Happiness will save the economy

A year ago, in an effort to demonstrate that it’s not just GDP that counts, the government published the first results of its initiative to measure the nation’s levels of wellbeing and happiness. It was met with a somewhat mixed reception.

One year on, however, businesses and academics are proving that happiness and profitability are inextricably linked. And, in fact, that a true focus on employee wellbeing could help bring the UK economy out of recession.

Andrew Oswald, professor of economics at the University of Warwick, is a leading expert on the link between happiness and the economy. His recently published paper, Happiness and Productivity details a lab experiment showing that happiness boosts human productivity by 12 per cent.

This is nothing new, I hear you proclaim. True. But how many of us in business are actively trying to do something about it” Taken seriously and with the proper approach, investing in the happiness of your staff can have a significant impact on the bottom line. 

Two years ago, we put in place a voluntary “positive mindset” programme and separately measured levels of happiness and revenue per individual before and after the course. The course consists of one day a month for four months, focusing on various components within positive psychology, such as personal well-being, gratitude and appreciation of life, beliefs and the importance of healthy eating and sleep. 

The results were pretty conclusive: amongst the staff who took part, happiness increased by 14 per cent and, combined with general good management, positive culture and strong values, we saw a 46 per cent increase in sales over the six months following the training (an average weekly increase of £4,066 per person). Whilst we wouldn?t expect this high level of return for everyone all the time, the business benefits are clear.

Other businesses are also beginning to measure “happiness” in a more systematic way, and to act upon it when things go wrong. Midlands-based creative marketing agency, WAA, has installed “happiness monitors” around its office – iPads displaying a range of facial icons. Employees are asked to record, anonymously, how happy they are throughout the day. The data is used to assess morale and address any trends which crop up. 

At Nixon McInness, social business consultants based in Brighton, employees can place tennis balls in one of two buckets – marked “happy” and “unhappy” – when they head home. This happiness barometer acts as an early warning system so that any looming problems can be identified and addressed early on.

There are the obvious perks that many businesses have had in place for a long time, all of which help to boost employee morale – massages, yoga, a pool table, providing free fruit, allowing people to leave early on a Friday, rewarding loyal and committed staff with trips away. These do improve the sense of wellbeing around the workplace. However, used alone, they risk being seen as empty gimmicks. 

Perks must be underpinned by a firm foundation and a culture which puts the employee at the heart, understands that people make the business and that their happiness is paramount. Those who feel valued, trusted, challenged, satisfied and, ultimately, happy, will be considerably more productive and boost the performance of the business. This is no longer just hearsay, but is beginning to be proved empirically by businesses and academics alike.

If, collectively and in each and every business, we invest in the happiness of the UK workforce, together it will help us begin to rebuild the economy.

Boyd Kershaw is HR Director and co-founder of Practicus, a management consultancy specialising in change programmes.

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