As an employer, you’ve probably experienced employees having a bad day. At least you hope it’s just a bad day and not simply the way they spend one day after another in order to earn a living. Either way, the mood they projected was sure to have rubbed off on you. It probably lived in your head for quite some time.
It doesn’t take much for an unhappy employee to bring a customer down. We’ve all had experiences like an eye roll during an order for an oat-milk-decaf-coffee, or a pinched mouth and heavy sigh when you say you’d like to think about the fifth pair of shoes you’ve just tried on. And when you’re trapped with someone for a while – like a taxi driver, hairdresser or tradesperson at your home – the negative stories about their job, employer and other customers can really start to flow.
But you can also strike the complete opposite – someone who looks you in the eye, smiles, genuinely enquires about your day and lets you know how much they’re enjoying theirs. All this while they quickly and efficiently get on with what you’ve asked them to do. Chances are they’re in much the same job as the unhappy worker who hauled dark clouds over your day. But for some reason they clearly love their work and get a real kick out of making sure you have a surprisingly delightful experience.
The importance of employee happiness is quite widely understood for customer-facing roles. But its link to the customer experience and a company’s success is often overlooked when it comes to other roles at all levels of the organisation.
In the rush to improve cost efficiencies and profitability, longer-term investments in things like leadership training, culture and employee recognition can be seen as ‘nice-to-haves’. There’s plenty of talk about implementing them when budgets allow, but they often gather dust in the waiting room – despite the substantial cost efficiencies and extra profitability they could provide.
To help you get started on treating employees as your top asset, here are five of the main reasons successful organisations prioritise investment in employee happiness.
1. Happy employees are more productive
When employees feel valued and happy, they genuinely care about customers and the company’s success. They’re more invested in their work. They’re motivated to do it really well, look for improvement opportunities and want to fix things that go wrong rather than let them keep happening because it’s ‘not their job’. In short, happy employees go the extra mile and can even be less worried about how much they’re earning, because being at work is rewarding in itself.
2. A happy workforce attracts better applicants
Top performers can pick and choose the jobs they apply for. They want to choose an organisation that’s aligned to their values and will make them happy. Their job research is sure to prioritise that all important question, ‘what’s it like to work there?. If the answer is ‘they’re all about making a quick buck by cutting corners and don’t really care about people’ they’re not going to apply. And the organisation will never know they missed out, let alone why.
But when employees are happy, they love responding to that social question, ‘how’s work?’. They happily go on about the amazing company they work for, the way they look after people, how great their products and services are, the talented people that work there and how they’re completely outdoing the competition.
3. Happy employees reduce turnover costs
Happy employees are less likely to leave, which saves a lot of money because the true cost of replacing an employee is estimated to be around twice their annual salary. Here’s why losing a valuable employee is so expensive:
The general decline in morale and productivity
When someone leaves, others tend to disengage to some degree. They may wonder whether they should consider doing the same, thinking “perhaps this place isn’t that great, maybe I could do much better elsewhere”. Morale drops, and with it goes productivity. Pretty soon you may have to offer unsettled employees a pay increase, just to stop them leaving.
When someone leaves, their replacement seldom starts right away – particularly in times of high employment. That means others have to pick up the slack. They either cut back on their normal work, lower standards to rush things through, or become overworked and stressed (which can cause them to start looking for another job).
Time and money spent on recruitment
Advertising, interviewing and on-boarding new people takes time, takes managers and HR specialists away from other work, and costs money. It can take months to find a suitable replacement.
Low return while coming up to speed
New employees take quite some time to reach full productivity. They have learn what’s involved in their role and how things get done within the organisation. They might also have some capability gaps that need to be addressed with job shadowing, mentoring or external training.
4. Happy employees boost your brand
The employment reputation of any organisation is in the hands of its employees. Beyond the direct employee-customer interactions, every employee is part of the rumour mill that runs out through your local communities. They can either boost or undermine your organisation’s reputation through that most trusted of channels, word-of-mouth. And the only way to be sure they’ll champion your reputation, products and services is to make sure they’re happily employed.
5. Happy employees are the foundation for profit and growth
In the 1990s, researchers from Harvard University developed a theory and business model known as the ‘service-profit chain’. It was described in the Harvard Business Review as follows: “Profit and growth are stimulated primarily by customer loyalty. Loyalty is a direct result of customer satisfaction. Satisfaction is largely influenced by the value of services provided to customers. Value is created by satisfied, loyal, and productive employees.”
According to the service-profit chain, employee satisfaction comes primarily from high-quality support services and policies that enable employees to deliver results to customers. These typically include:
· Employee selection and development
· Employee rewards and recognition
· Tools for serving customers
· Workplace design
· Job design
It’s important to note that the employees referred to in the service-profit chain are not just customer-facing people, but everyone in the organisation. Their happiness affects their satisfaction loyalty and productivity, and therefore the profit and growth of the organisation.