Employee Well-Being Matters In Corporate Strategy

Today’s corporate world recognizes the importance of looking beyond profits. But how is this shift reflected in the way companies treat their employees?

Deloitte’s Third Edition of the C-suite Well-being report conducted in collaboration with Workplace Intelligence, an independent research firm, surveyed 3,150 C-suite executives, managers, and workers across the U.S, U.K., Canada, and Australia. The survey offers valuable insights into the importance of “human sustainability” and its impact on both employee well-being and overall business success.

Emphasizing Human Sustainability

The term, “human sustainability” was first introduced in Deloitte’s 2023 Global Human Capital report, referring to “the degree to which an organization creates value for people as human beings, leaving them with greater health and well-being, stronger skills and greater employability, good jobs, opportunities for advancement, progress toward equity, increased belonging, and heightened connection to purpose.”

It aligns with the social dimension of ESG and emphasizes that organizations should “focus less on how much people benefit their organization and more on how much their organization benefits people.”

The survey highlights a consensus among most executives (93%) and workers (88%) that a company should create value not just for shareholders but also for human beings and society.

Despite this agreement, there remains a significant gap in putting this philosophy into practice. Survey findings revealed a significant disparity in perceptions of human sustainability progress: only 56% of workers believe their company is advancing human sustainability, compared to 82% of C-suite executives. This disconnect suggests that while executives may believe that their strategies and policies are effective, workers may feel these efforts are not sufficiently impactful.

What Does it Mean to Prioritize Employee Well-Being?

Employee well-being is an integral aspect of human sustainability. The survey identified worker burnout, declining mental health, and workplace violence as systemic challenges affecting employees, and revealed that a disconnect exists between leaders and workers regarding their perception of how well the company supports employees’ well-being.

According to the survey, approximately 90% of executives believe their company positively impacts worker well-being and career advancement, yet only 60% (or fewer) of workers share this view.

This discrepancy suggests that executives may have an overly optimistic view of their employee well-being policies, which may very well exist on paper, but are possibly inadequately implemented.

For well-being programs to be effective, they need to address the real and perceived needs of employee. The C-suite well-being report identifies these needs as fundamental, encompassing structural and systemic issues. Key areas include enhancing physical, mental, and emotional health, providing opportunities for skill development, ensuring job quality and security, promoting equity and inclusion, and fostering a sense of purpose and connection among employees.

This is however not an exhaustive list. Frequent, open and when necessary, confidential communication between workers and executives is needed to understand specific challenges and goals, allowing policies to be tailored in such a way that better support employee development.

As Colleen Reilly, a fellow Forbes Contributor emphasizes in her article discussing how employee well-being positively impacts firm performance, “organizations need to focus on creating a humanistic culture where people feel like they have meaningful work and purpose, opportunities to engage with their manager, productive and well environments, as well as growth opportunities and trust in leadership.”

Also, Sue Cantrell, vice president, products and workforce strategies at Deloitte suggests that “leaders need to expand from extractive, transnational thinking about workers and focus on creating greater value for them and all stakeholders within the broader human ecosystem.” She further proposes that leaders can achieve this by “using metrics focused on human outcomes, making public commitments around these metrics and aligning rewards with these outcomes.”

Why Should Companies Prioritize Employee Well-Being?

Prioritizing employee well-being positively impacts a company’s bottom line as evidenced by several studies. For example, a 2019 study found that higher employee well-being leads to higher productivity and company profitability.

Also, the World Economic Forum, reports that companies that pay attention to employee health and well-being achieve a significant competitive edge. Firms recognized for their health initiatives experienced a 115% growth in earnings per share compared to just 27% among their competitors.

The Deloitte survey also highlights that about 70% of workers believe that a greater commitment to human sustainability would improve their overall work experience, engagement, job satisfaction, productivity, performance, retention, and trust in leadership. A Harvard Business Review study indicated that employees who find meaning and purpose in their work are more engaged and less likely to leave their jobs.

These findings underscore the necessity for companies to recognize that employee well-being is not a luxury but essential for long-term sustainability. Corporate leaders should therefore create thriving workplaces that prioritize well-being, rather than merely assuming that employees’ needs are being met.