How Important is Keeping Your Employees Happy to Your Business?

Happy Employee, Happy Company

Some of you may remember I had previously mentioned my experience of owning a bar. As a former bar owner, I learned a lot about the dynamics involved in an employer-employee relationship.  But honestly, it does not take rocket science to figure it out.

Every employer that is trying to run a successful business should understand that employees for most businesses are the very foundation to this success. You’ve probably heard the saying “happy wife, happy life.”  Similarly, it should be said “happy employee, happy company.”  The truth is that the workforce of a company serves as its very engine.  If the engine is not working properly, neither will the company

When I was a bar owner, I had what I consider a high employee retention rate. I accomplished that by creating a work environment that implemented some of the ideas that I speak about later in this article, ultimately making me the beneficiary of a type of loyalty from my workers that made me very proud.

 When I took over the bar from the former owner, the work environment was very toxic.  The waitresses had divided into clans that fought everyday.  Unfortunately, I had to fire a few of my employees. I never took this undertaking lightly.  However, it is often a necessary task that has to be done to protect the employees that are doing a good job from those that are not a good fit for the vision you, the employer, has for the  business.  

While I wrestled with my conscience about having to dismiss an employee I came to realize that my actions were the better of two evils.  First, I noticed it improved morale with my other workers.  Two, some of those ex-employees eventually returned and asked for their jobs back.  After being promised better behavior as team members, I decided to give them a second chance.  And guess what?  That is exactly what I got.  I never regretted re-hiring any of those workers I gave a second chance.  They returned as not only more productive employees, but they seemed to be happier ones too.

Oh, one other thing.  Former employees of the last administration came wanting to work for me, after learning of the changes I had implemented.  For me that was an affirmation of what I was doing was the right thing.

Talk With A Friend And a Fellow Business Owner

Recently I had a discussion with one of my friends who recently opened a local coffee shop. His business was struggling a bit.  After a few discussions I was able to put together a picture of some of the most likely reasons that after a year in business his shop was not doing as well as he would have liked.  

The first thing I noticed was his mindset about baristas and employees that work at such places like a coffee shop.  He thought it was an inherent attribute to have a low employee retention rate for businesses like coffee shops and bars.  

While I admit that the turnover rate may be a bit higher than some other industries, that is partly because it’s considered to be  a low-entry level job. Simply, some take on low-level entry jobs, or positions that require little training or qualifications while working their way through college or some other life event, and just move on. Just like people who work in a local grocery store as a cashier or stock person.

I am not, however, of the mindset that said employees are to blame, at least not for the most part. The truth is that many low-entry job positions are filled with the same workers who stay on for months if not years with many companies. One of the main reasons was because the policies of these companies demonstrated the importance of keeping their workforce happy.

As the discussion continued with my friend, I was reassured of my initial belief of what was one of the main reasons my friend was growing frustrated at the current affairs of his business.  He discussed talking to at least one other particular coffee shop owner.  What became apparent was the shared outlook of these two to the people they rely on to run their business:  Little or no respect for them and their positions. They took it for granted that their employees would not be around for long and they just did not feel that warranted a high level of respect for them.  

Herein lies the problem, at least I think so.  If, as an employer, you have a lack of respect and empathy for your workers, you will eventually demonstrate this mindset to them in different ways, including lack of appropriate or adequate compensation.  In turn, the employees will be less likely to develop a sense of loyalty to you and your business and seek greener pastures elsewhere. As an employer with this mindset, you are doomed to the rinse and repeat cycle of hiring and training another employee who will just quit shortly thereafter. Something that eventually cuts into any company’s bottom line. I think Gary Vee summarizes it best in the following short YouTube video.

Here are some of the concepts I implemented in my bar business and that I continue to do so currently to keep my employees and team members happy and loyal.

1. Enhancing Productivity and Innovation

Employee happiness is directly linked to increased productivity and innovation. Happy employees are more engaged and committed to their work, often going above and beyond their required tasks. This enthusiasm fosters a creative and dynamic environment where new ideas flourish. Research has shown that happy employees are more adept at solving complex problems and coming up with fresh solutions, driving the innovative edge a business needs to stay competitive.

2. Reducing Turnover and Recruitment Costs

High employee retention rates are critical for reducing the costs and disruptions associated with turnover and recruitment. When employees are satisfied with their work environment, they are less likely to seek opportunities elsewhere. This stability saves businesses significant resources in recruiting, hiring, and training new staff. Additionally, long-term employees develop deep knowledge and skills that are invaluable to the organization’s success.

3. Strengthening Team Dynamics and Morale

A positive work environment where employees feel valued and content strengthens team dynamics and overall morale. Happy employees tend to collaborate more effectively, communicate openly, and support one another. This synergy enhances team performance and can lead to better outcomes on projects. Furthermore, a positive workplace culture attracts top talent and can elevate a company’s reputation in the job market.

4. Improving Customer Satisfaction and Loyalty

Employees who are happy in their roles are more likely to provide excellent customer service, leading to higher customer satisfaction and loyalty. Engaged employees tend to be more attentive, proactive, and responsive to customer needs, which can significantly impact customer experience and brand perception. Satisfied customers are more likely to return and recommend the business to others, driving growth and profitability.

5. Fostering a Healthy Work-Life Balance

Prioritizing employee happiness often involves supporting a healthy work-life balance. This can be achieved through flexible working arrangements, wellness programs, and an understanding of personal needs. Employees who feel that their employer cares about their well-being are more motivated and less prone to burnout. This not only benefits the employees on a personal level but also contributes to a more vibrant and productive work environment. They’ll be happy, and so will you!

Key Takeaways

  1. Foundation of Success: Employees are fundamental to a business’s success. The author’s experience as a bar owner highlighted that a happy and well-functioning workforce is akin to a well-operating engine for the company.
  2. Improving Morale: A positive work environment leads to high employee retention and morale. The author’s actions in transforming a previously toxic workplace into a positive one led to increased loyalty and productivity among employees.
  3. Employee Respect: Respect for employees is vital. A lack of respect and empathy can lead to high turnover rates and a continuous cycle of hiring and training, negatively impacting the business’s bottom line.
  4. Benefits of Employee Happiness: The article outlines several benefits of employee happiness:
    • Enhanced Productivity and Innovation: Happy employees are more engaged, creative, and better at problem-solving.
    • Reduced Turnover and Recruitment Costs: High employee retention saves resources in recruiting and training.
    • Stronger Team Dynamics and Morale: Positive work environments boost collaboration and overall team performance.
    • Improved Customer Satisfaction and Loyalty: Satisfied employees are likely to provide better customer service.
    • Healthy Work-Life Balance: Fostering employee happiness involves supporting their personal well-being, leading to a more productive work environment​​.

Other related articles or book excerpts:

How to Start, Run and Grow a Successful Bar and Tavern Business

Opening a New Restaurant: 3 Things You Should Do First

Start Your Own Business: The Only Startup Book You Will Ever Need