Econometric Study

Benefits of Happy, Engaged Workplaces Shown

Henry StewartLondon (UK), September 2017 - Award-winning management and leadership-training provider Happy Ltd has always known that happy workplaces lead to greater productivity and tangible business results. Now, new research published on the Happy Manifesto website, collated by Rian Doris, demonstrates the real benefits for organisations of all sectors.

Happy workplaces are more profitable, having higher share growth and lower costs. In the most detailed econometric study to date, Alex Edmans, then at Wharton Business School at the University of Pennsylvania, analysed the result of investing in the companies listed in the Great Place to Work lists over the last 25 years.

He found a difference, compared to the stock market, of 3.5% a year. An investment that would have returned $100,000 in a tracker fund would have achieved $236,000 from investing in companies that focus on creating great workplaces and prioritise employee happiness. This is further evidence for the strong correlation between employee happiness and shareholder returns.

The lesson is clear: Employee happiness is a strong predictor of long-term company performance. "Happy workplaces can transform organisations. One of our telecom clients tells us that, since focusing on creating a happy workplace with Happy, their sales and profits are up, and their share price has more than doubled over two years. It’s great to see this reflected in the new research by Rian," said Henry Stewart, Founder and Chief Happiness Officer at Happy Ltd.

"Organisations that prioritise making their employees happy minimise turnover, maximise talent retention, reduce absenteeism, and increase productivity, all of which can significantly reduce costs."

This new research is available on Henry’s blog on the Happy Manifesto website.