A diverse group of employees sit casually in an office, smiling and talking with their manager.
Employers who want to retain their staff members must invest in employee happiness, from embracing flexible work arrangements to providing opportunities for growth. — Getty Images/ fizkes

If you think most of your employees are happy and engaged, you may want to think again: Only 32% of U.S. employees report feeling engaged in the workplace — the lowest in a decade.

Businesses with high employee engagement see a 23% difference in profits than those with disengaged employees, so it’s in a company’s best interest to prioritize and proactively encourage worker satisfaction. Here are ideas for how your small business can keep employees happy in the workplace.

Embrace employee autonomy

Employee autonomy impacts job satisfaction and enables workers to tailor their responsibilities to fit their working styles within a flexible framework. This working model doesn’t equate to a lack of rules — rather, it promotes a more adaptable approach to work.

Allow employees to choose their working schedules and design their own work processes, set up flexible deadlines, encourage a hybrid working environment, and enable remote working options to embrace autonomy in your workplace.

[Read more: 3 Simple Ways to Improve Employee Loyalty in 2024]

Provide incentives

Acknowledge employees’ hard work by rewarding them with incentives. Whether it's through work-from-home days, stress-relief activities like bringing in dogs from local shelters, financial bonuses, or creative rewards like extra personal days, offering incentives can boost employee morale and strengthen loyalty to your company. This, in turn, can lead to improved employee loyalty, productivity, and even happiness.

Map out growth opportunities

Simply put, a company is more likely to retain workers when it invests in its employees’ professional growth. Offer learning opportunities such as online courses and access to resources that will help employees develop skills they can use to grow within the company. Promoting an environment that encourages continuous learning and skill development boosts employee satisfaction and loyalty while simultaneously building a more competent workforce

Offer flexible work options

Many employees who got a taste of remote work during the COVID-19 pandemic have been eager to continue with either remote or hybrid work options to create a better work-life balance. If you can adopt this in your business model, offer your team the chance to work remotely and mutually determine which days they would come into the office.

[Read more: How the Remote and Hybrid Work Era Impacts Employers]

Be transparent

Establish effective communication methods in your business to ensure transparency across your teams. A lack of workplace transparency can lead to employees who feel unsupported, demotivated, and unheard, ultimately impacting their workplace satisfaction and productivity.

Adopt transparent practices like open-door policies, robust feedback systems, and clear decision-making processes. Doing so will ensure teams are up-to-date with internal communications, helping to avoid miscommunications and arming them for success.

Prioritize employees’ mental health and well-being

Employees feel valued when their employer cares about their overall well-being, which impacts employee engagement. Individuals who feel valued will more often try to return the favor and value the business more. If you notice an employee is struggling or not performing to their usual standard, reach out to ask how you can better support them — acknowledging that you see the employee struggling can help them feel heard and motivate them to perform better.

[Read more: 12 Wellness Benefits You Can Offer Employees]

Create an authentic workplace culture by adapting to employee needs and leading by example.

Encourage professional development

Personal and professional development opportunities, such as mentorships, workshops, or networking events, allow employees to build essential skills to be the best at their jobs. Engagement rates are higher when companies invest in their employees. The more skills an employee acquires, the more they will be motivated to perform well — especially when they feel supported by their employers.

Make time for socialization

About one-third of our lives are spent at work, so creating a friendly environment with co-workers at all levels is critical for morale. Socializing — including taking employees to lunch or dinner after work, or walking on the weekends outside of work — can increase the bond you have with your employees. This allows your team to connect on a personal level, improve relationships, and foster a sense of trust and openness that drives creativity and innovation within the workplace.

Implement employee feedback

Receiving feedback is a huge part of job development. For employees, receiving positive feedback is motivating, and highly motivated, skillful employees contribute to twice the revenue growth and profit margins. For business owners, asking for and acting on feedback shows that you’re listening and value what employees have to say, leading to a more engaged workforce.

Recognize a job well done

There’s nothing more demoralizing for an employee than working hard on a project just to be met with a thankless response. Show your appreciation by recognizing employees’ efforts when they do a good job. This doesn’t have to be a big gesture or expensive bonus — a special shoutout in a team meeting or another small token of appreciation can demonstrate to employees that their work matters and encourage them to keep it up.

Create an authentic workplace culture

Workplace culture is shifting, as data shows 35% of employees have seen “dramatic” changes in their company culture within the past few years. These changes come as employees seek more flexible, inclusive, and engaging environments.

Create an authentic workplace culture by adapting to employee needs and leading by example. Most polled employees feel leaders and managers drive a business’ workplace culture, proving that creating an authentic culture begins at the top.

Additional reporting by Lauren Wingo and Lauren Kubiak.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

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