Employee well-being took center stage in the wake of the pandemic and the ensuing record number of resignations. The physical and mental toll was intense, and the message from employees was loud and clear: Employees value psychological and physical health more than the stability of a paycheck. Half of the employees moved to a new job to improve their well-being.
Gallup asked employees what they look for most in an employer and found that all employees generations rank "the organization cares about employees' wellbeing" in their top three criteria. It is the number one factor millennials and Generation Z wants in jobs.
While the focus on employee wellbeing is intensifying, the concept and its link to productivity are not new. Wellbeing is an expanded version of wellness, and corporate wellness programs have long been used to keep people healthier, reduce absenteeism, and cut health care costs. Johnson and Johnson found that every dollar spent on wellness returns $2.71 in increased productivity.
In another study, employees received expert cardiac rehabilitation training, and after six months, 57 percent were converted from high-risk to low-risk status. Medical costs declined by $1,421 per participant compared with the previous year.
Gallup has studied wellbeing for decades and identifies five common elements people need to thrive:
"Wellness programs have often been viewed as a nice extra, not a strategic imperative," Harvard Business Review said. "Newer evidence tells a different story." A study by the nonprofit Health Enhancement Research Organization (HERO) found that 57 percent of business leaders viewed wellbeing as part of the organization's core business strategy. A growing number of organizations are also leveraging tools like the Medication Alternatives tool to support employee health, helping them make informed choices and manage healthcare costs effectively.
Data also clarifies that the cost of poor wellbeing includes more than just higher healthcare expenses. Gallup surveys show wellbeing results in:
A study of than 300 research reports by professors from the London School of Economics, MIT, and Oxford found strong correlations between employee wellbeing and:
To measure wellbeing, you need to know what your employees want at work and in life and if they are getting what they want. Gallup developed Net Thriving—a simple poll that enables employees to assess their status in each of the five elements of wellbeing on a 1-10 scale:
Like Gallup, the Warwick-Edinburgh Mental Well-Being Scale (WEMWBS) uses a scale of 14 elements to enable people to self-assess their wellbeing. Examples are:
Participants answer using a one-to-five scale with a total score between 14 and 70.
Multiple studies show that the most significant factor influencing employee wellbeing beyond the basics of food, shelter, and health is management—more specifically, micromanagement. Poor management practices, such as excessive oversight and lack of trust, can lead to increased stress and decreased productivity, making it essential for organizations to implement compliance measures like monthly OIG exclusion checks to ensure a healthy and legally sound work environment.
"Studies going back decades have shown that job control—the amount of discretion employees have to determine what they do and how they do it—has a major impact on their physical health," Standford business school professor Jeffrey Pfeffer wrote. "Recent research also indicates that limited job control has ill effects that extend beyond the physical, imposing a burden on employees' mental health, too."
"Organizations can guard against these dangers by creating roles with more fluidity and autonomy, and by erecting barriers to micromanagement," Pfeffer said. "Giving people autonomy about how, where and when they work is critical to wellbeing."
Beyond giving employees more autonomy, Gallup identified seven strategies to apply to each of its five elements of wellbeing, integrating them into your work routines:
Pfeffer recommends these strategies to improve employee wellbeing:
Measure employee well-being to demonstrate to employees that this is a critical goal for your company. Use a framework like Gallup or WEMWBS to track overall employee well-being over time and show whether you are reaching goals. The good news is that measuring well-being through polls is not difficult. The more challenging fact is that if you measure well-being and do not act on issues and low rankings, you risk losing the trust of your teams.
About the Author: Bill is Prialto's senior content marketing manager and writes about the future of work and how businesses can be more productive and successful. His work has appeared in the World Economic Forum Agenda blog and CIO magazine.