Workplace Happiness: The High Cost of Unhappy Employees

July 31, 2016


According to the State of the American Workplace, a 2013 Gallup study, seven out of 10 workers in the U.S. say they aren’t fully engaged at work, meaning they aren’t working to their fullest potential. The resulting loss of productivity can cost companies between $450-$500 billion a year. Plus, according to research by the Dale Carnegie Institute, 80 percent of employees who aren’t happy with their supervisors claim that they’re disengaged and, ultimately, less productive.

Likewise, a study by Leadership IQ shows that 46 percent of new hires quit or are fired within their first 18 months on the job, with 89 percent leaving because they’re not a good fit in the company’s culture. Lost employees means lost revenue, and the Society for Human Resource Management (SHRM) estimates that turnover costs can be as high as 100-300 percent of the departed employee’s base salary.

On the flip side, SHRM reports that satisfied employees perform an average of 20 percent better than their dissatisfied counterparts.

In addition, they’re 87 percent less likely to change companies. Likewise, the Dale Carnegie Institute has found that companies with engaged, satisfied employees may outperform their competitors by as much as 202 percent. The Harvard Business Review also chimes in with statistics that contented employees have 31 percent higher productivity, generate 37 percent more sales, and are three times more creative than their disengaged counterparts. The good news? Not everyone is unhappy with their career or workplace. According to Gallup, 30 million employees say that they’re both happy and engaged at their jobs. Not surprisingly, studies show that these satisfied employees display the most entrepreneurial energy and also come up with the most innovative ideas. A happy employee is also a healthy one, which means lower healthcare costs. Gallup found that the top 25 percent engaged workers had 50 percent fewer accidents, as well as significantly lower health costs.

As companies search for ways to build a happier work environment, many HR departments are paying more attention to the screening process, making sure that new hires will fit into the company culture. In the mean time, it doesn’t take an infographic to figure out that employees need to feel appreciated – in a Workforce Mood Tracker survey, 69 percent of employees have said that they’ll work harder for a company that recognizes their achievements.

Savvy employers are also paying attention to their employees personal needs. For example, Net Impact found that 88 percent of employees polled believe it’s crucial to have a healthy work/life balance, as well as a positive atmosphere in the workplace. In addition, in a study from Jobsite UK, 70 percent of polled employees say that cultivating friendships at work generates a positive influence on their productivity and happiness.

Finally, according to research from Gallup, managers and supervisors would do well to focus on their employees’ individual strengths, as this can ultimately double the number of satisfied, happy employees.

What does all of this say about employee morale and how it affects productivity? Plenty, according to the statistics. That’s why savvy business owners are paying more attention to the concept of creating a corporate culture/ workplace climate that’s conducive to overall employee satisfaction. Implementing these changes may cost a bit more time and money, but according to the wealth of research being done, the payback can be invaluable, not just in terms of employee retention, but also productivity and earnings.

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