How to Balance Expenses with Employee Happiness: Where Do You Draw the Line?

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Tuesday, November 12, 2019

To run a productive business, you need to make sure you have happy engaged employees. But how do you achieve this? Here are some of the best options.

Article 2 Minutes
How to Balance Expenses with Employee Happiness: Where Do You Draw the Line?

Keeping employees happy and motivated is crucial for a business. An analysis of multiple studies found that on average, happy employees are three times as creative, 31% more productive and achieve 37% higher sales. However, this is an area in which many businesses are failing.

Less than half of Americans are engaged at work, leading to higher levels of absenteeism, errors and accidents. Business leaders therefore need to invest in employee happiness. However, this isn’t something that’s always easy to justify financially, and it’s hard to know how much your company should be spending.

Balancing expenses with employee happiness is a tough task, but it’s one that can have huge benefits to your business. The more motivated your workers are, the more productive they’ll be, and the more you can further invest in their wellbeing. Here are some of the top tips on how to achieve this:

Budgeting benefits

How much should you be spending on employee benefits? You could go by your industry average for a guide. Companies in the US typically spend between $10.33 and $19.14 per hour for each employee on benefits, with paid leave and health insurance counting as the main costs.

However, you should plan for the future when it comes to employee engagement. Some experts believe businesses will spend 45% more on this area in 2019 compared to the previous year, especially because benefits are more important than salary for the younger generation joining the workforce.

Low-cost options

Of course, you don’t necessarily need to spend a lot more to engage your employees. There are several options that could have a major effect without costing your business much at all. For example, flexible working is becoming increasingly popular, with 51% of workers wishing their companies would implement it.

In addition to improving morale, research suggests this could be an efficiency boost in itself. Chinese employees, upon being allowed to work from home, saw their productivity increase by 13%. Small changes in how your company works cost next-to-nothing, while showing your staff that you care about their wellbeing.

Taking a risk with productivity

There are other options you can try, although some can be fairly radical. For example, several companies have experimented with unlimited paid vacation. It won’t be viable for every business, but if your firm is good at managing employee workload then you can essentially leave them to self-manage their holidays.

This might sound like a recipe for disaster, but reports suggest it actually leads to employees taking fewer days off and saves businesses valuable time. Ask.com claims it has an extra 52 hours of HR time to use each year because of this policy, making it a surprisingly budget-friendly option to increase employee happiness.

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