12 Best Benefits of Happy Employees

By: | Updated: October 04, 2022

Here is our list of the top benefits of happy employees.

Benefits of happy employees refer to the perks of creating a positive work culture that ensures employee satisfaction. Examples include increased productivity and increased confidence at work. This practice aims to prime employees to deliver their best in a favorable work environment.

These ideas are facets of creating positive work environments, improving company culture, and following best practices of employee engagement.

This list includes:

  • benefits of a happy workforce
  • the importance of keeping employees happy
  • benefits of happiness at work

Let’s get started!

List of benefits of happy employees

From improved employee retention rates to healthy employees and increased productivity, here is a list of benefits of happy employees.

1. Happy Employees Improve Retention Rates

One key factor that affects a company’s retention rate is employee dissatisfaction. Employees who are unhappy working with a business quit, taking along their experience, skills, and talent. The departure also involves wasted cost of recruitment, onboarding, and training. Increased employee turnover is potentially disastrous to a company. Companies should create systems and rules that favor employee retention.

Ways to improve your employee retention rate include:

  • Addressing employee complaints and ensuring that you handle problems between employees fairly
  • Allowing employees to take breaks
  • Ensuring that employees get paid for their services promptly

Creating systems and rules that ensure employees’ happiness and satisfaction in the workplace is key to retaining valuable talent. These systems also can reduce the cost of recruiting new talent, such as the expense of training and onboarding new hires.

In short, keeping your employees happy benefits your company because happy employees will stay with your company and ensure that they use their skills and talent to help your business grow.

Here is a list of employee retention strategies.

2. Happy Employees Reduce Cost

Companies spend less when employees are happy and content at work. Unhappy employees are less productive and more likely to be absent from work. When the employees repeat these behaviors, it can affect the company’s output and overall profitability.

A company needs to invest in their employees’ satisfaction and contentment, ensuring that the employees remain healthy and become more productive. Healthy and happy employees mean fewer sick days and reduced absenteeism. These actions will, in turn, reduce the cost spent on ensuring that employees can work at full capacity.

To ensure that companies understand that reduced labor costs are important for increased profitability, businesses need to see their employees as assets. When you see and treat employees as assets, they reduce costs for a business by working efficiently and effectively. This point highlights the importance of keeping employees happy.

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3. Happy Employees are Healthier

When you set up a good and flexible work schedule in your company, you create an environment favorable to your employees’ health. You can achieve such an environment by reducing work-related stress and anxiety. Plus, employees tend to be more productive when they work in a relaxed environment.

Setting up a friendly work environment ensures that employees feel comfortable relating and interacting with colleagues. Interacting helps to reduce the stress, tension, and headaches that come with spending several hours seated behind their cubicles. A cheerful and happy work environment also improves employees’ moods and motivates them to complete tasks around the office.

Here are a few tips:

  • Encourage employees to eat healthy in the workplace by offering healthy meal options in the company kitchen
  • Organize fitness events a couple of times a month to encourage employees to stay fit and healthy
  • Host health awareness seminars where you can educate employees about the best health practices for the workplace
  • Conduct mental health screening
  • Give employees breaks to relax and reduce stress

Companies need to understand that employees are responsible for the day-to-day run of the business. Since the employees play such an active role in ensuring the business runs smoothly, they may fall ill from stress. Creating a relaxing and cheerful work environment positively impacts their health.

Here is a list of employee wellness program ideas.

4. Happy Employees Relate Better With Clients

Happy employees relate better with clients and have the patience and skill to maintain good client relationships. An unhappy employee may be short-tempered, irritated, and angry. Such team members may take their frustrations out on clients, ruining a business deal or sale and losing customers.

To ensure that your employees are happy, praise them for jobs well done. These compliments boost employee morale and motivate them to increase their efforts and work harder. In addition, when employees feel seen and appreciated, they feel more confident and happier, improving their relationships with clients. This reason is one of the main benefits of happiness at work.
Here is a list of customer service books.

