What is employee wellbeing & why is it important?

Employee wellbeing has gone from being a nice-to-have to mission-critical. Why does it matter so much? And how can you put wellbeing at the heart of work culture?

What is employee wellbeing? - Workplace from Meta

Looking after the health and wellbeing of your employees is one of the most important things you can do to look after the health of your business. But there’s more to wellbeing than free breakfasts, mindfulness apps and discounted gym memberships: a modern, healthy organization has wellbeing at the heart of its entire culture.

The pandemic may have made organizations wake up to the importance of wellbeing, but many still don’t know how to nurture it in their workplaces. In the UK, an increasing number of organizations say they’re being proactive about wellbeing, but only around half have a formal employee wellbeing strategy in place.

Meanwhile, wellbeing is suffering. Eighty-five percent of respondents in a global study by Harvard Business Review say their wellbeing has declined since the start of the pandemic.

So, what can you do to improve employee wellbeing in your organization? We talked to Sharon Aneja, founder of the Humanity Works Consultancy, a positive psychology and wellbeing consultancy, to find out.

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What is employee wellbeing?

What is employee wellbeing?

Wellbeing isn’t just physical health, although that’s hugely important. Employee wellbeing is about how day-to-day responsibilities, expectations, relationships, stress levels and working environments affect employees’ overall health and happiness.

“Ultimately, it’s about how people feel at work,” says Sharon. “How do they feel about themselves and how do they feel about the organization? This can encompass many different things: you’ve got to look at physical, mental, emotional, social and psychological wellbeing. People ignore spiritual wellbeing, but that’s very important too.”

You can view wellbeing in terms of a hierarchy of needs, she suggests. Starting from the bottom, it looks like this:

  • Basic level: Psychological wellbeing – getting paid and having a clean environment to work in

  • Level 4: Physical safety and psychological safety – feeling safe to be ourselves

  • Level 3: Social wellbeing – a sense of belonging to an organization

  • Level 2: Esteem – a sense of being appreciated

  • Level 1: Self-actualization – being able to relate to the purpose of work and the organization

A bit overwhelming? Maybe. But there are no shortcuts to wellbeing. “If we’re going to meet human needs in the workplace, our approach to workplace wellbeing needs to be holistic,” Sharon says.

“The most successful wellbeing programs are the ones where wellbeing is put at the heart of the organization. It can’t just be HR’s responsibility. It’s everyone’s responsibility because workplace wellbeing isn’t just good for the employee and the organization. It’s good for communities. It’s good for society. It’s good for the economy. It has so many benefits beyond just that interaction between the employee and the employer.”

Where are we now with workplace wellbeing?

Where are we now with workplace wellbeing?

The pandemic has had a seismic impact on the way we work. But amid the continuing backdrop of uncertainty, employers face ongoing challenges in prioritizing employee wellbeing. Here are five of the most pressing issues you should be thinking about.

Burnout, anxiety and depression

During the pandemic, increased workloads and staff shortages have seen people put in longer hours and take fewer breaks. The Harvard survey cites increased work demands as the most significant factor contributing to the decline in workplace wellbeing since the pandemic began.

A lack of downtime can cause higher stress levels, which risks burnout and higher staff turnover if left unresolved. The challenge for leaders is to tackle the conditions that lead to burnout before it’s too late.

Challenges of working from home

Home and hybrid working offer a lot of positives – flexibility, reduced commute, and more time for family, friends and hobbies. For organizations, it’s opened the door to diverse talent and cut office costs. But the downside is boundary blur: it’s much harder to switch off when the office is the kitchen table. It’s also more challenging to connect with colleagues and get on-the-spot support.

Isolation and loneliness

Lockdowns and remote working have increased feelings of isolation, particularly for people who live alone. And these feelings can intensify during times of uncertainty. We’re social animals, and being separated from other people and the workplace environment can lead to disengagement and low morale, affecting emotional well-being.

Financial instability

The economic uncertainty of the past 18 months has caused a dramatic shift in many people’s finances. While some have managed to save money, others have faced furlough, redundancy and worries about job security.

Financial wellbeing gets the least attention from organizations, according to a survey by the Chartered Institute of Personnel and Development.1 Yet money worries can be a significant source of stress for employees, ultimately harming their performance at work.

Leadership challenges

From managing remote teams to introducing extra safety measures in the workplace, the pandemic has placed enormous demands on leaders. As a leader, your job is to project calm and ‘business as usual’ to your teams, even though you may be feeling just as overwhelmed and unsure as everyone else. An honest, open and visible leadership style plays a crucial role in staff wellbeing, especially during times of upheaval when your people are looking to you for extra guidance and support.

