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11 ways to foster happiness in the workplace

A happy employee is a productive employee. Here are 11 ways employers can foster happiness in the workplace and see positive results.
Published 4 Nov 2022
Updated 26 Feb 2024
12min read
A woman smiling happily on her desk

Do you know how happy your employees are currently?

If they aren’t dancing like this on the way to work, that’s unacceptable.

Happy employees are more likely to be loyal to a business and have greater job satisfaction, better productivity, and stronger engagement. The power of happiness in the workplace goes a long way.

No one wants to be working in an organisation with a toxic culture. Most employees just want to feel appreciated and recognised for their hard work; have job security; have strong personal networks in the business; have room to grow and learn; and have opportunities to succeed.

If you’re keen to boost employee morale and make your workplace a conducive and comfortable environment where employees can produce their best work — read on to find out more.

Key points:

  1. The pandemic has driven employees to reevaluate their work-life balance and job satisfaction.
  2. Happy employees are more loyal, satisfied, and engaged with their roles.
  3. Employee happiness and engagement are closely linked; happiness leads to engagement, not vice versa.
  4. Employee happiness also strengthens the employee value proposition (EVP), making companies more attractive to potential hires.
  5. Employees want appreciation, job security, and growth opportunities, with benefits like flexible work schedules, ongoing education, wellness initiatives, and a positive company culture.
  6. Employers can create a positive work culture through trust, fairness, listening, inclusivity, mental health boundaries, recognition, relationships, flexibility, growth, wellness, and transparency.

Why is employee happiness at work important?

Because it brings about a whole list of benefits, such as…

1. Boosting employee value proposition

Employee happiness helps to strengthen your employee value proposition (EVP). An EVP is your most valuable tool when it comes to attracting staff — it clearly defines and promotes why your company is so great to work for.

When your employees are happy at work, it creates a positive work culture and makes your organisation an attractive place for existing employees to stay in, and for potential new hires to join. Happy employees become your organisation’s biggest advocates.

2. Improving productivity

‘Happy employees = productive employees’ isn’t just a corporate cliche, it’s the truth. A study by the University of Warwick found that happy employees are 12% more productive than their peers. Employees who report being happy at work also take 10x fewer sick days than unhappy employees.

Having happy employees facilitates strong employee friendships and improved wellbeing, bolstering creativity and problem-solving abilities. This all leads to improved productivity, and ultimately benefits your organisation’s bottom line.

3. Enhancing employee retention

The pandemic has been a miserable time for many, but it has also created a shift in thinking. Employees are asking themselves some big questions right now — Do we live to work? Do we want to go to the office every day? Do we feel appreciated for our hard work and loyalty? Would we be happier elsewhere? Unhappy employees lead to a high turnover rate, which incurs huge losses for your business.

One of the most important lessons that leading companies like Cisco Systems have learnt, is that fostering a work environment which is fun, inclusive, and motivational inspires employees to find joy in their work — and this reaps substantial benefits. Happy employees are loyal employees, and loyal employees do wonders for your business.

4. Strengthening employee engagement

“Employee engagement includes emotional and social needs, like doing work that you are good at and connecting your work with a higher purpose.” — Gallup

Employee happiness and employee engagement are intrinsically linked — one leads to the other, but not vice versa. An employee can be passionate about the work they do and be committed to the organisation, but be miserable at work because of office politics, a toxic work culture, or being mistreated by colleagues and managers.

Engagement without happiness is unsustainable, and ultimately leads to two outcomes — stress and burnout, or eventual loss of engagement.

On the other hand, happier employees are naturally more engaged — having a positive, can-do attitude towards work allows them to genuinely enjoy their work, stay committed to the organisation, and also has a good influence on the rest of the team. Happiness is infectious, and when it spreads, the whole team benefits from stronger teamwork and communication.

What makes employees happy in the workplace?

Did you know that there are three billion working people on this planet, and only 40% of them report being happy at work?

Having a good salary is important but it’s no longer enough to attract and retain the best people. Some of the most common employee benefits that people want include flexible working options, continued education options, free meals, mental wellness initiatives, subsidised yoga and gym memberships, and more.

In our Employee Movement and Retention Report, the same factors have been echoed. Apart from a salary increase (who wouldn’t want that?), other initiatives employees are looking for in their roles are — more rewards and recognition; a promotion; a bonus or introduction of bonus structure; flexible working options; a good company culture/friendly people; and support for training and development.

While an extensive list of perks like free massages and gaming rooms may be great in boosting employee happiness, you’ll realise that more often than not, it’s all about how employees are treated by their leaders and colleagues that really make or break the way they feel about the company and their jobs.

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The Ultimate Employee Engagement Guide

11 ways to foster a positive work environment

1. Build trust in your employees

Trust is one of the core foundations of a successful organisation. One of the biggest indications of a toxic workplace culture is when trust is seen as something that is earned, not given. We’re talking about micromanaging and triple-checking, regardless of an employee’s experience or performance.

Holding your employees too tightly will cause you to lose control instead — and employees shouldn’t be struggling to earn your trust. When you give your employees freedom and responsibility to do the right thing, it shows that you’re confident in their abilities. Focus on output over hours. Ensure accountability and trust that they’ll get things done.

