A strategy and a responsibilityMarch 28, 2018
Many employers are putting in place innovative programs for financial wellness, mental health, healthy diet and exercise, mindfulness, sleep, stress management, and more. The aim? To both increase worker productivity and meet new social expectations.
A holistic approach to well-being
As the line between work and life blurs, providing a robust suite of well-being programs focused on physical, mental, financial, and spiritual health is becoming a corporate responsibility and a strategy to drive employee productivity, engagement, and retention. While organizations are investing heavily in this area, our research reveals there is often a significant gap between what companies are offering and what employees value and expect.
Many major organizations are rethinking their reward and development programs to include some version of holistic, end-to-end well-being programs, which are now both a responsibility of good corporate citizenship and a key element of an enterprise talent strategy. This investment responds to the needs of workers, companies, and corporate leaders, and is being addressed by a growing number of well-being resources and tools.
We first wrote about the “overwhelmed employee” in 2014. While the issue of highly stressed workers is not new, the relentless pace of business today has made the problem worse.1 Driven by the always-on nature of digital business and 24/7 working styles, studies now show that more than 40 percent of all workers face high stress in their jobs, negatively affecting their productivity, health, and family stability.2 Hourly workers might complain of inflexible schedules, while white-collar workers often complain of an endless stream of emails and messages that make it impossible to disconnect from their jobs. In some countries, individuals are working more hours and taking fewer vacations than ever.3 And, according to Deloitte’s millennial survey, a majority of surveyed millennials in 19 out of 30 countries report that they do not expect to be “happier” than their parents.4
In response, the digital well-being market is exploding. More than $2 billion in venture capital has been invested in this area over the last two years, creating a flood of online videos, apps, and tools to help assess, monitor, and improve all aspects of health.5
Well-being emerges as a strategic priority
The corporate wellness marketplace began decades ago with a highly specific focus on employee physical health and safety. Today, however, the definition of wellness has expanded dramatically to include a range of programs aimed at not only protecting employee health, but actively boosting performance as well as social and emotional well-being. These now include innovative programs and tools for financial wellness, mental health, healthy diet and exercise, mindfulness, sleep, and stress management, as well as changes to culture and leadership behaviors to support these efforts.
Propelled by these innovations, the corporate wellness market—including health care programs, screening, assessment, education, and apps—has reached nearly $8 billion in the United States alone, where it is expected to hit $11.3 billion by 2021.6 And as the market has grown, so has leadership’s understanding of the critical role these programs play in defining an organization. For example, two-thirds of organizations now state that well-being programs are a critical part of their employment brand and culture.7
Yet despite increased corporate attention and investment in well-being, our research indicates that companies must do a better job connecting well-being programs with employee expectations. As the chart below illustrates, substantial gaps remain in many areas between what employees value and what companies offer to their employees.
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It is our view that expanding well-being programs to encompass what employees want and value is now essential for organizations to treat their people responsibly—as well as to boost their social capital and project an attractive employment brand.
Research has found that student loan support is one of the most highly regarded well-being benefits, as are volunteerism and opportunities for local citizenship.8 Salesforce, for example, prides itself on giving employees seven days of “volunteer time off” each year to help them feel purpose at work.9
Well-being plays a crucial role in multinational food company Danone’s overall business strategy, which is based on the two pillars of economic and social growth. The company’s Dan’Cares program provides medical coverage for most significant health-related risks, and the company has implemented a global parental leave policy. The aim is not only to support worker well-being, but to position Danone employees as health ambassadors.10
Lendlease, a multinational construction, property, and infrastructure company, focuses not only on using the physical workplace to support well-being, but also on developing policies and leadership approaches that embed well-being into its culture. The company’s work environment features “neighborhood” tables, working walls, focus points for activities that require concentration, and enclosed pods and breakaway areas that foster collaboration and social interaction.11 Lendlease’s Wellness Hub, a preventative care facility that occupies two floors of its corporate headquarters, offers employees the use of dedicated rooms—the “Consultation Room,” the “Contemplation Room,” the “Carer’s Room,” and the “First Aid Room”—as well as adjoining areas for physical activity and training.12 A highlight of the Wellness Hub is a six-meter-high breathing wall, which contains about 5,000 plants that accelerate the removal of air pollutants and cools the surrounding space—while also improving energy efficiency and reducing air conditioning costs. The company’s leave policy includes two days during which employees can volunteer their time to a charity of personal interest. Across its international regions, Lendlease continuously rolls out well-being initiatives, including three annual well-being days and extensive health initiatives around diet and exercise that incorporate inclusive and supportive health assessment approaches.13
Well-being benefits are particularly important to younger employees. Millennials, who now make up more than half of the workforce in many countries, spend almost twice as much on “self-care” as baby boomers do.14 This has fed the growth of consumer apps for mindfulness, cognitive-behavioral therapy, and online personal and professional coaching,15 all of which are also available as employer programs.
Advancing from health to well-being to performance
As the definition of well-being expands, organizations now see well-being not just as an employee benefit or responsibility, but as a business performance strategy. In this year’s Global Human Capital Trends survey, only 23 percent of respondents told us that their well-being program was designed to reduce insurance costs. In contrast, 43 percent believed that well-being reinforces their organization’s mission and vision, 60 percent reported that it improves employee retention, and 61 percent said that it improves employee productivity and bottom-line business results.
There is growing evidence to support the idea that well-being drives performance. Research shows that the costs of lost productivity are 2.3 times higher than medical and pharmacy costs.16 Complicating the range of potential employer responses, these costs often occur when an employee is actually at work. A study at Dow Chemical Company found that “presenteeism” costs reached an average of $6,721 per employee per year.17 No wonder, then, that the focus on well-being now extends to helping employees perform well at work, not just avoid absences.
New solutions, indexes, and tools
Driven by intense demand and an influx of venture capital, many new well-being solutions have entered the market. Vendors such as Castlight Health, Limeade, VirginPulse, and others now offer corporate platforms that allow employers to deliver a wide range of employee well-being solutions through an integrated app.18
VirginPulse, for example, offers an employee app that is used as frequently as Facebook and whose active users are 65 percent more engaged, have 32 percent lower turnover rates, and deliver 9 percent higher productivity than their peers.19 Deloitte has developed its own “Vitality” app to help their professionals better manage their energy, and now offers a “Well-being Index.” Other vendors are developing similar indexes to help organizations benchmark their well-being programs.
CEOs and CHROs are getting the message. Just as productivity, citizenship, and inclusion have risen in importance, so has the importance of well-being moved up on the agenda. Aetna CEO Mark Bertolini summarizes the importance and impact of well-being programs: “If people can’t make ends meet at home with food, benefits, health, and health care in particular, how can they be present, engaged knowledge workers when they come to work?”20
The bottom line
Well-being is becoming a core responsibility of good corporate citizenship and a critical performance strategy to drive employee engagement, organizational energy, and productivity. It is also a growing expectation among the talent companies most want to recruit, access, and retain. No longer an optional or narrowly focused element of the rewards menu, well-being is now front and center as a business imperative for leading, high-performance companies.
Originally published at Deloitte Insights