The profitability of a business is dependent on its ability to generate revenue and manage expenditures. The profitability of the business also depends on how engaged, productive, and happy the workers are in their jobs. This is where wellbeing comes into play. Wellbeing can be defined as “a state of physical, emotional, mental, social and spiritual well-being.” There are many benefits associated with having an engaged workforce that has high levels of wellbeing. These benefits highly include productivity for the company.
Many top executives are tempted to focus on the balance sheet rather than what turns out to be a quantifiable and manageable element that is proven to influence the bottom line: employee health.
Although many people feel that wellness is a “softer” issue than an illness to be addressed, this is incorrect. For the past four decades, large-scale studies have confirmed the health advantages of workplace well-being programs, such as engagement, retention, and productivity. Studies show that a comprehensive wellbeing plan and culture has high impact on the productivity and profitability of the business.
Why aren’t we talking more about the link between productivity and well-being in organizations?
I think it’s mainly because a lot of organizations don’t discuss the real costs of absence. In my experience, as long as you don’t bring up the costs of absence and how it impacts the organization’s productivity, you will never get a chance to start prioritizing productivity and your employees’ wellbeing.
Personnel costs are a significant expense for most businesses in the western world. Personnel expenses are for example critical for companies in logistics that are highly exposed to competition and have low margins. At the same time, decreased profit margin puts personnel expenditures at risk due on sick leave and compensatory payments.
One of the most typical problems I see many times (or sometimes) is that human resources is too far away from the company’s core business, devoting time and effort to activities that have nothing to do with its productivity or profitability.
Without the connection between HR efforts and the company’s core business, there are risks of unplanned and underperforming management. This may include a lack of feedback, failure to recognize employees’ accomplishments, and failing to deal with underperformers early on in their careers. It also includes high staffing turnover as a result of poor recruiting methods or having workers who spend more time searching for new employment than they do working on their current occupation.
In order to take charge of the situation and have a better view of it, as well as assistance for managers to support their staff and work effectively for greater productivity, traditional HR processes must be industrialized.
It is only when we have industrialized and scaled up the HR processes that we can also see the effects of increased productivity and well-being among employees.
This is the first step toward profitability, since managers will be able to examine which of their decisions have an impact on profit, employee engagement, productivity, or employee retention rates. Those factors are important for business success, and they must all be considered in order for your company to succeed.