You will be shocked to see the ROI of Happy Employee over Unhappy Employee.

All human pursuits ultimately culminate in the pursuit of this applies to every walk of life including work life.

Hence it is not surprising that every study has been revealing that people stick longer to workplaces where Employee Happiness is a cultural aspect.

People also work harder, smarter, and together when they are happy.

While Happiness is an end in itself, it also makes business sense to invest money, time, and effort in trying to enhance happiness at the workplace to reap numerous benefits.

The benefits of a happy workplace are both intangible and tangible.

Higher Enthusiasm, Enhanced Teamwork, Emotional connection with the organization and colleagues are some of the intangible benefits that result from enhanced Happiness at the Workplace.

Following is a conservative estimate of the ROI of Happy Employees, which summarises Tangible Benefits.

These numbers have been extracted from various studies conducted across the world in the last few years and have been financially adjusted to suit Indian conditions:

Average Annual Salary of employees (Rs.) in C3 300000
Estimated Possible Cost of One Unhappy Employee
10% less Productivity than an average employee -30000
Turnover - Conservative 50% of salary -150000
Emotionally Contagious (sadness) ( 5 emps/one hour per day) -187500
Poor Customer Service ( 25% admit to taking frustration out on Customers, assuming 25% of them are customer facing) -187500
Difficulty to recruit ( diminished Employer Brand) 20% -60000
Decrease quality of work by 38% -186000
Higher absenteesm, health care cost, unsafe incidents) average cost is considered as 20K per employee -30000
Estimated Possible Benefit of One happy Employee (Rs)
50% higher Productivity than an average employee 150000
14% better customer service and 89% better customer satisfaction 267000
Emotionally Contagious joy ( 5 emps/1 hour per day) 187500
Creativity, innovation, quality of work - 30% 90000
Easier to recruit ( Enhanced Employer Brand) 20% 60000
Fewer Errors - 26% Fewer 15000
Lower Absenteeism, lower Healthcare Cost - 41% Lower (Avg. cost estimated at INR 20,000 per employee) 8200

The Research: Value of Happy Employees

The productivity loss of one unhappy employee who makes USD 65000 is USD 75 per week or USD 3900 per year. Source: Thomas Wright, Jon Wefald Leadership Chain in Business Administration and Professor of Management at Kansas State University.

Happy workers are 12 percent more productive than average while unhappy workers are 10 percent less productive than average. Source: Andrew Oswald, a Professor of Economics at Warwick Business School.

Employees in highly participative work climates provided 14 percent better customer service, committed 26 percent fewer clinical errors, demonstrated 79 percent lower burnout, and felt a 61 percent lower likelihood of leaving the organization than employees in more authoritarian work climates. Source: Angermeier, Dunford, Boss & Boss: Journal of Healthcare Management.

Higher workplace engagement leads to 41 percent lower absenteeism, 58 percent fewer safety incidents, and 40 percent fewer quality defects. Source: Gallup “The relationship between Engagement at work and Organisational Outcomes” 2016 Q12 Meta-Analysis: Ninth Edition. Correlation between customer satisfaction and company culture is so strong that the difference in revenue between salespeople in strong and weak company cultures was 30 percent. Source: Lindsay McGregor and Neel Doshi, Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation.

The likelihood of job turnover at an organization with rich company culture is a mere 13.9 percent, whereas the probability of job turnover in poor company cultures is 48.4 percent. Source: Elizabeth Medina Columbia University Study “Job Satisfaction and Employee Turnover Intention: What does Organisational Culture Have to do with it?”

High engagement and enablement improve employee performance by 50 percent, reduce employee turnover by 54 percent, increase customer satisfaction rates by 89 percent, and increase five-year revenue growth by 450 percent. Source: Kornferry Hay Group “Real World Leadership “Global Study 2015.

Workers who are on the receiving end of incivility decrease their work effort by 48 percent, quality of work by 38 percent, and commitment to organisation by 78 percent. 25 percent admitted to taking their frustration out on customers. Source: Professors Christine Porath and Christine Pearson. “The Price of Incivility” in Harvard Business Review 2013.

The cost of turnover is 6-9 months salary of that employee. Source: Society for Human Resources Management.

Your brain at positive is 31 percent more productive than your brain at negative, neutral, or stressed. You’re 37 percent better at sales. Source: Shawn Achor, author of The Happiness Advantage.

Research has long shown emotions are contagious. Source: Susan Weinschenk, Ph. D, “Emotions are Contagious” in Psychology Today 2016 The most important factor is workplace culture. Source: LinkedIn’s Talent Trends 2014 report.