5. Happy Employees Care About Your Business

Contented employees care about how their actions affect your business long-term. As a result, the employees consider their efforts and work to create more effective and efficient plans. This attitude helps them meet the company’s goals and targets.

Happy employees feel valued and believe in the company’s culture. A happy employee will share in the company’s dreams and play their role effectively, no matter how small a task may seem. The employees will likely not complain about putting in extra hours if that is what the business needs to meet a particular target. Employees will make this sacrifice because happy employees care about what happens to your business since they feel a part of it.

6. Happy Employees Boosts a Company’s Reputation

Employees’ will sing your company’s praises if they are happy and satisfied. Their reviews and experiences speak well for your company and create a stellar reputation, making it attractive to other talents and potential clients.

Most clients love to patronize businesses with a working company culture that values and appreciates employees. Therefore, investing in your employee’s happiness and satisfaction builds a reputation for your business which may create even better opportunities for your company.
A few tips:

  • Offer incentives for jobs well done, which makes employees feel appreciated.
  • Create special activities or game days for employees to interact, have fun and reduce stress.
  • Ensure that your employees have a good work-life balance.

Your employees’ happiness says a lot about your business. However, if your employees always look stressed, tense, or sleep-deprived, that drained look may create a wrong impression of your company. This terrible impression will make other talent lose interest in your company and discourage client’s from working with you.

Here is a guide to employee advocacy.

7. Happy Employees Can Work in Teams

When employees are dissatisfied with your company, they make it difficult for other employees to work with them. Disgruntled employees create a tense or gloomy work environment. Employees need to be happy to be able to interact, engage and collaborate to come up with unique and creative ideas. These ideas then help increase your company’s profitability.

Happy employees affect the overall mood of the workplace and build meaningful relationships in the office. The benefits of a happy workforce include increased creativity, efficiency, and productivity.
A few tips:

  • Organize team-building activities like scavenger hunts, trivia, and puzzles.
  • Arrange get-together events to foster good work relationships.
  • Encourage employees to work together in teams on a variety of tasks.

Remember that you should not force employees to get along. The activities listed above are to foster teamwork naturally. A happy employee will make the fostering process even more manageable as the employees appear more approachable to their colleagues. Happy employees will even welcome the idea of working alongside other teammates.

Read more about ways to improve team cooperation.

8. Happy Employees are More Creative

Blissful employees are creative employees. Team members who do not feel pressured, stressed, or anxious in the workplace can more easily develop new ideas and plans that fulfill the company’s targets or goals.

Employees become dissatisfied or unhappy if they do not have the necessary tools to show their skills or creativity at work. Every employee’s creative process is different. Your job as an employer is to ensure that your workers have the necessary resources to exhibit their creativity.
A few tips:

  • Provide all tools necessary to facilitate your employees’ creative process.
  • Update new software required to support your employees’ jobs where necessary.
  • Replace broken down machines or equipment that may affect your employees’ output.
  • Facilitate group brainstorms and creative projects
  • Give staff autonomy to innovate

Employee creativity is instrumental to your company’s growth because new ideas help a company stay up to date with current methods in the business industry.
Here is a list of books about creativity.

9. Happy Employees Create a Better Work Environment

One unhappy employee is unfortunate, but several unhappy employees in a company corrupt the work environment and can make the office unbearable. On the other hand happy employees create a comfortable and cheerful work environment that is infectious with laughter, friendships, and teamwork.

Employees can only create a better work environment when you teach them to appreciate the formal hierarchy in the company. This lesson teaches them to respect their superiors and colleagues. Happy employees can also help foster a better work environment by motivating other employees and colleagues to complete necessary tasks, participate in team projects, and help members of the teams who may be having difficulties. Employees can only create a happy work environment if the company encourages a happy work culture. Ensure that your company sets rules that allow employees to work in a stress-free atmosphere.

