Author: Sarah Jefferys
Why happiness at work matters
Research consistently shows happy employees are:
- 13% more productive1 and can support improved customer or client satisfaction2
- More likely to stay at the organisation, reducing costly turnover2
- More likely to advocate for an organisation, especially on social media
Higher productivity, lower turnover and stronger advocacy all contribute to improved performance and reduced operational costs.
Gallup estimates that low employee engagement costs the global economy $8.9 trillion annually3 in lost productivity. On the flip side, highly engaged teams can generate up to 23% higher profitability.4
A moment to reflect
For those of us working to improve the employee experience, International Week of Happiness at Work5 is a chance to pause and ask:
Are we really designing workplaces where happiness can thrive?
At Gallagher, we believe happiness at work starts with people feeling valued and empowered to grow, safe to be themselves, connected to a meaningful purpose, and supported through life’s ups and downs.
The role of reward in workplace happiness
Reward can be a key enabler of or a detractor from employee happiness. When people feel rewarded – not just financially, but through growth, appreciation and wellbeing – they’re more likely to feel satisfied, engaged and committed. When Reward goes wrong, employees can feel unfairly treated, demotivated and demoralised.
Key areas where a reward strategy can directly support happiness at work
Pay transparency
Transparent and equitable reward systems foster trust and belonging. When employees understand how pay decisions are made, they’re more likely to feel valued and included. This also helps reduce bias and supports broader inclusion goals. Transparency also encourages open conversations about growth and development, which contributes to a more positive workplace culture.
Total reward strategies
A well-rounded Total Reward Strategy integrates financial, emotional and social wellbeing. Personalised and flexible benefits ensure employees are supported in ways which are meaningful to them – whether that’s mental health support, financial planning or benefits which support their lifestyle. Gallagher’s latest UK Workplace Trends Report finds employers increasingly appeal to a diverse workforce with different preferences and that successful organisations support their people’s wellbeing in an inclusive and holistic way.
Recognition
Recognition can be a low-cost, high-impact tool. When embedded into everyday culture, it helps employees feel seen and appreciated for their efforts. This boosts morale, strengthens team cohesion and supports retention. Research has found that symbolic awards (thank-you notes, certificates) can provide a big morale boost – especially in high-stress environments, helping employees feel seen and appreciated.6
Flexible working
Five-years post-COVID, and hybrid and remote working arrangements remain central to many employee expectations. Reward structures must evolve to support these models, ensuring fairness and consistency across locations and working patterns. This may be by updating approaches to location-premiums, rethinking how performance is measured and rewarded in less visible environments, or ensuring that benefits and recognition are equally accessible to all – regardless of where or when people work.
Reward, brand and culture
Reward frameworks that align with an organisation’s brand and purpose are more likely to drive engagement and retention. When reward systems reinforce desired behaviours and values, they help shape a culture where happiness and performance go hand in hand. This alignment creates a sense of meaning and consistency for employees, making rewards feel more authentic and motivating – not just transactional.
Making happiness a strategic priority
Happiness is a measurable, impactful driver of performance, retention, and innovation. As we mark International Week of Happiness at Work, let’s commit to making happiness a strategic priority – not just a seasonal celebration.
How we can help
We have the expertise to work with our clients with everything from designing a new reward framework to undertaking pay benchmarking, tailored to your organisation. Get your journey started with us today!
