Corporate leaders are increasingly recognising that what’s good for employees is good for their business’ bottom line, both in terms of productivity and profits. While a focus on employee well-being was once seen as the preserve of progressive corporations or at best an optional extra, nowadays it’s considered a fundamental part of running a business successfully.
A recent survey of over 175 organisations conducted by Management Today, together with financial insurers Unum, revealed that two-thirds of managers and business leaders consider employee well-being to be the responsibility of the employer. Of course, in harsh economic periods the survival of the business itself may depend on implementing policies which don’t further employee well-being. For example, redundancies and staff cutbacks, together with freezing or reducing pay and the quality of working conditions, can increase employee stress to the detriment of the company as well as individuals. However, with the UK economy showing continued signs of recovery, businesses are once again recognising the benefits of a culture of care in the workplace.
Most employers don’t need statistics to tell them what they instinctively know – that a healthy, engaged and motivated workforce is more productive and more profitable for their business. Retaining the best and brightest employees is critical for companies – in terms of performance, institutional knowledge and the maintenance of good relations with customers and clients. Implementing well-being policies to ensure staff stay loyal and in their jobs costs far less to companies than the cost of hiring and training replacements.
What Contributes to Employee Well-being?
Contrary to what some employers may think, employees are not motivated exclusively – or even primarily – by financial incentives. While it’s important for companies to offer competitive packages if they want to retain their best staff, the happiest workers are not the highest paid but the most highly engaged. A 2012 survey of six of the world’s leading economies by Kenexa found the UK ranked last in terms of employee engagement levels. Employers may recognise the benefits of a highly engaged workforce but more still needs to be done on a practical level.
According to Management Today’s survey, employees were most likely to be happy if they felt empowered to do their job as part of a team, had their achievements properly recognised and felt that employers listened to their problems and concerns. These are all factors that employers could address without entailing much additional cost, and the reward in terms of increased productivity could be significant.
Flexible working practices – including working from home, flexitime, job sharing and other temporary or fixed arrangements – also play a significant part in increasing employee well-being. Yet this is another area in which the UK lags behind other countries, despite evidence that companies with more flexible working practices have higher overall productivity and profit levels. Flexible working also encourages a more diverse workforce – including more skilled women workers – because which has been shown to improve business performance.
Employee well-being also depends on employers offering a reasonable level of financial protection to their staff. This includes offering a good pension scheme as well as some form of income protection. The ‘pension pot shortfall’ is a concern not only for individual employees but also for the current government, who have introduced automatic pension enrolment for all UK workers over the next few years. Supporting staff financially when they fall ill is also important for employee well-being – more than half of respondents to Management Today’s survey cited this as a significant factor in encouraging employee loyalty.
While salaries and benefits are important to employees, many of the factors that contribute to employee well-being are less tangible. Companies that offer clear leadership and good career progression, for example, are likely to have happier and more engaged workers. Employers must tackle the roots of employee dissatisfaction through a holistic approach rather than throwing money at any single problem.
Giving staff more flexibility, more independence and more recognition will go a long way to boosting employee well-being. And with a recent study by the University of Warwick showing that happy employees are 10% more productive, that will go a long way towards boosting your business profits too.