The secret ingredient to strong business performance isn’t what you might think
Wednesday, February 28, 2024 - Dignify
“Our people are our most important asset” – it’s one of the most common phrases you will hear in business, and for good reason. A company’s ability to achieve bottom-line financial success ultimately relies on the competence, ingenuity, and reliability of the people that they bring on board.
However, there’s another dimension to why people drive businesses to success – their wellbeing. Let’s introduce this concept by starting with the definition. “Wellbeing” can be fairly vague, so what does it actually mean? The definition of wellbeing, according to the Merriam Webster dictionary, is “the state of being happy, healthy, or prosperous.”
When an organization’s employees are happy, healthy, and prosperous, that likely means that this organization is sufficiently supporting their employees’ wellbeing. And when an organization is actively supporting their employees’ wellbeing, their performance is likely to be drastically better than those that don’t.
An excellent article posted to Fast Company written by Sebastian Buck shows this to be true. Oxford’s Wellbeing Research Center conducted research to assess whether or not there was a strong link between employee wellbeing and financial performance, and the numbers speak for themselves. Buck writes that companies with high wellbeing have better profits, better valuations, get higher return on assets, and are more likely to perform better in the future. Beyond that, high wellbeing companies were proven in real time to better investment options in the stock market through both good and bad market conditions, showing a 20% higher ROI than S&P 500 and a 30% higher ROI than Nasdaq.
So why is it that high wellbeing companies are just so much better? Buck provides insight here as well. He says that employees with higher wellbeing are…
- More productive
- More creative
- More healthy
- More likely to have gainful and fulfilling working relationships
Beyond that, companies that have high wellbeing receive more attention and applications from job seekers and are substantially more likely to retain their employees. All of these improvements in wellbeing are significant cost-savers for employers. Let’s just use retention to illustrate how impactful the absence of wellbeing is. A study by Gallup reveals that that companies lose an astounding $322 billion dollars in productivity globally due to burnout-related voluntary turnover, representing 15 to 20% of total payroll on average.
So, the “bottom line” is that investing in wellbeing is critical to the success of your employees, and therefore critical to the success of your company as a whole. When your people are strong, so is your performance. By investing in wellbeing, you cut enormous potential costs and enable your people to operate at their highest potential. Building a comprehensive strategy for supporting employee wellbeing should absolutely be among your top priorities for the year.
So what does it take to support wellbeing in your company? Sebastian Buck provides an interesting insight, citing an Indeed study that shows the social dynamics at work are very important in cultivating employee wellbeing, even more so than pay. Whether or not people feel included and like they belong is a major determinant of employee wellbeing.
As such, a good place to start in supporting employee wellbeing is to build a culture of dignity, where people feel appreciated not just for what they do, but for who they are. Give employees opportunities to socialize, build connections, and have meaningful conversations with one another. As a leader, take the time to truly understand what motivates your employees and how you can interact with them in a way that supports their personality traits. In a working world with a wellbeing deficit, dignity is the tool that can close the gap and help people feel fulfilled again.
“Employee Wellbeing Is Key for Workplace Productivity” [Webpage]. Gallup. https://www.gallup.com/workplace/215924/well-being.aspx [Accessed January 17, 2024]
Buck, Sebastian. “The business case for investing in employee well-being” [Article]. Fast Company. https://www.fastcompany.com/90899166/the-business-case-for-investing-in-employee-well-being [Accessed January 17, 2024]