Research shows there is direct link between employees' overall happiness and their output and performance. Learn why employee engagement is becoming a fundamental business imperative, and not a nice to have.
The World Happiness Report is a global study by compiled by the United Nations and US analytics company Gallup, which ranks how people feel about their lives in more than 140 countries. It measures things like life expectancy, social support, income, freedom, perception of corruption and generosity - making it a snapshot of a nation's overall wellbeing.
In the 2025 report, South Africa ranks 95th, down 12 places from last year. But here's the bright side: we're still one of the top four happiest countries in Africa, just behind Mauritius, Libya and Algeria.
Why the dip? South Africa's rankings in the income and perception of corruption indicators, dropped significantly highlighting concern around the economy, unemployment and inequality and issues of governance which all affect how optimistic people feel about their lives - especially when it comes to mental health and workplace wellbeing. And that's something both employers and employees can influence.
Well, you may ask how does this effect companies and businesses? You've heard the expression, 'Happy wife, happy life'. Well according to international organisational research, happy employees equal a healthy and resilient company culture, happy customers and that can translate to a healthy bottom line. So, think of it as 'Happy employees, happy workplace, happy business.'
Research by Oxford University has shown that happy employees are 13% more productive, work faster and are more collaborative. The research is backed-up by the Gallup State of the Global Workplace: 2024 Report results that show a direct coloration between employee mental health, wellbeing and engagement and the overall performance of an organisation.
"When employees find their work and work relationships meaningful, employment is associated with high levels of daily enjoyment and low levels of all negative daily emotions. Notably, half of employees who are engaged at work are thriving in life overall," the report states.
Wellbeing and Engagement
In the results from a 2024 meta-analysis study, included in the State of the Global Workplace: 2024 Report, of more than 183,000 business units across 53 industries, 90 countries and involving 3.3-million employees, Gallup found that high-employee engagement business units experience significantly higher employee wellbeing - as well as higher productivity, profitability and sales.
Statistics from the study of teams with high employee engagement include:
- 70% increase employee wellbeing
- 78% decrease in absenteeism
- 22% increase in organisational citizenship
- 14% increase in productivity
For the businesses this positive sentiment translated into:
- 21% increase in turnover for high-turnover organizations
- 51% increase in turnover for low-turnover organizations
- 28% in shrinkage in theft
- 10% increase in customer loyalty/ engagement
- 18% increase in sales
The key to a happy and engaged work force are intentional leadership strategies that involve employee engagement as a business imperative.
To successfully drive employee engagement, leadership needs to emphasise wellbeing at work. Businesses that champion mental health and overall wellness (social, familial, physical, financial etc) have stronger teams. While not all employee mental health issues are related to work, providing employees with supportive and enabling environments can help them manage and some instances mitigate personal stress.
Businesses with high employee engagement that the Gallup Meta-Analysis identified had the following in place:
- Training for managers to be effective coaches who give meaningful feedback and help employees understand their purpose and impact in the organisation.
- A company culture based on trust, organisational, team and personal goal setting, regular and consistent team meetings and one-on-one catchups and/or conversations between managers and team members and psychological safety.
- A company culture that encourages support and social interactions amongst colleagues.
- Tools to consistently gauge employee morale and the willingness of leadership to listen and respond.
- Mental health programs through an Employee Assistance Programs (EAPs) like Healthy Company, onsite-coaches or counsellors, company wellness days, physical activity facilities and/or clubs, financial literacy and planning support programmes, webinars on mental health and community volunteerism projects and opportunities.
The points above speak to some of the key drivers measured in the World Happiness Reports.
Autonomy and work-life balance
The 2025 report highlights how countries like Finland and Denmark, which consistently rank high in happiness, generally have strong work-life balance policies. These include generous parental leave, ample holiday time and flexible working arrangements, which all contribute to the wellbeing of their citizens
Globally, with the introduction of working from home (WFH) or remote working during the Covid pandemic, employees where afforded greater autonomy and many reported a greater work-life balance - which for many people is increasingly becoming an indicator of job satisfaction and/or happiness.
Countless research has shown that companies that offer flexible work arrangements, hybrid schedules, and clear boundaries see increased job satisfaction and that employees with a sense of autonomy over their schedules report higher happiness levels equating to increased productivity. In a time when many employers are demanding that their employees return to the office five-days a week due to concerns regarding output and productivity, how often is the link between happiness and productivity made?