Happy employees celebrating together
Hybrid work

Employee happiness and productivity: what’s the link?


August 9, 2022


December 28, 2023

Since Oxford University’s Saïd Business School released its research about employee happiness and productivity, many organizations have started to take a closer look at this topic. Is there an actual correlation between having a happy workforce and performance? According to this study, the answer is yes. A lot of companies already realize the importance of creating a positive corporate culture to enhance employee experience.

The ultimate goal is to foster a higher level of happiness and satisfaction in the workplace. This is crucial as the world of work is changing, putting employees at the center of the business. So, why focusing on your workers better than concentrating on customers? Because their input has the greatest impact on your business. They can help it flourish… or collapse. While every company strives for development and growth, collaborating with a motivated, engaged, and happy team is a successful way to achieve this goal. Let’s dig into a topic that is starting to shake up HR and management strategies.

Key statistics about happy workers and performance

The impact of happy workers on business performance

There are various reasons why organizations should focus on making employee happiness their priority. A few of them include: 

The last aspect has been a hot topic over the past couple of years and this is why we choose to share more about it. Does employee happiness really have an impact on productivity or is it just an assumption?

The Oxford University’s Saïd Business School release

The connection between having a happy workforce and levels of productivity has been investigated for decades. Fisher and Hanna already mentioned it in their study called The dissatisfied worker in 1931! However, companies only started to have a serious look at it recently. In 2019, Oxford University’s Saïd Business School released new research regarding this topic, representing the first causal evidence. The behaviors and performance of 1,793 workers at one of the biggest organizations in the United Kingdom have been analyzed using administrative data and happiness surveys. So how much more productive are happy workers? The figures are clear, productivity increases by 12% when employees are happy.

👉 How do you make hybrid work? Start a free trial of the deskbird app to discover a digital tool that makes your employees happy thanks to more work flexibility. 

Women on the phone smiling and holding tablet
Happy employee on the phone with colleague.

The effect of employee happiness on productivity

A good mood boosts efficiency

Have you ever noticed the difference between moments when you are in a great mood and times when you are not? When we are happy, our workflow spikes. As mentioned in the study from Oxford University’s Saïd Business School, we are better organized, work faster and obtain higher outcomes when it comes to sales conversions. This last element mainly results from the increase in emotional and social skills when we are in a good mood!

Happy workers are more creative

Feeling anxious or stressed negatively affects productivity, especially if these emotions result from the work environment. It becomes harder to concentrate and get things done when we have negative thoughts on our minds. However, being happy and satisfied with our job has the opposite effect. With a clearer headspace, happy employees can focus 100% on their tasks and let ideas flow. Additionally, we will see later in this article that trust and recognition heavily impact your employees’ level of happiness. Showing them appreciation and value encourages them to share their point of view and ideas. 

Happiness is contagious

Being happy and positive every single day is hard, even impossible. An important meeting that didn’t go as planned can suddenly switch your mood. Private events can also impact your mood and create negative feelings. The good thing about working on fostering happiness in the workplace is that it has a snowball effect. Purposely or not, team members lift each other. Evolving in a positive work environment with people that are satisfied with their job is therefore enhancing motivation and productivity.

👉How to optimize your workspace? Check out our hybrid office calculator!

Job satisfaction makes people stay and attracts new talent

Many changes are happening in the professional world and one of the main shifts is how we see work. However, not all your employees will have the same expectations as we are entering a new era based on a multigenerational workforce. What makes Baby Boomers happy might not be what fosters happiness for Gen Z. Generational diversity represents a real strength for businesses. In this context, job satisfaction is essential to retain your most experienced workers and attract innovative and tech-focused new talent.

Women taking photos of products on desk with white background
Happiness improves creativity.

Organizational aspects that make workers happy and increase productivity

The role of management

According to the white paper Performance Accelerated from the O. C. Tanner Learning Group, 79% of employees are quitting their jobs due to a lack of appreciation. But this is not the only area where managers can have an impact. From a bigger picture, their role plays a huge part in employee experience. Leadership can either be a driver for a motivational atmosphere or create a toxic environment leading workers to do the minimum requested and feeling unvalued.

People-centric management methods to increase interaction and collaboration have become even more vital since the surge of hybrid work. While employees have to find what works the best for them, leaders have to rethink the way of doing their job too. Micromanagement tends to arise when team members are working remotely. This creates stress and an air of mistrust which is counterproductive. Being present without controlling is essential. Workers need to be listened to and supported wherever they work from.

Doing the same job in the same company for decades is over. People are not scared to leave their position if they are no longer happy. The reasons for lack of job satisfaction are endless but one is very common: the search for purpose. As a leader, offering career mobility and a purpose-driven mission are essential for increase employee satisfaction and happiness. 

👉 How to manage a flexible workforce? Discover the remote teams’ best practices!

The support of workplace technology

Technology in the workplace includes various digital tools that serve a range of purposes such as facility management, IT, or human resources. Some also support your workforce in their tasks with the use of automation and Artificial Intelligence devices, for example. Others improve their work-life balance and well-being through hybrid working or wellness apps, for instance. These new tech solutions can increase both your employees’ happiness and productivity.

The positive impact of implementing technology on your workforce’s happiness might not be obvious at first, but take a look at robotization, for example. Automated tools enable people to stop working on repetitive and low-valued tasks and instead focus on more meaningful missions. As mentioned, having a purposeful career is one of the most important characteristics of job satisfaction and general happiness.

The ability to work flexibly has a significant impact on your workers’ mood and satisfaction. However, implementing a hybrid work model requires good organization to avoid scheduling conflicts and therefore, discontent. The use of a week planning platform can support you in solving this common issue. 

The impact of the workspace

Does your office space foster interaction or are your employees working on their own? Offering single desks and remote working areas is not a bad thing, but only having isolated workspaces does not match the needs of modern workers. As people are working virtually more than ever, coming on-site is the occasion for them to meet their peers and realize team projects together. 

Also, while Millennials enjoy operating from home, Zoomers are excited to go to the office and get to know their colleagues after finishing studying and starting working remotely. Consequently, the office should trigger well-being and answer your employees’ expectations. The best way to make this happen is by collecting feedback and examining workplace analytics to create a unique office space layout.

Once you have determined how many individual desks, meeting rooms, car spots, and unconventional working areas (seating zones with sofas, terrace, etc.) are needed, think about the office design. Many design aspects impact how we feel as our professional environment plays a massive role in our workflow. 

Do you want to learn more on this topic? Read our article regarding Feng Shui at work, it can help you create a productive and healthy work atmosphere.

Women in grey top with curly hair and glasses standing cross armed
Happy manager leading team

With an increasing number of studies showing the link between employee happiness and productivity, there is no doubt that keeping your workers happy is key. It also confirms the idea that we are in an era that prioritizes employee centricity. You can have the best business plan, technology, and talent, but it does not matter if your team members are unhappy. Your business might work, but it will be hard to succeed as happiness impacts productivity. Productivity no longer simply means the ratio between aggregate input and output but also the quality of work completed. 

Are you looking for tools to support your hybrid teams to be happy and productive? Request a free demo of the deskbird app and discover numerous user-friendly features!

Employee happiness and productivity: what’s the link?

Paulyne Sombret

Paulyne is a highly respected expert in hybrid work. She's known for her writing on sustainability in the hybrid office, flexible work models, and employee experience. With a strong background in content and SEO, her work explores the exciting trends and latest news in the world of work.

Read more