Why a ‘healthy’ organization delivers a clear competitive edge

There’s been much said in recent months about holistic employee health, encompassing the mental, emotional, financial, psychological and other components of individual employee wellness. But how important is it to also have a holistically “healthy” organization? Very important, according to a new report that found that such companies are apt to see significant business benefits.

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According to the research from the Josh Bersin Co., a research and advisory company focused on HR and workforce trends and issues, healthy organizations are more than twice as likely to exceed financial targets, 2.8 times more likely to adapt well to change and more than three times as likely to retain employees, as well as see dramatic drops in absenteeism and health insurance claims.

“Our research clearly shows that merely investing more dollars into wellbeing-related benefits isn’t enough,” says Josh Bersin, global HR trends analyst and CEO. “In order to attract and retain talent and sustain financial success, the time is now for companies to embrace a corporate-wide focus on organizational health at all levels.”

In attaining a “healthy” enterprise, Bersin emphasizes the importance of transitioning from the traditional focus on employee benefits to one that encompasses job and work design, management, rewards practices, a demonstrated commitment to psychological safety and fairness, and a culture of employee listening.

See also: What World Mental Health Day means to these top HR leaders

“The research shows that a people-centric approach to all work is the foundation of every healthy organization,” he adds.

Based on survey responses and interviews, the global survey examined 91 practices and programs across several different categories: physical health, mental wellbeing, financial fitness, social and community connections, safe workplaces and healthy business practices. The final report included a four-level maturity model based on the types of practices currently implemented in companies and the associated business, employee and cultural impacts.

Significantly, just 15% of companies are at the highest level of maturity, where the biggest gains are seen. On the flip side, 57% are at the lowest two levels; these companies focus primarily on basic employee safety and more traditional wellbeing benefits.

“I urge all HR and business leaders to incorporate the practices highlighted in this report to advance a corporate-wide wellbeing strategy,” Bersin says. “Otherwise, your company is losing out on anywhere from 30%-50% of potential benefits related to financial performance, customer satisfaction and business agility.”

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For those looking to enhance their organizational health, the study found that leadership behaviors and actions have an outsized impact on every performance outcome measured. For example, companies with leaders who engage in regular dialogue on health and wellbeing are four times more likely to outperform their peers.  However, the study shows only about a third of companies actively encourage leaders to engage in such conversations. What’s more, fewer than 20% of people managers focus on ensuring employee workloads are manageable and less than 50% assess and simplify work processes regularly.

Healthy organizations also implement practices that go beyond company walls.  Such practices include organizing community give-back activities (and giving employees paid time off to volunteer) and choosing supply chain partners that demonstrate a commitment to environmental sustainability. Measurable benefits include higher levels of customer satisfaction and loyalty, better ESG ratings and an employer brand reputation of being a great place to work.

In looking to enhance the health of the workforce, many companies turn to technology, but Bersin says tech can be a double-edged sword, as the abundance of tools on the market can be overly burdensome for both employers and employees.

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He adds that two things matter most when it comes to making wellbeing technology “sticky” enough to have an impact: simplicity and transparency, both of which allow employers to score consistently higher in a variety of outcomes, including making them twice as likely to see a decrease in insurance costs.

“In today’s service-driven economy, every employee matters,” says Janet Mertens, senior director of research at the Josh Bersin Co. Mertens explains that holistically healthy organizations find ways to make everyone feel supported and cared for.

“A healthy organization not only has healthy employees; it has healthy business practices, job design and reward systems,” she says. “The commitment to wellbeing must be embraced by all parts and all levels of the business.”

“At the end of the day,” adds Bersin, “employees are the lifeblood of the company, driving both revenue and innovation. Today brings many more risks to consider, pushing the topic of health way up to the CEO.”

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