2. Ensure fairness and shut down discriminatory practices

No one likes a biased manager, or a company that pays male employees higher than female employees. It’s important to nip that in the bud if you see it in your workplace. Employees want to know that they are working for a meritocratic firm — promotions and rewards should be fairly distributed based on effort and performance, and not by connections, rank, tenure, age, experience, or job category.

A great example of that is Salesforce, who have committed themselves to ensuring pay equality globally. They audit for equal pay every year and adjust as needed — with their analysis this year showing that 8.5% of their global employees required adjustments. Of those, 92% were based on gender, and 8% were based on race or ethnicity. They’ve since spent $5.6 million USD to address any unexplained differences in pay, and a total of more than $22 million USD spent since 2015. Now that’s a company that shows they truly care, and one that employees would be happy to work for.

3. Listen to your employees

Does your company employ a predominantly top-down approach? Are employees just given orders and expected to follow, with no avenues for feedback or opinions? If so, it’s time to rethink your internal communications.

Employees wanted to feel respected and heard. When an employee goes to higher management or leaders with an idea, are they just acknowledged and moved along, or actually considered and pondered upon before a decision is made? Employees need to feel that their thoughts matter — the future of feedback is a loop.

Continuous listening is important, so you get to gather employee feedback on a frequent or regular basis, as opposed to one-off feedback events like an annual engagement survey, which doesn’t amount to any action if the results aren’t taken seriously.

Not listening to employees leads to negative outcomes such as stagnation, presenteeism, absenteeism and burnout. If you want empowered teams with high engagement and productivity, genuinely seek out and accept feedback from employees, and take them seriously.

4. Create a safe and inclusive workplace

Do you have a diverse workforce with a mix of genders, ethnicities, ages, religions and backgrounds? Having an inclusive workplace goes way beyond hiring to hit that diversity quota — it’s not just about ticking that box. You want to create a work environment where employees feel safe and comfortable to be themselves, and voice their opinions despite cultural differences.

Each of us hold internal unconscious biases that we’re probably not even aware of, which is why it’s key to foster an inclusive culture. Research has shown inclusive workplaces are 1.7 times more innovative than those with fewer D&I initiatives.

Some ways to foster a more inclusive workplace is by practising good leadership, investing in D&I training, implementing anti-discrimination policies, supporting employee resource groups, encouraging team meetings and more. Using inclusive language is also a great way to make people feel more comfortable at work and like they belong. By creating a psychologically safe work environment, you’ll facilitate greater employee engagement and happy faces all around.

5. Set boundaries at work for mental health

Work-life balance is essential for happy and productive employees, and achieving it all really comes down to boundaries. With so many elements at play right now thanks to technological advancements and the pandemic, it can be hard to draw boundaries, especially when it comes to remote or hybrid work.

If you don’t have a good workplace culture and demarcate your boundaries clearly, it’s all too easy to log on at night and on weekends. Instead of work-life balance, it becomes work-life integration, and more often than not it’s skewed to one end.

Setting boundaries at work is so important, because it helps employees prevent burnout. When employees are able to put a stop to their work day and properly disconnect, they are able to focus their energy and time on doing the things they love to recharge and rest. It also becomes easier for them to recognise when work is becoming overwhelming, and flag it to stop eventual burnout before it’s too late.

Working hard all the time isn’t sustainable, and neither is a toxic productivity mindset. Employees who are productive in the long-term are fuelled by regular breaks, self care and recreational time. Staying physically and mentally healthy is essential to staying focused, happy, and doing their best work.

6. Reward and recognise hard work

Reward and recognition is more important than ever before. Our Employee Movement and Retention Report has revealed that one of the top reasons why employees are seeking a new role is a lack of appreciation and recognition.

It’s easy to forget to show appreciation to your staff, especially during stressful and uncertain times. As we continue to emerge from the pandemic, it’s worth thinking of ways to build and strengthen a culture of recognition within your organisation.

Employees who feel valued for the work they do will show higher levels of engagement within your business, and in turn contribute more, innovate, and smash goals. As for the business, employee recognition at work also ensures the attraction and retention of a quality workforce.

At Employment Hero we’re huge on reward and recognition — from regular ‘Shout Out’s at our fortnightly All-Hands meetings to Hero Nominations and peer-to-peer praise on our platform, no hard work goes unnoticed. Impromptu praise is also incredibly impactful regardless of its medium — we highly recommend doing it regularly. It can be as simple as a Slack message or a short note to someone who’s made a wonderful difference to your day.

Check out our guide to improving employee recognition in your workplace for more helpful tips.

7. Foster strong interpersonal relationships

It’s a well-known fact: having friends at work just makes work less stressful and more fun. It creates a sense of belonging and camaraderie, because you’re all working towards a common purpose together. Having regular team-building activities and events gives your team the opportunity to get outside the office space, and connect with their coworkers on a personal level.

Team building sessions never go wrong. Or even a full day offsite just spending time playing games at the beach could be game changing, with awesome memories to keep for a lifetime. As for remote teams, don’t worry because we got you. Here are some fun and free online team building games that you can go crazy with!

