By: Connie Maniscalco on April 30th, 2021

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Why Employee Well-Being Is So Important for Business Performance

Total Rewards | Business Management & Strategy

The past year has been what many, including myself, are describing as a relentless crisis. Some businesses have passed this test thanks to the hard work and dedication of their employees. But a year of sustained stress could be the catalyst for another crisis: a tidal wave of employee burnout.

Professional burnout has long been an issue, with 77% of workers saying their work has been negatively affected by stress and exhaustion. Workers can burn out for any number of reasons, from stress to physical illness. To help your team succeed, you need to take a holistic view of everything that affects your employees’ well-being.

What is employee well-being?

Well-being is about feeling good in yourself, both physically and mentally. In a professional sense, employee well-being means the working environment is safe, supportive, and conducive to performance.

When you’re thinking about employee well-being, there are four aspects to consider:

  • Physical: Physical wellness is a major aspect of well-being. Companies may provide wellness perks like gyms, healthy snacks, and access to health consultants. OSHA-compliant office equipment helps people avoid workplace injuries – something that’s now a growing concern for people working from home.
  • Mental: 20% of Americans live with a mental health issue, which likely means that one in five of your workers needs extra support. Furthermore, every employee is at risk of stress-related burnout, which can be a career-threatening condition. The recent years have had unpredictable effects on mental health: some people have struggled, while others have found it easier to balance their schedule when working from home.
  • Social: Humans are social creatures, and we tend to feel good when surrounded by friendly faces. Bullying, isolation, and poor communication can all negatively impact an employee’s well-being. Lack of social interaction is one of the most significant drawbacks of remote workers. For hybrid teams, there’s a risk of at-home workers feeling left out. 
  • Purpose: Everyone wants to feel that their work is worth something, whether contributing to organizational goals or helping to change the world. If you’re working on repetitive tasks that don’t seem to benefit anyone, it will slowly grind away at your well-being.

Policies and culture have an enormous impact on employee well-being. Often, during layoffs or challenging times, we see employees splitting the work of their former colleagues and feeling overwhelmed by their long to-do lists. If your manager ignores your physical and mental health, or if your team doesn’t support you, then you’re not going to feel great.

And when we feel bad, that’s when our on-the-job performance begins to suffer.

How does well-being impact performance?

Companies that invest in employee well-being tend to perform better than those that don’t. One study found that when companies have strong well-being policies, their staff are 27% more likely to rank as “excellent” in job performance.

It can be tricky to identify problems related to well-being, as these issues often present themselves in different ways. Some of the problems you’ll see include:

  • Decreased productivity: A dip in productivity is the earliest symptom of a well-being issue. Stressed or burnt-out people struggle to concentrate, which means they have trouble hitting targets. They also become more error-prone, causing them to spend more time on rework.
  • Poor engagement: When people are feeling great, they’ll show high levels of engagement and enthusiasm. Conversely, people who are struggling will stop attending events, volunteering for projects, and participating in meetings.
  • Increased absenteeism: Chronic stress can be just as damaging as a physical ailment, leading to increased illness-related absence. Stressful environments can also lead to presenteeism, where employees log in when they’re too sick to work. Absenteeism and presenteeism can both have a severe impact on productivity.
  • Team cohesion: When people aren’t feeling great, it makes it hard to bond with colleagues. This causes a breakdown in collaboration and communication, which ultimately hurts everyone. Plus, it’s a vicious circle: the lack of team spirit will impact each individual’s well-being.
  • Staff retention: Well-being is a major factor in retention. Recent years have caused many people to realize that health and happiness are more important than salary.

All of these issues have a measurable effect on the bottom line. This means that employee well-being is a concern for every employer.

How to promote employee well-being

Rather than wait for these problems to emerge, it’s best to take an active approach to employee well-being. Here are some tips to get started.

  1. Review your support structures

You have several well-being tools at your disposal, such as wellness programs, healthcare, and Employee Assistance Programs (EAPs). It’s a good idea to review these regularly and see that they’re still fit for purpose. Pay close attention to uptake rates for these programs – they only benefit the company if people actually use them.

  1. Listen to employee feedback

Employees will tell you exactly how they feel when given a chance. Try to have some friendly one-to-ones where people can get things off their chest. You can also conduct regular pulse surveys to get an immediate sense of how people are feeling.

  1. Adapt your strategy for hybrid teams

Four in five executives plan to adopt a hybrid work model, with teams alternating between on-site days and days at home. It’s a great system, but it presents some well-being challenges. Leaders will have to be aware of how employees are feeling about returning to an office during a health emergency and keep an eye out for absenteeism on those in-office days. You’ll also need to think about how to maintain team spirit in this new environment. With a hybrid model, there is an increased risk of fostering an environment of “working in a silo” if for example, in-office days are by department and individual teams are not provided an opportunity to collaborate in person with other departmental or functional teams.  

  1. Look at task rotation and teambuilding

The way we allocate work can have an impact on well-being. Task rotation can help keep things fresh for everyone, and it ensures that nobody is stuck with the same chores each week. It’s also a good idea to organize projects in a way that encourages everyone to work as a team.

  1. Lead by example

Leaders set the standard in their company. Often, this is unconscious. For instance, if you work until 9 p.m. each night, your team might feel pressured to keep equally long hours. Take care of your own well-being by engaging with wellness programs, delegating excessive workloads, and taking time to bond with your team.

Temporary stress can be a good thing, like when a team knuckles down to deliver a big goal. Sustained, long-term stress, however, is counterproductive. If you want a team that consistently meets expectations, you have to do what you can to protect their well-being.


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