21 Sep Happy Employees vs. Successful SaaS Apps
“Happier employees, higher profits” may sound trite, but what if we look at SaaS software companies specifically? Does a team’s high morale necessarily translate into a superior SaaS product?
We’ll share the insights from the relevant studies and APPEALIE’s research to help you understand the role of employee well-being in the success of your SaaS product.
Employee well-being vs. firm performance
Various studies of employees’ well-being reveal that there is a strong positive correlation between how employees feel at work and how they perform. Happier workers tend to be more productive and thus bolster a company’s bottom line.
One of the recent studies analyzed the Gallup Employee Wellbeing Database to try and tie the well-being of 1,882,131 employees with their companies’ performance:
The graph represents the correlation between employee satisfaction and firm performance, measured in customer loyalty, employee productivity, profitability, and staff turnover.
As you can see in the graph, satisfied employees are more productive, which results in higher customer loyalty and positively affects company profits.
At the same time, employee satisfaction has a negative correlation with staff turnover: employees are less productive in an environment where they are dissatisfied or can’t bond with their teammates.
On the other hand, happier workers choose to stay with firms longer, to see the results of their efforts come to fruition.
Another research by Jessica Pryce-Jones, author of Happiness at Work and CEO of iOpener, takes the “happier employees, higher profits” adage even further with some eye-opening stats. According to the research, happier employees are:
- 180% more energized
- 108% more engaged
- 50% more motivated
- 50% more productive
Let’s see what’s happening with workers’ happiness versus productivity in the software industry.
SaaS developers’ well-being vs. company performance
Software engineers are the most valuable assets for any SaaS company. After all, they build the core of a software product that companies live off.
So if happier developers bang out better code with fewer bugs and end up creating more advanced SaaS products, it makes all the sense in the world for SaaS companies to invest in their happiness, right?
Are software developers happy?
Let’s see if SaaS software developers are a happy bunch across the entire software industry. In fact, there’s plenty of surveys saying software engineers are overall satisfied with their jobs.
In their 2019 survey, Blind — an anonymous social network for the workplace — asked 10,677 tech employees if they were happy at their current workplace. The majority (66%) answered with “Yes,” while 33% said “No.”
The authors of Rethinking Productivity in Software Engineering (2019) employed some elaborate scientific methods to arrive at practically the same conclusions:
The graph shows that the majority of software developers are happy with their jobs, while there is still room for improvement — all who scored below zero.
Software developers are indeed a slightly happy group.Rethinking Productivity in Software Engineering (2019)
Another finding that the authors share is that happier engineers are up to 6% more productive. Two key conclusions from their study are:
- Science says the industry should strive for happy developers.
- Happiness and unhappiness bring a plethora of benefits and detriments to software development processes, people, and products.
No wonder every SaaS company owner would prefer to have the 66% of happy developers (from the Blind study) working on their SaaS products rather than their less happy colleagues. Because even a 6-percent gain in productivity will set the company ahead of the competition.
Room for improvement
As you probably noticed, even though many software engineers are happy, technology-driven companies can do more to spread happiness among their tech employees. And it’s especially true of SaaS companies.
Another study by untapt, an AI recruitment framework, has revealed that tech workers in the software industry are only moderately happy compared to engineers who code in companies operating in retail and education verticals.
Put simply, software engineers developing another Slack or DropBox are only moderately happy (4.91 out of 10), and could do with more happiness.
The returns are more stable, feature-rich, and eventually more profitable SaaS products. Of course, no one wants an unhappy developer because dire things may happen:
I deleted the code that I was writing because I was a bit angry.
I have deleted entire projects to start over with code that didn’t seem to be going in a wrong direction.Rethinking Productivity in Software Engineering (2019)
Besides, you never know if a developer is sweating over a successful launch of your SaaS product… just to get their resume into shape for a new place. Here are some top voted Reddit remarks from engineers discussing another study that underlines the importance of being happy while coding:
So, let’s keep that in mind and take a closer look at SaaS companies.
APPEALIE: happy engineers = better SaaS apps
Our study at APPEALIE confirms the idea that happy and engaged software developers code better SaaS products. To get there, we compared the Glassdoor and G2 Crowd ratings for a little over a hundred SaaS companies.
Glassdoor provides decent insight into employee engagement, and G2 Crowd is arguably the #1 software reviews platform, which makes them ideal tools to spot the correlation between SaaS companies’ product quality and employee well-being.
As you can see, the higher a SaaS company ranks in Glassdoor, the better its G2 Crowd rating. It makes more sense for happier workers to churn out better products than for low-quality products to make employees grumpy.
Yet, quite a few SaaS firms with decent SaaS apps (4 to 4.5) sit right in the middle on the Glassdoor scale (3 to 4), which means there is still potential to make their employees happier.
We see this situation as an opportunity for SaaS companies to double down on improving their employees’ well-being. If moderately happy workers are already building decent SaaS products, imagine what would highly engaged employees do.
We believe that in return you’ll be getting glowing reviews at Glassdoor, like these from LinkedIn employees (the highest ranking company with 83% of happy employees as per Blind’s survey):
And your SaaS product will start yielding higher returns. To give an example, LinkedIn revenue jumped a solid 25% in Q4 2019.
APPEALIE Contributors: Matt Harney, Konstantin Kalinin