Are Small Business Employees Generally Happier?

According to Washington State University, disengaged employees cost the economy at least $300 billion a year. That’s just a safe estimate.

For the short time I worked in telemarketing, before becoming a writer, I quickly came to loathe cubicles. In a vast room with tons of other people talking, tucked away from sight, I
 languished at my desk. I felt numb. No doubt I sounded like a robot on the phone. My numbers reflected my disconnect and lack of happiness. I had a lot of
 sick days and no motivation.

The business I worked for was anything but small. It was a churn-and-burn lead generation machine in which I was but a cog. Now that I work for myself, I’m
 able to take a step back and analyze why the machine was faulty, why the turnover rate was so high.


Disengaged employees by the numbers

For one, according to USC Dornsife, a workplace model with cubicles
 and maximized use of office space is a hold out from old times and from recessionary periods.

While larger businesses are maximizing their use of space, they’re minimizing employee
 motivation and happiness. This results in businesses losing $450 million to $550 million a year in profits. And, unhappy employees take around 15 sick days
 a year, something I could once identify with. Anyone who takes that many sick days each year is not engaged with their work or the company culture.

According to Washington State University, disengaged employees cost the economy at least $300 billion a year. That’s just a safe estimate.


Small business employees, inherently happier

In contrast, the people I know who work in small offices with a tight team are happier with their jobs than I was, and they’re motivated. Small businesses are perfectly
 equipped to encourage their employees. Here’s a look at why this is often the case.


It’s about understanding

Have you ever been stuck at the airport, unhappy about the layover, and heard someone you couldn’t see laughing hysterically from somewhere in the
 terminal? If you don’t understand why the person is laughing it’s kind of—well, annoying. Likewise, if you’re stuck sitting at a desk and don’t understand
 why the CEO makes a certain decision, it’s frustrating.

In an article on what drives employee motivation, WSC identifies the basic human need of understanding. Employees are more motivated if they know
 exactly what’s going on with the company.

To back this up, according to TSheets Time Tracking, communication and transparency from management is the number one
 employee happiness factor. Yet only 42% of employees know their company’s vision and values.

In a small business, the vision and core values communication often come directly from the owner. It’s the owner who is most equipped to share this information
 and cultivate culture. Small environments make it easier for owners to communicate with everyone in the office. Employees often feel valued when owners and managers are
 transparent and communicative.


It’s about achieving.

Going back to the airport analogy, if you feel stuck and are in fact stuck in one place, it’s more than just annoying—it’s infuriating. The same applies to

Achievement can come in many forms. It doesn’t have to just be advancement or raises. It helps if it’s something concrete. According to TSheets, companies
 who give their employees a gym membership improve morale by 71%. These employees feel their loyalty has helped them earn something beyond more time at the

Small businesses are uniquely qualified to help their employees achieve more, both personally and professionally. As the business grows, there’s room for advancement. Fulfilled employees are also more engaged. On average,
customer retention is 18% higher
 when employees are highly engaged. If a small business uses size to its advantage to promote employee engagement, it can retain more customers, and it
 position itself for growth.


It’s about bonding.

While you’re at the airport, if you make a connection with someone, the layover will fly by a lot faster. You’ll be happier you were there. We have
 the basic need to bond with others—it’s a powerful motivator.

As another example, a study by the Mayo Clinic
 found people are more motivated to lose weight when they are: a) in a small group; and b) given a cash incentive.

Small groups, and the bonding people do
 in them, can help motivate individuals. So can cash. This makes sense. I discussed how being able to achieve, and to earn, helps motivate people.

But interestingly enough, this doesn’t mean a small business needs to focus on high compensation levels. A Dale Carnegie study found that employees at small businesses value transparent
 communication over increased compensation, and that managers put too much emphasis on compensation. Motivation is already built in when the bonding,
 understanding and communication are strong.


The bottom line

Ultimately, the Carnegie study found that 36% of small business employees are “actively engaged,” vs 29% of larger business employees. As you might expect,
employee engagement and motivation—in other words, high morale—impact the bottom line. Two statistics jump out from a Marketing Innovators white paper:


  • Companies with high employee morale outperform industry counterparts by about 20 percent

  • Emphasizing high engagement yields a 47 percent increase in market value


Everywhere I look, research corroborates these findings. But I don’t think it’s necessary to dwell on statistics. Common sense says happy, engaged and
 motivated people do a better job. Small businesses are a great place for owners to promote engagement, so that their employees, and their business,


This article has been edited and condensed.

Daniel Matthews is a freelance writer from Boise, Idaho with a passion for changing the world through writing and sharing ideas. He’s written for Social Media Today, Social Media Impact, Datafloq, and Smart Data Collective. Connect with @danielmatthews0 on Twitter.


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