top of page

The Link Between Employee Happiness and Profitability

It is obvious that there is a strong correlation between the satisfaction levels of employees in the workplace and the company’s culture, overall productivity, turnover, and ultimately profitability. However, regardless of its importance, companies still do not prioritise investing in workplace culture to combat the issues that it could have on the company.

We look at the statistics below from the State of the American Workplace 2013 Gallup Study to prove the impact of workplace happiness on companies:


The workplace that is plagued with chronically low levels of engagement where research shows than 7 out of 10 US workers do not work to their full potential. That is definitely a large ratio in the workplace and as a result, this costs the US between $450 - $550 billion each year. Furthermore, research by the Dale Carnegie Institute, identified that 80 percent of employees unhappy with their supervisors claim that they are disengaged and less productive.

Employee Turnover

A study by Leadership IQ shows that 46% of new employees were either fired or quit within 18 months before they are out the door again and searching for another job – most likely finding a job with a better working culture as study shows that 89% of these failures are due to poor culture fit. Turnover also decreased as 87% of engaged employees are less likely to leave.


Accordingly, this loss of employees means loss in revenue and profitability. Society for Human Resource Management estimates that turnover costs are often 100%-300% of the base salary of the replaced employee.

Financially, companies with highly engaged employees experience 19.2% improvement in operating income from the previous year and 147% higher earnings per share.

Companies were majority of employees were disengaged saw their operating income decreased by 32.7% within the same period and an average of 3% lower earnings per share.


According to Chatroop, ‘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.’

Importance of investing in Company Culture

It is evident that the importance of investing in company culture can lead to improvement in employee satisfaction and workplace happiness. According to Chatroop’s article, engaged employees perform 20% better than disengaged employees and 202% companies with engaged employees outperform up to 202% better.

So how can you incorporate, maintain and ensure there is Workplace Happiness?

  • Screening Process during the Interview Stage

Ensuring that the potential employee has the right work culture fit will help eliminate employee disengagement in the short or long term. Many HR departments are paying particular attention to the screening process to ensure that the right candidate will fit into the company culture.

67% of workers believe that the most important aspect of a job is to have an employer with similar values.

  • Acknowledge an Employee’s Accomplishments

According to Workforce Mood Tracker Survey, 69% of employees have said that they would work harder f a company recognised their achievements. It is particularly important to continually acknowledge their accomplishments- whether it is big or small, as this shows your appreciation for their hard work and contributes to their personal intrinsic value.

  • Encourage the work/life balance in the workplace

According to Net Impact, 88% of workers value work and life balance and a positive culture as the most essential to the job. It is important to ensure that this is communicated to the employees as it shows that you care about the employee’s personal needs.

  • Focus on their individual strengths

Focusing on an employees’ individual strengths can lead to an increase in the number of satisfied, happy employees whilst also eliminating disengagement.

  • Encourage workplace friendships

Cultivating workplace friendships is also important. A study from Jobsite UK investigates that 70% of employees having friends in a workplace is crucial to a happy work life. Companies can encourage workplace friendships by having weekly events outside of work or even in the office occasionally.

  • Develop Company Wide Volunteer Initiatives

Volunteer programs that the company endorses have shown to contribute to a positive workplace. According to Chatroop, 93% of employees who volunteer with their company also report being happy and 54% of those who are proud of the company’s contributions to society are engaged at work.

Therefore, creating a positive corporate culture or workplace is vital to ensuring that employees are satisfied. Although it may be costly in respect of time and finances to invest in creating this corporate culture, as proven by these statistics, the payback can definitely be invaluable.



We would love to hear your thoughts! Please leave your comment below.

Featured Posts
Recent Posts
bottom of page