The COVID-19 pandemic has helped demonstrate how the best-performing organizations prioritize employee well-being over short-term profitability, especially during a crisis.
According to a recent study conducted by IBM’s Institute for Business Value, 77 per cent of top-performing companies put employee well-being ahead of profitability, compared with only 39 per cent of underperformers. (Top performers were defined as those who reported high revenue growth compared with industry peers over the past four years.)
“Employers are realizing, more and more and in many industries, just how much of a competitive advantage their talent truly is,” says Dave McCann, the managing partner for Global Business Services at IBM Canada.
Mr. McCann explains that employee well-being efforts can take on many forms, ranging from providing mental health resources to incorporating more flexible working policies. He adds that while some strategies can come at a high cost, there are ways for employers to better support their staff without making a significant financial commitment.
“An employee-centric culture is a key element to prioritize,” he says. “How do you communicate with your employees? How do your employees get to provide feedback and input? How do you value their career and their future?”
The study also found that Canadian chief executive officers support the well-being of employees at a slightly lower rate than the global average. Internationally, 47 per cent of respondents indicated they prioritize well-being in times of crisis – even at the cost of profitability or budget constraints – compared with 45 per cent of Canadian business leaders.
Another study conducted by asset management firm Mercer, however, found that Canadian organizations intend to increase their focus and spending on employee well-being programs in the coming year.
According to that study, nearly two-thirds plan to add mental health benefits in the next 12 months, compared with less than half of global respondents. Half also indicated that they intend to train managers to better identify mental health concerns, and 83 per cent indicated that skills development would be a priority in 2021.
“Canadian organizations are investing more in these programs, and that was accelerated by COVID-19,” says Daniel Imbeault, a partner in talent strategy for Mercer Canada. “We’ve seen quite a [number] of programs being deployed, and the way they deliver those services has also changed, because of the remote-work phenomenon.”
Mr. Imbeault adds that employers and investors have been gradually increasing their emphasis on employee well-being in recent years after identifying burnout and stress as significant barriers to overall business success.
“It was already a trend for us to talk to our clients and say you need to really think about how you treat your people and your employee value proposition,” he says. “That was already the case pre-pandemic, but COVID-19 has accelerated everything that was being planned for the next two to four years into the next six months.”
Prior to the pandemic, employee well-being programs were often viewed as a perk reserved for employees of larger and more profitable organizations, rather than a driver of their success.
“I don’t believe it’s because we’re in a pandemic that there’s this relationship [between employee well-being and business performance], it exists regardless, we’re just more aware of it now,” argues Dr. Natalie Baumgartner, the director of the Achievers Workforce Institute, a Toronto-based employee recognition and engagement software provider.
Dr. Baumgartner believes the correlation between employee well-being and overall success is apparent regardless of the company’s size and resources. “I’ve worked with organizations from startups to Fortune 100 companies that are investing in well-being, and I would say the impact is similar across the board in terms of having a positive impact on engagement, lower levels of turnover, and higher levels of employee loyalty,” she says.
Dr. Baumgartner adds that she hopes the pandemic marks a permanent shift in the thinking around employee well-being, rather than a temporary digression.
“One silver lining of the pandemic is that it’s woken up leaders to recognize the importance of attending to well-being on an ongoing basis, and not putting it in the bucket of perks, but seeing it as a key business driver,” she says.
To make that shift permanent, and to make maximize the impact of employee well-being programs, Dr. Baumgartner recommends incorporating regular feedback into programs and policies.
“Asking employees what they want and need is critical, and [so is] not assuming every population is the same. The same is true for maximizing ROI [return on investment],” she says. “In order to maximize ROI we need to be asking ‘is this helping?’ and put the tools in place to continue evaluating whether you’re meeting that need.”
Stay ahead in your career. We have a weekly Careers newsletter to give you guidance and tips on career management, leadership, business education and more. Sign up today.