Should employers be concerned with the well-being of their employees?
The answer, of course, is yes. A workforce that is “well” leads to increased productivity. But Willis Towers Watson research has uncovered a startling disconnect between employer and employee perceptions of workforce well-being. More than half of US employers (56%) believe their well-being programs have encouraged employees to live healthier lifestyles, but only one-in-three employees (32%) agrees, according to our Global Benefits Attitudes Survey.
Why do well-being programs fail to resonate in the workplace?
Employees are looking for more than financial incentives when it comes to participating in employer-sponsored health screenings or savings vehicles. Instead, they want to feel these types of programs and tools meet their needs as individuals and connect to them in a deeper, more meaningful way.
We believe a holistic approach that encompasses four dimensions of employee well-being – physical, financial, emotional and social – is the key to creating greater employee engagement in well-being initiatives. But how do you connect these dimensions for the employee?
Before we can understand the new era of “Well-being 3.0”, let’s review previous approaches to wellness, and why they may have fallen short.
Well-being 1.0 – BMI screenings, Fitbits, and more
Our research and experience indicate that traditional models for “employee wellness” – from financial incentives for BMI screenings to smoking cessation programs to equipping employees with Fitbits – are no longer effective. These were established largely as cost-savings mechanisms for self-insured employers, i.e., if we can help keep our employees healthy, we can save on health care costs. In practice, we’ve trained our workforces to accept the cash and gadgets without fully embracing their employers’ efforts to keep them healthy.
Well-being 2.0 – Financial wellness
Recognizing that financial concerns can have a negative effect on employees, employers started to focus on financial well-being, as well – helping employees to better manage their finances, make smart financial decisions and save for retirement. Employees appreciated the support, but it was rarely linked to their individual needs in any way that made a difference; for example, older workers who wish to retire but don’t have the financial means to do so, or younger workers who are struggling to pay off student loans.
Our research has shown that employers are underestimating the impact these types of financial stressors can have on their employees when in fact, workers are willing to make trade-offs to feel secure financially and in other ways as well.
Well-being 3.0 – A holistic approach
Both physical and financial elements are, no doubt, important components of the overall well-being of employees. Yet until recently, each existed in its own silo, with solutions tailored to that one particular need. Employers were never really able to make a connection between the two, much less consider the full range of an employee’s well-being needs.
A complete approach to well-being encompasses four dimensions, all of which are interdependent on each other and focus on employees as individuals. From the employee’s point of view, these are:
Physical: I understand and manage my physical health in order to improve my condition and maintain a healthy lifestyle, and ultimately…respond effectively to acute and unexpected illnesses and injuries. I.e., I feel alive, healthy and strong. I am thriving.
Financial: I assess and manage my financial commitments in order to meet my financial goals, make better choices, and ultimately…be better prepared to absorb a financial shock. I.e., I feel comfortable financially. I am secure.
Emotional: I achieve self-awareness and maintain my mental health in order to improve my emotional health, better manage stress, and ultimately…be equipped to handle unexpected life crises. I.e., I feel together and grounded. I am balanced.
Social: I develop and maintain my support network in order to strengthen and cultivate meaningful connections and ultimately…become more adept at resolving issues and conflict. I.e., I feel supported and loved. I am connected.
It’s key to recognize that employees are all in different places along the well-being journey and helping them identify where they are versus where they want to be is essential across all four dimensions.
Getting to ‘ideal’
Achieving success within each dimension leads to an ideal state of mind, or state of being – thriving, secure, balanced, and connected – which we believe is the crux of what it means to have happier, healthier and ultimately more productive and engaged employees.
Employers must develop integrated solutions to tackle all of an employee’s life challenges from this perspective, recognizing that no two employees’ needs are exactly alike within any one dimension. It makes sense that when you address employee pain points by offering them tailored solutions they want and need, they’ll respond with higher levels of engagement than in traditional models. Employees want to be thriving. They want to be financially secure. They want to feel balanced in their emotional life and connected socially. And so, employers need to shift gears if they want to design programs that are going to have a genuine impact on employees.
How employers can shift to Well-being 3.0
As with other areas of total rewards, such as benefits, employers are continuing the shift toward being less paternalistic. We see more customization being offered; for example, a defined contribution approach (as opposed to a defined benefit prescribed by the employer), in which employees can choose from a menu of well-being programs that make sense for them, much as they do with health or retirement plans.
Companies can implement a more personalized, holistic approach to employee well-being by following these six steps:
- Assess where your company is currently in terms of addressing each of the four dimensions of well-being defined above. Consider both the employee perspective as well as your leadership’s point of view.
- Set goals and objectives to help close the gaps identified in your assessment and develop guiding principles for design and prioritization of your strategy.
- Design your well-being program. Consider decision support and educational tools across each of the key dimensions.
- Consider vendor solutions and software tools to implement programs you determine are needed across each dimension (e.g., diet and exercise tracking for Physical; retirement counseling sessions for Financial, Employee Assistance Programs for Emotional; eLearning platforms to promote positive workplace culture and diversity initiatives for Social).
- Implement processes for managing vendors and tracking progress.
- Engage employees through campaigns, training, ongoing communications and the rollout of individualized solutions.
A holistic approach to well-being means moving away from buzzwords and gestures to finding real solutions that can meet employees where they are. It means creating a culture that supports and respects employees as individuals (e.g., inclusion and diversity, community involvement, corporate social responsibility, etc.) And it means solving for the lifespan of your employees, not just the next year. Over time, their needs will change so you need to design programs that will evolve as they do.
Through our extensive interactions with employers, we’ve found that they truly believe that employee well-being is important and will indeed improve financial results as well as talent retention. Our research indicates that companies with high levels of employee well-being achieve better business outcomes, including more highly-engaged employees, fewer highly-stressed employees and fewer days missed by employees per year due to unexpected illness or presenteeism. Additionally, on average, US employers realized approximately $1,000 lower annual health care costs per employee.
With low unemployment and the changing nature of workforces, the fight for talent becomes more pronounced. Well-being matters; how your employees feel influences how and where they work. It also influences productivity and ultimately financial results. Moreover, having employees who are thriving, secure, balanced and connected can not only help to improve the workforce, but also the world as we know it. A lofty goal? Perhaps, but one we believe to be well worth the effort.
Next in this series: Why all the talk about the Future of Work?
John Ball is the Global Co-head of the Retirement Practice at Willis Towers Watson
Mark Maselli is Managing Director of Human Capital and Benefits, North America, at Willis Towers Watson
Laura Sejen is the Managing Director and HCB Integrated Solutions Leader at Willis Towers Watson.