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What Is Employee Well-Being and Why Is It Important?

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Published by Sreya Madanan on 12 February 2024

This article dives deeper into one of the most important pillars of a company: its well-being practices. Read on and learn what it is, why is it so important, and what’s in store for it for the years to come.

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The war for talent rages on, with companies struggling to attract and retain top talent. However, most employers overlook a key strategy that dramatically impacts recruiting and retention: optimizing employee well-being.

While compensation and engagement initiatives do matter to an employee, the talent force of today seeks jobs that nurture their whole selves.

Over two-thirds of workers say well-being offerings strongly influence their employer choices. This trend will only intensify as Millennials and Gen Z — who prioritize purpose and work-life balance — become the dominant generations in the workforce over the next decade.

Thriving employees become an organization’s greatest competitive advantage, driving sustainable success amidst the turbulence of modern business.

In times as turbulent as now, employee well-being is a strategic necessity – not just a “nice to have” feature – for recruiting, engaging and retaining thriving capable team members.

Other countries have adopted the mindset of prioritizing employee well-being, and India is no different. In fact, 8 in 10 companies in India have increased their spending on employee well-being in 2023 as compared to 2019, revealed a study.

In this blog, let’s take a microscopic view of what employee well-being stands for, how employers can be more mindful of practising well-being at the workplace and what the future awaits for employee well-being.

What Is Employee Well-Being?

Born out of a 1979 initiative by Johnson & Johnson’s Live for Life program for worksite employee wellness program, the term ‘employee well-being’ found its place among the big corporates as well.

Employee well-being refers to a professional’s holistic state of mental, emotional, and physical health.

Employee well-being encompasses feeling consistently positive, engaged and supported across all realms of work and life. It stems from a caring culture, growth opportunities and sustainable rhythms.

According to Gallup researchers, employee well-being includes five core components:

Physical well-being Physical employee well-being relates to having enough energy, strength, and stamina to perform productively. Contributing factors to physical well-being are nutrition, movement, sleep and preventative healthcare. Providing wellness benefits, breaks, ergonomics and health resources enables physical vitality.
Social well-being Social well-being at work refers to the quality of connections and relationships among colleagues. It comes from a culture of trust, inclusion and support. Promoting open, honest communication without repercussions makes all employees feel safe speaking up about obstacles faced at the workplace.
Career well-being Career well-being involves feeling challenged, growing skills, and advancing professionally at a comfortable pace. It requires fair compensation, career growth, and clear internal pathways. Surfacing career goals through one-on-one check-ins while celebrating milestones makes you feel better about yourself too.
Financial well-being Financial well-being depends on earning enough income to afford necessities, save adequately for goals like a home or college, and reduce financial stressors. Employers play a key role here through competitive pay and retirement contribution programs while keeping open communication with the employees.
Emotional well-being Emotional well-being means constructively coping with stress, setbacks, conflicts and change while regulating reactions at work through self-care. Some support strategies include employee assistance programs, mental health benefits, resilience training and promoting balanced self-care routines.

The Importance of Employee Well-Being

Investing in holistic employee well-being delivers immense rewards in turn. The more an employer invests in employee well-being, the more benefits they will reap in the days to come. Some of the benefits of employee well-being are as follows:

  • Improved Productivity

    Healthy, happy employees have the focus and drive needed to perform at exceptional levels. Well-being slashes burnout by giving people renewable energy.

    Employees can immerse themselves fully into meaningful work instead of operating in crisis mode or a survival mentality. This fulfilment and flow allow full utilization of strengths, talents, and creativity each day. Alternatively, employers should ensure that staffing levels align with responsibilities and cross-train to alleviate bottlenecks by promoting reasonable workloads that energize rather than overwhelm.

  • Stronger Working Relationships

    Collaborating with colleagues who feel supported and optimistic fosters innovation and camaraderie amongst the employees — even if they’re from different teams.

    For employees, higher quality connections lead to more willingness to proactively help team members, collaborate across silos, and contribute ideas to solve shared obstacles. Employers need to role model work-life balance in their practices and facilitate opportunities for casual interactions and relationship development among teams through activities, meals, team outings, or in-house well-being and bonding activities.

