What’s the ROI of employee happiness?

Suzanne Mancini

Employee happiness is a hot topic. Google it, and you’ll see a long list of results show up. Is employee happiness just a hype or is it actually paying off?

What’s the ROI of employee happiness?

According to Gea Peper and Heleen Mes at the HappinessBureau, there are many ways to define happiness in the workplace. One of them being employee happiness, which refers to an employee experiencing positive emotions and enjoying their job. Positive emotions come from, for example, the stimulation of personal development and the opportunity to put talents to use. According to Peper and Mes, employee happiness should be one of HR’s main priorities. They even predict a new role to be created, the Employee Happiness Expert. This expert is either a manager or a staff member, responsible for improving happiness in the workplace. This can be done through coaching, providing workshops about personal leadership or hosting inspirational get-togethers.

This new emphasize on happiness isn’t as crazy as it might sound. If we look at how different age-groups feel about employee happiness, we can see that the older generations are less concerned. They work to earn a living and happiness is a nice extra. Younger employees have a completely different idea about happiness though. They are looking for a satisfying job and an environment that supports personal development. For them, happiness in the workplace is increasingly becoming a basic condition. 

Four pillars

What exactly determines how happy you are at work? The PERK-model, developed by the University of Berkely, says there are four pillars: Purpose, Engagement, Resilience and Kindness. Does your job match your values and your view on life? Are you emotionally engaged with your job in a positive way? Can you deal with disappointments or hurdles? And, last but not least, how is the relationship with your colleagues?

As an employer, you can influence employee happiness! Often, it’s not a case of hard factors, like salary, benefits or a well-designed workspace. Soft factors are far more important, like autonomy, the right amount of responsibility, nice colleagues, a supportive manager and a healthy work-life balance. This is what makes people feel satisfied after a long day at work.

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How happy are Dutch employees ?

In a previous blog, we discussed how your job can contribute to your overall happiness in life. Research shows that employee happiness is given a 7.5 score by the Dutch, which is a little higher than the European average of 7.3. We also experience more autonomy, scoring a 7.4 compared to the European average of 6.9, and are not given more responsibility than we can handle, scoring a 7.5 compared to a 7.2 European average. This is probably also due to the open and informal Dutch workplace culture.

Asked to rate our colleagues, we give them a 7.0, which is the same as the European average. In comparison, our managers receive a slighty lower score though. On average, European managers score a 6.1, in Holland we rated them with a 6.2. If we take a closer look at work-life balance, our score is a 6.9 compared to the European 6.6. This is probably also due to our flexible working-hours, many options to work part-time and excellent parental/maternity leave.

What is the ROI of employee happiness?

So, we are doing quite a good job when it comes to employee happiness, but what is it doing for our business? The American employee happiness guru Jacob Morgan is convinced that more happiness means more profit. The research he did for his book “The Employee Experience Advantage: How to Win the War for Talent by Giving Employees the Workspaces They want, the Tools They Need, and a Culture They Can Celebrate” shows that organizations that invest in the employee experience, are four times more profitable and have a 40% lower employee turnover rate. In this video he explains this into further detail:

We have loads of tips and tricks to increase employee happiness. For instance, to provide more insight in the employee experience, we can measure your employees’ level of happiness with our feedback tools.

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