Leaders should also strive to make relationships within the team meaningful by getting to know your employees, their interests and hobbies, what their work goals and motivations are, and showing your commitment to helping them succeed.

8. Be flexible and family-friendly

If there’s one thing we’ve learnt from the pandemic, it’s that flexibility is key. The 9-5 grind just doesn’t work for everyone, and it’s unlikely organisations will ever return to that. Top employers understand the importance of flexibility and catering to different lifestyles because there isn’t a one-size-fits-all approach.

Employees also increasingly prioritise work-life balance, which is why having flexible work options is one of the top priorities they are looking for in a job. It enables them to adjust their schedules according to their needs, with the freedom to balance both their professional and personal lives. The rise of remote work has also provided greater flexibility and viability in allowing them to fulfil their roles whilst taking care of life concerns.

As for working parents — we all know how difficult it was balancing the need to attend meetings whilst having a crying baby or screaming kids in the background during lockdowns. Having a family-friendly workplace where working parents feel supported is crucial in maintaining their wellbeing and happiness. A stressed and worried parent will definitely be struggling to produce good work (or even any work, for that matter).

Ensure that your employees are aware of their benefits — such as childcare leave, maternity leave, paternity leave, and more. Where possible, provide subsidised childcare or childcare services near the office, for greater ease. Provide them with the flexibility to take time off to care for their sick kids or elderly parents if needed, and direct them to valuable resources and dependent care assistance plans if relevant to their situation.

Providing this level of flexibility to employees will lead to greater happiness and productivity, because employees don’t feel restricted in any way. Flexible working schedules help to reduce their stress and enable them to come to work refreshed — which benefits everyone!

9. Invest in their growth

According to LinkedIn’s Workforce Learning Report, 94% of employees say that they would stay at a company longer if it simply invested in helping them learn.

There’s no better way to show your employees that they are valued and appreciated by the company, than investing in their growth and development. It’s important to understand how to upskill your workforce in the next decade, and provide them with the necessary resources and support to reach their full potential.

Through one-on-one meetings, you can find out what your employee’s career path priorities are — are they interested in taking on new responsibilities, projects or challenges? Which courses would they like to enrol in? Are they keen on internal mobility opportunities? Companies that excel at internal mobility retain employees for an average of 5.4 years — nearly twice as long as companies that struggle with it, where the average retention span is 2.9 years.

A practical way for employees to uptake learning opportunities in their own time is by using a Learning Management System (LMS). When you use an LMS like the one you can find in Employment Hero, you can create customised learning pathways for your employees.

You can upload your own content, or take your pick from thousands of ready-made learning courses. You can easily assign the courses to team members from the platform. Managers and leaders can also quickly see the status of a particular course and make sure employees are on track with their continual development.

10. Focus on employee wellness

Having a positive work environment used to involve extensive employee benefits, like free cafeteria lunches, foosball tables, and fun activities. But times have changed since the pandemic, and the growing focus is now on employee wellbeing. Having great benefits only provides temporary and short-term rewards for employees — to ensure continual employee happiness and engagement, it’s more important to invest in wellbeing initiatives.

The data doesn’t lie — in our Wellness at Work report, employees who rated their employer’s commitment to wellness as good or excellent were 75% more likely to say they were loyal to a business. High-growth and resilient businesses are created by healthy and inspired employees, who are given the environment to do their best work.

That’s exactly why workplace wellness is worth the investment when it comes to trusting teams. It doesn’t just help with a positive work environment, it also enables you to save major costs associated with turnover — which can make all the difference to a growing company.

Does your organisation have a workplace wellness program? Contrary to popular belief, you don’t need to spend a lot to provide an employee wellness program. Check out our guide to boosting employee wellbeing for tips on how you can get started today, regardless of your budget.

11. Ensure transparency in your culture

Transparency is an incredibly important factor that contributes to workplace happiness — when it comes to leadership, transparency equates to honesty and openness. If you want your employees to trust you, you can’t keep them in the dark.

Especially as everyone navigates the uncertainty of the current economic climate, alongside working with teams in separate locations, it’s more important than ever to communicate timely and clearly. Ensure that company-wide updates are provided regularly, there’s transparency across teams with regards to roles, expectations and deadlines, and new starters are onboarded effectively. All of these contribute to a positive work environment.

Being open and transparent starts with strong communication — and when employees know that they are being kept informed with the status of the business, they’ll be able to focus better on their work and trust in the leadership team to do what’s best for the company.

Keep your employees happy

How an employee feels at work will directly affect the success of the business. So if you want your business to thrive, as well as retain and attract the best talent, you need to keep them happy.

How do you know if your employees are happy? Use employee surveys to gather anonymous and honest feedback from your team. Their responses enable you to identify and address any pressing issues immediately, and get a good gauge of overall employee happiness levels in your company.

Employment Hero’s Employee Happiness Surveys do just that — employees get to rate their happiness at work on a scale of 1 to 10, and can elaborate further using the comments section anonymously.

Keen to find out more? Take your business to the next level today with our workplace culture bundle.

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The workplace culture bundle

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