Companies Focusing on Holistic Organizational Health Outperform Their Peers, According to New Bersin Research

Research shows there is still much work to do; only 15% of companies are achieving maximum business value while 57% are still focused on basics.

– What organizations are doing well: 77% of respondents said their organizations are prioritizing physical and psychological safety of employees; 75% cited a focus on the wellbeing experience; and 70% cited clear communications regarding how employee health data is used.

– What organizations are not doing well: Only 13% of respondents said their companies regularly survey their employees to assess financial health; 18% said their organizations actively balanced employee workloads; 15% cited localized health and wellbeing resources.

The Josh Bersin Company, a research and advisory company focused on HR and workforce trends and issues, today released a global study on the factors involved in creating a holistically “healthy” organization. The research 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. The research shows that a people-centric approach to all work is the foundation of every healthy organization.

Companies that take such a holistic approach see significant business benefits. According to the research, healthy organizations are 2.2 times more likely to exceed financial targets, 2.8 times more likely to adapt well to change, and 3.2 times more likely to retain employees, as well as seeing dramatic drops in absenteeism and health insurance claims.

“Our research clearly shows that merely investing more dollars into wellbeing-related benefits isn’t enough,” said CEO Josh Bersin. “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.”

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

Only 15% of companies are at the highest level of maturity where the biggest gains are seen.  Strikingly, 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,” said Bersin. “Otherwise, your company is losing out on anywhere from 30 to 50% of potential benefits related to financial performance, customer satisfaction, and business agility.”

While every practice and program studied had some positive impact, the report identifies six specific factors that can help companies become truly healthy organizations. For instance, the research found that several key practices are instrumental in helping companies “win the war for talent,” a significant benefit in the current job climate. Companies see much higher rates of employee retention and outpace their competitors in recruiting when implementing practices that foster virtual and face-to-face communities, help employees continually develop and grow, create a helping culture, and ensure equitable and fair pay.

The study also found that leadership behaviors and actions have an outsized impact on every performance outcome measured. For example, companies with leaders who engage in regular dialogues 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. Fewer than 20% of people managers focus on ensuring employee workloads are manageable and fewer than 50% assess and simplify work processes regularly.

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Healthy organizations also implement practices that go beyond company walls. Such practices include organizing community give-back activities, giving employees paid time off to volunteer, and choosing supply chain partners demonstrating 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.

When it comes to employee wellbeing, technology can be a double-edged sword. With the corporate wellbeing technology market set to reach $70 billion in 2021, there’s almost no limit to the variety of tools, offerings, and services employers can present to employees and candidates. Two things matter most when it comes to making wellbeing technology “sticky” enough to have an impact: simplicity and transparency. When companies implementing wellbeing technology strive for simplicity and transparency with both the employer and employee in mind, they score consistently higher in a variety of outcomes and are two times more likely to see a decrease in insurance costs.

Commenting on the findings, Josh Bersin, global HR trends analyst and CEO of The Josh Bersin Company, says:

“Many companies define wellbeing as a constellation of the social, mental, physical, and behavioral health of their employees. This is an important start. But if the work itself, the business practices of the organization, and the company culture are not also scrutinized, companies will miss the mark.

Healthy organizations apply a lens of health and wellbeing to every corner of the company. They can withstand crises of any type and consistently see excellent financial and business results.  Essentially, these companies are “healthy” at their core.”

Janet Mertens, senior director of research, The Josh Bersin Company, says:

“In today’s service-driven economy, every employee matters. 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. The commitment to wellbeing must be embraced by all parts and all levels of the business.”

Study Methodology

At the project’s start, Bersin analysts conducted conversations with HR, talent, and benefits leaders to shape the questions and most relevant topics for analysis. The team then developed a survey instrument, in partnership with Perceptyx, which was open for six weeks in Spring 2021. The survey spanned 25 dimensions and 91 practices and programs that foster organizational health.  The team also conducted case study interviews to ensure the practices identified through statistical research fully align with current HR and C-suite business concerns and practices.

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