In today's fast-paced work environment, more and more organisations are increasingly recognising the significance of employee wellbeing in driving overall success. There is, however, still hesitation amongst some organisations as to the benefits of supporting employees' wellbeing, especially financial wellbeing.
The 2023 research paper by Oxford University, Harvard and The Wellbeing Research Centre titled "Workplace Well-being and Firm Performance" provides valuable insights into the profound impact of wellbeing on organisational outcomes. In this article, we delve into the key findings of their research, offering insights to empower organisations in promoting wellbeing - including financial wellbeing - within their workforce.
The Link Between Workplace Wellbeing and Organisational Performance
The research paper highlights a robust correlation between employee wellbeing and firm performance. We already know that when employees experience higher levels of wellbeing, organisations witness increased productivity, improved work quality and enhanced employee engagement. As much past research has found, these factors contribute to overall organisational success and competitiveness in the marketplace.
"They show that you will generate a better return on your money if you invest in companies with a higher level of wellbeing."
Financial Outcomes and Employee Wellbeing
This paper goes one step further in identifying evidence at a vast scale that employee wellbeing directly influences financial outcomes. Employees who are satisfied, motivated and emotionally invested in their work tend to be more productive and contribute positively to the bottom line.
The paper shows that the stock value of an organisation is higher for those with higher levels of wellbeing. This is based on comparing the value of $1,000 invested in the top 100 companies rated by wellbeing scores to the value of $1,000 invested in the S&P 500, Nasdaq-100, and Dow Jones over several years.
The above provides evidence that you will generate a better return on your money if you invest in companies with a higher level of wellbeing, providing a direct financial motivation for investing in wellbeing initiatives.
Why This Connection Exists
For those not familiar with this area of research or how and why personal wellbeing impacts organisations' performance, below we provide a brief summary of some of the main connections.
1 - Boost in Productivity
Studies find a strong correlation between wellbeing and output. An example includes research into call centres, where data shows employees who reported higher levels of happiness converted more sales, adhered to daily schedules and made more calls per hour.
2 - Better Social Relationships
Happier employees have been shown to develop more supportive relationships with colleagues and supervisors, be more collaborative, and have more loyal and satisfied customers.
3 - Improved Creativity
Experiments find that inducing a positive mood enhances creativity. Research finds that participants who are made to feel happier are subsequently more creative on various problem-solving tasks.
4 - Multi-Directional Health Improvements
Remember that happier people are healthier and healthier people are happier. Improving health contributes positively to reducing absenteeism (missed work days) and presenteeism (working whilst sick). One study found that a low evaluation of wellbeing accounted for 11% of absenteeism, causing a loss of $92 million.
5 - Recruitment and Retention
It is increasingly becoming a challenge for organisations to attract and retain talent. As the world of work changes and the needs of the workforce becomes more dynamic, the focus areas for new hires change - it is about more than just income. A recent study found that potential employees were more likely to apply to companies with higher wellbeing levels. When employees are happy in their jobs they are more likely to stay, and keep turnover levels low. This has a direct impact on costs and productivity.
The above highlights the connection between wellbeing and performance, showing the positive impact of mediating factors that contribute to boosted organisational performance.
Financial Wellbeing and Financial Performance
Financial wellbeing fits under the umbrella of wellbeing, and is therefore included in the topics discussed above. Financial stress and worry can be categorised into the same bracket as physical health issues and workplace mistreatment affecting happiness levels.
Multiple pieces of research highlight the impact of poor financial wellbeing, including the significant impact on workplace performance. A recent study in the European Scientific Journal states "We have concluded that financial stress causes [employees] to be depressed at work, unable to concentrate on their work, and decreases their performance."
This research reinforces the critical role of workplace wellbeing in building a thriving organisation. By investing in employee wellbeing, organisations can enhance overall performance, financial outcomes and employee satisfaction.
Financial wellbeing is often an area of wellbeing that is forgotten, but it contributes to an employee's overall wellbeing and therefore organisational performance. Organisations that genuinely care about their employees' wellbeing are more likely to attract and retain top talent, boost customer satisfaction and drive long-term success.
Let us embrace the insights provided by this research and embark on a journey to unleash the power of workplace wellbeing, creating a culture where employees thrive, and organisations flourish.
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