HR · 20 March 2017

The impact of unhappy employees on small business productivity

Financial insecurity
Junior employees reported the most negative outlook on workplace happiness

Just 52 per cent of UK employees admit to working as efficiently as possible, as new research reveals the impact of unhappy employees on workplace productivity levels.

According to the research, from staff services firm Personal Group, workers who were positive about their job were 12 per cent more productive than unhappy employees.

The most common factor cited by staff members as the cause of unhappiness were the long hours they faced every day, while two-thirds admitted that nothing had happened in the last month to make them feel positive about their role.

Junior employees were found to be the most likely to suffer from low morale. Just 39 per cent of workers aged 18 to 29 viewed their role as “important” or “worthwhile”.

Compared to the over 50 age bracket – the most enthusiastic about going into work every day – the research uncovered a potential generational gap with regards to workplace engagement. Younger workers consistently responded more negatively to questions about their career.

Financial rewards, such as retail discounts and cinema tickets, could be insufficient in boosting the productivity levels of the millennial workforce. Only a fifth said that such benefits would strengthen engagement with their job.

The solution to low productivity could be in relaxed working hours alongside greater recognition and influence over business decisions.

Commenting on the research, Mark Scanlon, chief executive of Personal Group, said that the findings confirmed the link between disengaged, unhappy employees and productivity levels.

“This could explain why those who are self-employed seem to be happiest and why the UK entrepreneurial and startup scene is so successful – these people unsurprisingly tend to feel more invested in the business outcome,” he added.

Scanlon warned small business owners to take low workplace morale seriously and implement a strategy for tackling unhappy employees.

“Our survey found that money and recognition seem likely to have the greatest impact but longer term benefits like medical insurance and life plans are appreciated by around a quarter of employees.

“Ultimately, each organisation, and each group of employees within it, will have its own needs and wants. It is the responsibility of managers today to build engagement strategies and ensure their workplace is delivering its full potential and productivity,” he concluded.

How can small firms match big business on employee benefits?

Speaking to Business Advice, Richard Stewart, CEO at employee benefits provider Untangl, revealed how owners at small companies can compete with larger organisations when it comes to staff engagement.

“Offering good benefits doesn’t need to be costly or complex. New technologies and business models based around simple cloud-based apps mean small firms no longer need to be excluded.

“You also need to be smart about focusing on the benefits that matter. Whilst “perks” like fancy free lunches, a ping-pong table and team outings might help reflect the social and cultural side of your company’s work environment, it’s important to focus on the benefits that deliver real value.

“Your best people will be looking for longer-term benefits, like training and development, flexible work hours, health care, pensions and the opportunity for more time off. Committed staff with an eye on the future with your firm are also looking for solid parental benefits like paid maternity and paternity leave, and childcare programmes.”

Find out which eight health and wellbeing apps to support your workforce

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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