  • Reduced Absenteeism and Healthcare Costs

    Vibrant, thriving teams take less sick time, which in turn, lowers organizational healthcare expenses by at least 11%, as per the recent statistics.

    Employees experience immense relief from financial burdens when companies absorb bigger shares of premium costs and provide better coverage for services supporting holistic wellness needs. To maintain this, employers should offer robust health insurance paired with digital well-being platforms, onsite healthcare services, mental health counselling benefits, and incentives for preventative care checkups or active lifestyles.

  • Increased Engagement

    It’s no secret that well-treated employees are the most engaged ones. Experiencing positive feelings and being connected intrinsically motivates voluntary effort.

    Employees feel compelled to reciprocate above-and-beyond efforts from leadership and colleagues who support their well-being journey through mentorship, growth opportunities, and genuine caring. To make the most out of it, employers must foster a sense of higher purpose beyond profits and praise progress making a difference for community or social issues, satisfying teams’ deeper need for their purpose.

  • Improved Morale

    Consistent well-being support boosts team morale, optimism and organizational honour. Company culture is everyone's responsibility, as it is everyone’s pride too.

    As a result, employees experience less presenteeism and distractions from financial stress, health issues, or emotional volatility, enabling them to fully engage in productive work. Employers should promote open communication channels for employees to voice obstacles or ideas through anonymous surveys, town halls, small group discussions, skip-level meetings, or one-on-one meetings exploring needs.

  • Increased Job Satisfaction

    Meeting basic needs yields immense job satisfaction, fueling retention and loyalty to the company. It also leads to productivity through high efforts over time.

    Employees gain affirmation that their well-being takes priority over company profits when offered family leave, paid time off, budget for professional development, ergonomic equipment, and mental health days. Employers must realize intrinsic motivators like growth opportunities, flexibility, purposeful work and supportive leadership often outweigh compensation.

  • Better Mental Health

    Holistic well-being strategies alleviate stress, depression, anxiety and emotional volatility at work.

    Employees can experience relief from burnout symptoms or mood disorders through counseling support, reasonable workloads, breathwork breaks, resilience training and the promotion of sustainable self-care routines.

    Employers should destigmatize and accommodate mental health needs as they would physical illnesses while proactively building resilience skills through program offerings.

  • Improved Work-Life Balance

    When companies promote sustainable paces and self-care, employees don’t burn out. Well-balanced personal and professional lives translate to more creativity on the job.

    Employees will prioritize replenishing themselves through proper rest, healthy boundaries, and rejuvenating hobbies when companies encourage utilizing paid time off and demonstrate these behaviours themselves. A good employer offers flexibility in calendars when possible, evaluates excessive meeting loads, monitors overtime, models reasonable schedules that support work-life integration and asks about rhythms during check-ins.

The Future of Employee well-being

Looking ahead, AI and people analytics will enable employers to take employee well-being programs to the next level.

Emerging technologies like virtual reality, wearables and sophisticated platforms integrating data on safety, satisfaction, inclusion, physical activity, volunteering and more will revolutionize this space.

Rather than pulse surveys, companies can access integrated, real-time pulse checks on employee well-being. AI chatbots can provide easily accessible mental health support 24/7. These seamless systems will trigger automated alerts and recommendations when teams show signs of burnout, dissatisfaction or low inclusion.

Essentially, technology both informs human leaders and directly addresses well-being needs through intuitive automation and on-demand resources.

The result?

People get hyper-personalized attention while companies gain continuous insights to strengthen culture and belonging. It’s a win all around generating remarkable ROIs across productivity, healthcare costs, innovation, loyalty, and revenue in general.


Neglecting employee well-being in the pursuit of Career Development can lead to burnout, stress, and decreased job satisfaction. So, the time is now for leaders to commit to understanding and nurturing employee well-being across all its facets. When organizations invest in people holistically, they reap game-changing competitive advantages as workers reciprocate with purpose and performance.

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