Happiness is a feeling, so this means that it is not constant. Being happy today doesn’t guarantee happiness tomorrow. It is something that we have to work on every day.

The same applies to happiness at work. But, what is happiness at work? Dacher Keltner and Emiliana Simon-Thomas defined Happiness at Work as:

“Happiness at work involves an overall sense of enjoyment, feeling intrinsically driven to make progress towards goals and knowing “that what we do matters at work.””

Promoting happiness at work is great for employees. However, it also brings many different benefits for the companies! Here we will share 5 reasons why companies should invest to promote happiness in the workplace!


Happier organizations bring higher returns to shareholders

Alex Edmans’, professor of finance at London Business School, study showed that the 100 best companies to work for in the United States brought higher returns for their shareholders when compared to their peers. The return difference varied between 2% and 3% per year, over a 26 year period!


Happier employees are more engaged with the company, hence are more productive

Gallup’s 2017 report, “State of the Global Workplace”, showed that business units in the top quartile of their global employee engagement are 17% more productive and 21% more profitable than those in the fourth quartile. The same report, however, showed that in Portugal only 16% of employees are engaged with their work (in the USA, this number is 33%), and 14% reply being actively disengaged with their work.


Happier employees are more willing to stay in the same company

One of the reasons why companies should invest in their employees’ happiness is to guarantee they will stay longer in the company. A study done by Thomas Wright and Douglas Bonnet in 2007 showed that increasing employees’ happiness of just one point can double their willingness to stay in the company. This also represents a reduction in costs, as a report by Gallup called “The Economics of Wellbeing” showed that increasing employees’ happiness can reduce turnover cost up to 52% – including, for example, less hiring and onboarding costs.


Happier employees result in lower healthcare costs

Different studies have proven that healthier people perform better. However, the same Gallup`s report, “The Economics of Wellbeing” showed that happier companies have up to 62% less health care costs when compared to unhappier companies.


Happier organizations are more innovative

A couple of articles on the Journal of Corporate Finance from 2016 wrote that friendlier workplaces tend to, not just invest more on innovation, but achieve higher success. However, what is the consequence of having a more innovative company? An MIT Sloan study analyzed 28 public companies between 2014 and 2016 and found a strong correlation between ideation rate (innovation being generated) and growth in profit or net income. Thus, the more open for innovation a company is the higher her tendency for growth.


As we can see, different studies have shown that happier employees can affect positively the bottom line, not just by being more productive, but also by reducing the company’s cost.

Investing in employees` happiness is a win-win situation for both, the employees and the companies! Let’s all promote happiness in the workplace!