[aa_subtitle_display]Businesses have for long relied on the conventional wisdom that if they pay employees enough, they may be able to increase productivity.

Recent research has proven the link between employee happiness and productivity at the workplace. A lot of companies are slowly but surely beginning to understand this and it has resulted in a positive payoff for both employees and businesses.

Recent studies by economists have found that happiness at the workplace results in a 12% increase in productivity. Similarly, unhappy employees were 10% less productive. The recent Gallup survey reinforces the view that happy employees are more engaged.

The surprising result of the Gallup survey proves that only 13% of employees are engaged at work. Disengaged employees cost the U.S. economy $450 – $550 billion annually. The worldwide figures could be mindboggling.

Poor employee engagement provides companies the perfect opportunity to improve productivity by investing in workplace happiness.

Employee engagement has a big impact on any business (big, medium and small). The overall impact can be determined by how businesses manage the areas pertaining to employee welfare.

The many areas that are affected by employee disengagement include:


A disengaged workplace costs billions of dollars each year in productivity. Many managers do not understand that as employee engagement declines so does productivity. This can have a direct impact on the bottom line of the business.


Are your employees eager to show up at work? Are they happy with their work? Do the team members add value and meaning to interactions at the workplace?

The manner in which employees view the workplace and their work is very important. These elements come into play at the workplace and can add up to a positive or negative experience.

Customer Loyalty

Acquiring a new customer is a time consuming and expensive process. When you have loyal and satisfied customers, the cost of acquiring new ones is minimal. Disengaged employees can affect customer satisfaction and loyalty.


When customers start shifting loyalty, sales slump. A good employee engagement program can help retain existing customers and attract new ones. This can have a positive impact on sales and profits.


When employees stay away from work for various reasons, it can affect productivity and business may suffer. The workplace becomes less efficient as engaged employees become overburdened with the work of absent employees.

The morale at the workplace also gets affected as employees start feeling disenchanted with the work.


When your business becomes a revolving door for hiring and exiting, it is the first and most visible sign of employee disengagement. Hiring and training new employees can be time consuming and expensive.

Managers need to determine the cause of disengagement, so that they are able to take remedial steps to stop the exodus of good employees from the company.

PEOs can provide your business the tools to establish the link between employee engagement, customer service and productivity. This can be used to identify areas in your business where a change is necessitated. Implementing these changes can have a positive impact on the productivity of your business.

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