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The theory is that happy employees are productive and engaged employees. Recent global trends show that human capital will provide companies with the leading edge and will assist them to increase their overall bottom line. Can this be real and is it easy to achieve by just increasing our employees’ happiness? It is indeed that simple, but it isn’t as easy a task as it sounds. How do we go about measuring the Return on Investment of our people? If we decide to treat our employees as our biggest assets, how do we measure their increase in productivity, performance and engagement? What we need to know is how do happy employees contribute to the company’s bottom-line?

In an ideal world we could compare behaviour against quantitative measure but in reality various other non-related factors can get in the way. Imagine we are actively looking to grow the employee’s well-being levels and want to assess the ROI later. To determine the true financial return, the remaining activities in an organisation would have to completely stand still. That is, however, impossible because it would mean that sales, marketing and product development etc. all have to stop for us to determine that magical figure of ROI. However, we can convince a company that the following points have a significant impact on employee happiness and ROI:

Health 

Happy employees are healthier employees which means that they are sick less often and return to work sooner. This reduces an often under estimated cost of absenteeism.

Talent retention

Happy employees remain longer within companies because they build and master their competencies and skills. The retention reduces the recruitment, induction and training cost by a significant amount.

Engagement

Happy employees find intrinsic motivation in their work which makes them want to get more involved, participate more and there is an added interest in solving job challenges. Engagement boosts team morale and the willingness to take on more advanced job responsibility.

Innovation

Happy employees are automatically more creative and innovative in overcoming obstacles and solving challenges and applying their thoughts and coming up with novel ideas.

Meaning in work 

Happy employees find meaning in their work which means they identify with the work task and take personal ownership.

Team citizenship

Happy employees are eager to build strong reliable connections that boost team morale, support and trust. They look to have harmonious relationships and resolve conflict swiftly.

Customer satisfaction

Happier employees have an automatic contagious effect that filters through to them assisting clients often resulting in “going the extra mile”.

 

We might not necessarily see the tangible ROI on the bottom-line, but those points are priceless to our company, team and customers resulting in an automatic knock-on effect on sales, marketing, productivity and performance.