From the Health of Workers to the Wealth of Business: Why the Shift Towards Employee Well-Being Matters

By Nazila Vali, Deputy Team Lead, Business Call to Action and Sahba Sobhani, Senior Private Sector Advisor at UNDP
Nov 4, 2019 1:00 PM ET
Blog

It’s only been 10 years since the concept of well-being and its measurement as a component of a country’s GDP was developed and discussed globally. Nobel Prize winning economists Joseph Stiglitz and Amartya Sen were the pioneers who argued for the need for an array of carefully-chosen figures, with a better understanding of the role of each of those numbers. Today, businesses are gradually adopting the concept and realising the importance of individual well-being inside and outside the workplace.

According to the International Labour Organization, workplace well-being “relates to all aspects of working life, from the quality and safety of the physical environment, to how workers feel about their work, their working environment, the climate at work and work organization”.

Employers can have an influence on an individual's sense of well-being in the way they run the workplace. Well-being typically relates to general working conditions, but today it is also linked with the way that work is organized and the competencies of the management.

Rather than only mitigating health-related problems resulting from work, many organizations are choosing to proactively adopt practices to increase the well-being of their staff, believing that it improves workplace performance in profitability, labour productivity and the quality of outputs or services. Job satisfaction, including training, skills development opportunities, how much autonomy employees have in their role, and how much scope they have to use their own initiative and influence decisions, also has a strong, positive link with workplace performance. 

Many companies and investors see this kind of human capital management as an indicator of long-term prospects. For example, Business in the Community’s “Workwell Model” places well-being and health as strategic issues at the core of organizational culture, demonstrating the business benefits of taking a proactive approach to employee well-being. This model has been recognized as an indicator of longer-term financial performance.

When organizations focus as much on well-being as they do on productivity, it results in a simultaneous boost in both the business outputs and health levels of workers. In our research on Inclusive Business Management Practices, we found that inclusive business integrate employee well-being not only as a moral imperative but also as a strategy to boost productivity and ensure the success of their initiatives.

Take Crepes & Waffles, the number 1 restaurant chain in Colombia with more than 162 outlets in Latin America and Spain and over 5,000 employees worldwide. For the past 10 years, the company has been running an “Arts Academy”, a platform supporting the development of all its personnel, from administrative to C-suite. The platform uses art, combined with methodologies based on the cultivation of integral consciousness and learning, to generate processes that transform the relationship of the individuals with themselves, with each other and with the social and natural environment. This is intended to invigorate the sense of community among Crepes’ staff through a process of profound individual transformation and social change.  

The benefits of focusing on employee well-being are significant. At just 12 percent, Crepes & Waffles has the lowest turnover rate in the industry, compared with an average of 35 percent. Crepes & Waffles staff members also stay an average of 11 years.

The management encourage the staff to grow and appreciate one another, regardless of their social-economic status. Dignifying lives of employees and people involved in Crepes’ supply chain is crucial for the sustainability of the company. Because the employees are seen and treated as critical to the company’s DNA, they also feel part of something greater and become partners that guarantee the quality of their business. 

In our report, we provide guidance and support for inclusive businesses that wish to improve their management practices for inclusive business success. Firms can improve their employee well-being with the following tactics:

  1. Align organizational practices to support employee well-being: The first and perhaps most fundamental step is making employee well-being part of your business strategy. This needs to be followed by a thorough assessment of the health and sense of well-being of your employees and the right corporate policies.
  2. Promote well-being by providing opportunities to be in control over and influence one’s own work: Develop policies for flexible work and include employees in decision-making processes.
  3. Reduce absenteeism and increase high quality performance with a proactive approach to health: This can include, for example, adopting digital technologies for organizing work more flexibly and promoting workplace well-being and employee health, and also supporting access to professional health-care and reliable health information.

It is important to emphasise that promoting employee well-being should never come at the price of fair salaries, good contracting and compliance with labour rights. We invite you to explore the full typology of inclusive business management practices, assess the performance of your company and learn from experts in the inclusive business field by visiting our online tool