 report from Work Institute states that to replace an employee, the employer can spend up to 33% of their yearly salary.

From this report, we can see that it pays to invest in the happiness of your employees because failing to do that will result in spending more on employee replacement. Moreover, replacing staff frequently will set back your business tremendously. Your operations may have to slow down while you train new staff or you might place too much burden on other staff to fill in, making them also stressed and unhappy.

Reason 3: Happy employees are more productive

This is simply logical. When employees are satisfied and happy at work, their performance improves. Research has it that only 49% of American workers are very satisfied with their jobs. Others are barely satisfied and unsatisfied.


Satisfied and happy employees put in more time at work and generally perform better. If you have been having issues with employee productivity in your business, perhaps you need to look into employee happiness more critically. Ask yourself if your employees are truly happy to work for you or if they’re just hanging on until they get a better job that will bring them happiness.

The answers you get will show you the correlation between employee happiness and job performance. It will further show you areas you need to look into to make your staff happy. When you fix the loopholes, you will begin to see changes in your employees’ productivity.

Reason 4: Happiness is contagious


What happens when you enter a space and the aura is just so gloomy? You instantly begin to feel sad yourself. This is because our environment affects our mood enormously. When you’re in a happy and vibrant space, your mood catches the vibe and you become happy too. Likewise, when you’re in a sad or depressing environment, your mood reflects the aura.

When some workers are sad and lackluster, they infect other workers who are satisfied. Now, imagine working with colleagues who whine about how they hate their jobs every day. Chances are that you will start feeling dissatisfied with your job also.

When you work in such a gloomy atmosphere, where your colleagues are unhappy, you begin to detest going to work. Also, you won't be free to express your happiness so that you won't come off as insensitive. You love your job but the work ambiance will limit how you enjoy yourself at work.

Putting yourself in the shoes of your staff as illustrated above lets you see how important happiness is at the workplace. Making your employees happy should not be an afterthought. It should be at the top of your list.

Reason 5: Happy employees are creative

Creativity breeds in a serene and happy environment. Staff can only focus on bringing creativity to the job when they are happy. When your employees are satisfied and happy, they will begin to come up with innovative ideas to move the business forward. This creativity will ultimately lead to business growth.


On the other hand, the last thing on the minds of unhappy employees is creativity. This is not unexpected. Why would anyone want to be creative at a job they’re unhappy at and trying to ditch? Therefore, to bring out the creativity in your staff, do your best to invest in their happiness.

3 Practical Ways to Prioritize Employee Happiness

Create a conducive work environment

A conducive work environment makes your staff happy. Giving your employees all they need to perform well at their jobs is one way to make them happy. Your workers will be disgruntled if you expect them to deliver outstanding results without providing them with the right environment and tools.


Creativity and collaboration thrive in a conducive work environment. A worker is motivated to come to work when the workspace is well-furnished with modern office equipment. When workers have all the tools they need to be successful at work, they put in a hundred percent.

Providing a good work environment also gives you justification to ask for results. When you give too little and ask for too much, you put undue pressure on your staff and they will become unhappy. Creating a balance by providing the necessary environment needed to produce results makes them buckle up and deliver.

Invest in smart office technology

With the onset of the pandemic, many businesses have devised smart ways of working and making their staff happy. One such is by investing in smart office technology. Smart office technologies help in creating smart working spaces. Smart offices facilitate hybrid working and flexibility in the pandemic and post-pandemic era.

To create employee satisfaction in this era, you should consider investing in a smart office. To do this, you will need to put money into smart technologies. These technologies ensure that your staff has control over their working hours as well as access to in-office resources when they have to. Familiarize yourself with the trends in smart office technology so that you can make the right choices for your business.

Build a collaborative workspace with digital asset management

Making your employees happy in the pandemic and post-pandemic business era should be your priority. One way you can do this is by creating a collaborative workspace with digital asset management (DAM). With work becoming more digital and remote, creating a collaborative workspace has become even more important for productivity.

Due to the hybrid work mode that has come to stay since the pandemic, there has been a drop in the synergy at the workplace. Not being in the same space during all work hours has made collaboration more difficult for workers.

Digital asset management solves this problem by allowing you to facilitate better workflows and collaboration among your staff, leading to increased job satisfaction. To effectively execute this strategy, get deeper knowledge about how digital asset management can promote collaboration in your business. Your employees will thank you for it.


Wrapping up

You have learned many reasons why you should make employee happiness a priority in your business. When employees are happy, they take fewer days off, save you costs of replacement, perform better, infect others, and are more creative.

This article also broaches the role of performance management systems in employee happiness. To cap it up, you now know three practical ways you can prioritize your staff’s happiness. They include creating a conducive work environment, investing in smart office technologies, and building a collaborative workspace with digital asset management.


Moyofdae Ipadeola
Moyofade Ipadeola is a Content Strategist, UX Writer and Editor. Witty, she loves personal development and helping people grow. Mo, as she’s fondly called, is fascinated by all things tech.

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