Happiness Return on Investment

Happiness is a serious business and there is a straightforward business case for promoting it in every organisation however big or small. There are lots of potential costs savings as well as the opportunity to improve productivity and customer service. Along the way you also happen to create more rewarding happier jobs for people too!

Our on-line benefits calculator is based upon modest assumptions about the impact on your bottom line. Potentially the gains could be even greater and we have allowed you to play with adjusting the main assumptions so you can see for yourself.




Happier employees are more productive employees

Study after study shows that happier employees are more engaged, more motivated, give better customer service, play more effective roles in teams and make better leaders.

Happier employees are healthier employees

Happiness and health are interconnected. Happier employees are less likely to get sick and if they do get ill they recover quicker. All in all they show up to work more, are more present when they are there and have more energy in life.

Happier employees are more loyal

Happier employees are less likely to leave. This is self-apparent, why leave if you are happy at work?

Other potential benefits

  • Talent attraction. If you are a great organisation to work for, great people will want to work for you.
  • Innovation. Happier people are more creative and highly functional teams can positively embrace new ideas and better implement them.
  • Improved customer service. In service based organisations the relationship between the service provider and the service users is critical and is greatly enhanced with more confident happier employees.
  • More fun. No one wants to go to work to be unhappy and promoting happiness at work will simply make your workplace a better place.

Are there costs to creating happiness at work?

Following thorough on insights from the survey will certainly cost some internal resources and possibly some external consultancy. However these need not be large and we suggest you think of them as ‘investments’ not costs!

Happiness at work will release hidden energy and potential within your organisation and whilst it will change the way people do their work it will not ‘cost’ them in terms of time or resources.

Assumptions behind the calculator

Average wage = $40,000; £24,500
In the USA the national average wage in 2010 for people in employment was $41,674 (source Office of Chief Actuary, U.S. Social Security Administration). In the UK the figure for 2010 was £24,000 – which is equivalent to about $39,000 (source Office National Statistics, Labour Market Bulletin 2011). We choose a round figure between these two national averages.

Productivity gain = 1%
This is a very modest assumption. Many studies suggest that the differences between productivity of those with low well-being and high can be as much as 30%. It is however difficult to find studies that show how much productivity increases as a direct result of interventions designed to increase happiness and well-being in an organisation (note: we would like to work with you on this!). Hence we choose a very low figure. You can adjust the assumption up and see for yourself that the effects are very large regardless.

Days lost through absenteeism a year = 4 – 8 days
New figures released in the height of the recession in the UK suggest that absenteeism is at an all time low of just 4.5 days. Fear and insecurity can also reduce absenteeism but these gains will probably be lost as and when the economy recovers. People wanting to be at work is a better motivator for reducing absenteeism and has the added benefit people also being present and energised. The UK figure is from estimates by the UK department for Business, Innovation and Skills (BIS). We actually don’t use this figure precisely as we give you the option of choosing how many days of absenteeism it will save. Approximately 40% of absent days in the UK are directly due to mental health problems such as stress (source Sainsbury Centre for Mental Health; Developing the business case for mental health at work).

Staff turnover = 16% at a cost of 40% of annual wage.
The average figure for the UK is 16%, for the US it seems to be higher but the US has stronger seasonal effects than the UK. We take the UK figure here. The costs of each member of staff leaving are assumed to be 40% of annual wage. It will be significantly lower for seasonal work (hence low US turnover assumption) but higher for senior management positions. This estimate includes the direct costs of recruiting as well as knock-on effects of hiring temporary staff and/or increased burdens on existing staff. (source Sainsbury Centre for Mental Health – as above)