10. Happy Employees Are More Productive

Salaries and other financial incentives are sometimes insufficient to motivate employees to work. Employees have a hard time coping in a tense or stressful work environment. If you want your employees to be more productive, make them happy and satisfied by providing all the resources needed to carry out their jobs effectively. You should also appreciate their efforts for previous work done and offer them flexible work schedules to meet the company’s targets.

Your employees need to enjoy their work to be more productive. Therefore, you must ask what you can do to make their job more enjoyable. Examples may be resources or any activity to help your employees relax and improve brain activity. Some employees may also prefer to work remotely as they may be more productive at night rather than working a nine to five

11. Happy Employees Are More Confident

Happy employees feel more confident. This idea is one of the numerous benefits of happiness at work as it allows employees to explore new methods, try out new challenges, and become more responsible in the office. When employees feel confident, they become more willing to undertake challenging projects. The employees also become more dedicated to tasks and look forward to new exercises. When employees look forward to new challenges or activities in the office, they have greater output and increased productivity at work.

To create a confident workforce, the heads of companies must lead by example, as employees tend to emulate those that lead them.
A few tips:

Motivate, do not criticize. When employees make mistakes, it is best to compliment their efforts, show them the proper way to carry out the tasks, and motivate them to work harder. This approach makes employees more confident and ensures they are willing to try again.

  • Be vocal about the company’s goals. When employees know what the company hopes to achieve, they become more confident, knowing they are a part of that journey. Employees also become happy when they know the company’s plans because it makes them strive to work harder.
  • Walk confidently. A company’s leader needs to walk confidently, showing the employees that you are ready to conquer another day and put in the work required to meet the company’s goals. Employees are more likely to work confidently if you show that you are doing the same.

When your employees are happy, they can easily become confident. This idea is one of the benefits of happiness at work.

12. Happy Employees Are More Engaged at Work

Cheerful employees become more engaged at work and involved in the company’s day-to-day processes. As a result, team members work harder, trying their best to meet your expectations and aid the company’s growth.

When employees become engaged, they deliver better quality of work, become more profitable, and are more productive. When employees become engaged at work, they feel like they are part of the company and fiercely loyal to it and what it represents. This also ensures that employees aim to grow within the company and develop long-term plans, which puts your company on the path to success.

Read more about the importance and benefits of employee engagement.


Happy employees are essential to the growth of a company. When your employees are happy, they become more efficient, confident, and productive. Satisfied employees also share in your company’s goals and will work as needed to ensure they meet them.

The employer, the company rules, and the culture all play a huge role in determining whether employees are happy and satisfied at work. It would help if you tried to observe your employees as they work to know how they feel and make adjustments where necessary.

For more tools, check out employee engagement survey questions and job satisfaction statistics.

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FAQ: Benefits of happy employees

Here are answers to common questions about the benefits of happy employees.

What are the benefits of happy employees?

Benefits of happy employees include increased productivity, increased confidence, reduced cost to the company, and healthier employees.

Why is it important to keep employees happy?

It is essential to keep employees happy because workers are key factors in a well-run business. Employees handle almost every aspect of a company, from the gathering of files to interacting with customers and sales of goods and services. If the employees are unhappy, they will not do their jobs well, which may affect the business’s profitability.

What makes employees happy at work?

Employees are happy at work when you value and appreciate their efforts. Employees need to feel a part of the company’s journey and not feel treated as easily dispensable workers.

It is also important to set the right work environment and provide all necessary tools and resources for employees to exhibit creativity. This practice allows employees to grow within your company and pursue higher career choices. Companies should consider keeping their employees happy and satisfied as a priority. This is because happy employees mean increased profitability, better client relationships, and the overall growth of a business.

Author avatar


People & Culture Director at teambuilding.com.
Grace is the Director of People & Culture at teambuilding.com. She studied Industrial and Labor Relations at Cornell University, Information Science at East China Normal University and earned an MBA at Washington State University.


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