Leadership styles plays a crucial role in employee wellbeing
The benefits of wellbeing in the workplace

The benefits of wellbeing in the workplace

When you improve the health and wellbeing of your people, you’re helping to create a more motivated, engaged and high-performing workforce – which can only be good for business. The benefits of investing in employee wellbeing include:

  • Attracting and retaining top talent

    The pandemic has shifted people’s priorities, redefining measures of success. “People are putting wellbeing, sustainability and purpose above money, status and power,” says Sharon. “Everyone’s talking about the Great Resignation and people wanting to quit their jobs. Employees are quite clearly now in the driving seat and they’re going to pick employers who care about and value their people.”

    Employees who feel cared for and supported by their organization tend to be more loyal and want to stay longer. And as the average UK employer spends about £3,000 and 27.5 days on hiring a new worker, retaining top talent can clearly save companies a lot of money and time.2

  • Improved diversity and inclusivity

    A focus on greater inclusivity can help you attract a diverse workforce of talented people from all backgrounds and with different mindsets. Along with preventing health problems from developing, a supportive and inclusive workplace can give staff members who already have health issues the help and resources they need to stay in work – and thrive.

  • Increased productivity

    Healthy, happy and motivated employees come to work feeling energized, engaged and fully focused on the job. That’s in sharp contrast to unhappy, overworked and overtired employees, who lack energy, have poor concentration and are more likely to clash with colleagues – all of which lowers performance. To paraphrase - support your employees to help them work smarter and achieve more.

    “Don't leave the wellbeing strategy to HR. Do it with the people. They are your resource, but they're also your insights, and they're the solution. ”

  • Better team bonding

    An environment that encourages collaboration, teambuilding and friendship at work is vital for employees to feel like they belong. Those who work in a team with friends also tend to put in more effort as they feel accountable to their colleagues. Healthy relationships can have a hugely positive impact on people’s mental wellbeing and happiness at work.

  • Higher morale and job satisfaction

    Employees whose wellbeing needs are met feel more valued and appreciated and generally have higher self-esteem than those who are unsupported. Feeling that their work is meaningful is crucial to employee wellbeing, and helps make people more committed to achieving your company goals.

  • Improved customer relationships

    When wellbeing is good, problems get solved quickly, new sales ideas flow and there’s an eagerness to drive up customer service standards. If staff who deal with customers and clients feel anxious or depressed and don’t buy into what they’re doing, the quality of your product or service will suffer. And that can mean problems escalate because of poor communication.

How to promote employee wellbeing?

How to promote employee wellbeing?

So how do you build an employee wellbeing strategy that puts people first? Get started with these four expert tips.

  1. Get buy-in from the board

    Leaders and managers often face challenges in securing budget for wellbeing, according to Sharon. So the first step is to create a business case for the board that focuses on the many benefits of wellbeing, including ROI. For example, Deloitte estimates an average return of £5 for every £1 spent on mental health.3

  2. Nail the basics

    “What the workforce wants and what employers want to give are not necessarily aligned,” Sharon observes. Employers may see wellbeing as reactive strategies – dealing with problems like anxiety and burnout when they arise.

    But employees want prevention strategies. This means looking at the basics, like workload and working conditions, before moving on to things further up the hierarchy of needs.

  3. Put emphasis on purpose

    Attitudes to work have shifted during the pandemic. "People want to feel like they're contributing to something bigger," says Sharon. That's why organizations need to make what they do (and why they do it) relevant to every employee and their work.

    A set of values that sits on an intranet won't cut it – leaders need to integrate values into the day-to-day. How? By talking to people on a one-to-one, team or company level about how their work is essential and part of the bigger picture.

  4. Use agile measurement

    A company-wide wellbeing survey might be a good way of getting an initial idea of how people are feeling and what they want from workplace wellbeing. But you also need to measure wellbeing on an ongoing basis. That way, you can keep track of how things are changing and how any wellbeing initiatives are performing.

    More importantly, you can make changes if you need to. "The key is to understand what wellbeing means to your people," says Sharon. "Don't leave the wellbeing strategy to HR. Do it with the people. They are your resource, but they're also your insights, and they're the solution."


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1"Health and wellbeing at work", CIPD, 2021.
2 "How To Calculate Your Cost-Per-Hire", Glassdoor, 2020.
3 "Mental health and employers: refreshing the case for investment", Deloitte, 2017.
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