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Happy Employees Drive Profitability

“I’m a firm believer that people need to be happy in the job that they’re doing. If you’re not happy in the job you’re doing, you’re not going to do a very good job. You’re not going to be satisfied at the end of the day, no matter how much money you’re making.” – Mike Bailey, owner of Bailey Enterprises in Riverton, WY

There is a hidden profit leak in many small businesses. Unhappy employees are profit suckers in a small business. Payroll is typically one of the largest expenses in a small business. It’s also the source of a significant hidden cost—employee disengagement. Employee disengagement is a serious threat to the profitability of your small business.
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During a Pumpkin Plan Kickstart Mike and I conducted a couple of years ago, I walked our participants through calculating the cost of employee disengagement in their small businesses. 

The cost of employee disengagement ranged from several hundred thousand dollars to millions of dollars—ANNUALLY—in these small businesses. OUCH! I don’t know about you, but I don’t like losing money, especially thousands and thousands of dollars. Yet, this is happening every day in small businesses across the country.

So, should you care if your employees are happy? YES! You should care a lot. Employee happiness drives engagement and profitability. A happy employee is a high performing employee.

Let’s examine the value of a happy employee.  An extensive research program with over 32,000 participants conducted since 2005 by the iOpener Institute for People and Performance at work concludes that happiness at work drives employee engagement.[1] Employees who are happiest at work:

  • Use 1/10 the sick leave of their least happy peers
  • Are 6 times more energized
  • Express the intent to stay twice as long in their organizations
  • Report being “on task” 80 percent of their work week, compared to their unhappy peers who report being “on task” a mere 40 percent of their work week.

What should you do if you suspect your employees are unhappy and disengaged? First, take a hard look in the mirror. Are YOU happy at work? A business owner recently shared with me that he was struggling and commented, “The fish stinks from the head down.” So true!

If we as owners in our businesses are struggling for whatever reason, our frustrations will permeate the cultures of our businesses. If you’ve lost your passion and enthusiasm for what you do everyday, reach out for help. Coaching is a great way to reconnect with your passion (in fact, this is often the FIRST place I start with business owners I coach).

If you are happy and thriving, yet you have employees who seem unhappy and disengaged, it’s time to talk with them. Pull them aside and in a supportive, non-threatening manner, be genuinely curious about what is going on for them.  Use what you learn to coach these employees to be happier in their work, or support them in finding a position (either in your company or outside your company) that is a better fit.

At Tap the Potential, we coach business owners to be more effective leaders. People are complex. No one expects you to have a PhD in psychology and run your business. If employee problems are causing you to struggle, reach out! We are happy to help you with this.

[1] Jessica Pryce-Jones. Positive Profits: How happiness at work impacts the bottom-line. Choice volume 11, number 4 pp 27-28. Dec 2013 issue.

  Sabrina_blog picDr. Sabrina StarlingThe Business Psychologist™ and author of How to Hire the Best specializes in transforming time-, energy- and cash-sucking small businesses into highly profitable, Great Places to Work! 

Employee problems can be one of the biggest stumbling blocks for any business owner.  With her background in psychology, and years of coaching small business owners to extraordinary results, Dr. Starling knows what it takes to find, keep and get exceptional performance out of your biggest investment-your employees. Access her comprehensive video training 5 Secrets to Exceptional Employee Performance (her gift to you!) at

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