Authors: Birger Kydland, Ynna Abigail Olvida, Yuanda Pangi Harahap*
Highlighting the “social” aspect of ESG
As the world becomes more aware of the need for sustainable and responsible business practices, the Environment, Social, and Governance (ESG) framework has gained significant traction in recent years. While the importance of environmental sustainability and good governance is widely acknowledged, the “S” is often overlooked or underestimated. Based on Sustainable Development Goal (SDG) 3, it talks about promoting well-being for all at all ages while SDG 8 aims to promote the protection of labor rights and promote safe and secure working environments for all workers.
So, in this article, we will focus on the social aspect of ESG, specifically on employee well-being in the workplace. We will explore its importance and the strategies that companies can adopt to promote employee well-being. We aim to raise awareness about the importance of social matters at the corporate level and encourage companies to prioritize employee well-being in their sustainability agendas as well.
Importance of well-being in the workplace
Studies reveal that employee well-being has a significant impact on productivity, engagement, and overall success. By promoting employee well-being, businesses can create a positive and supportive work environment that fosters employee satisfaction and ultimately leads to a more engaged and productive workforce. It helps reduce workplace stress and mitigate the negative impacts of mental health issues on employees, resulting in reduced absenteeism and healthcare costs for employers.
Main indicators related to employee well-being
The Chartered Institute of Personnel and Development (CIPD) identifies several main indicators of well-being in the workplace, including physical, psychological, social, and financial well-being. Physical well-being involves creating a safe and healthy work environment, offering healthy food options, promoting physical activity, and providing ergonomic designs. Psychological well-being includes mental and emotional states such as stress, anxiety, and depression. Employers can support psychological well-being by creating a positive work culture that values open communication, offering resources and support for mental health issues, such as counseling services, and promoting a healthy work-life balance. Social well-being is another main indicator of well-being in the workplace, which includes factors such as relationships with colleagues and social support networks. Lastly, financial well-being as financial stress can have a significant negative impact on employees’ well-being, leading to increased anxiety, poor physical health, and reduced productivity. Employers can support employees’ financial well-being by offering competitive salaries, bonuses, and benefits packages, as well as providing financial education and resources for personal finance management.
By addressing physical, psychological, social and financial well-being in the workplace, employers can help improve employee well-being, leading to better job performance and increased productivity.
Increased well-being to improve mental health in the workplace
The World Health Organization (WHO) notes that creating a supportive work environment that prioritizes employee well-being can help reduce work-related stress and improve mental health. By promoting employee well-being and providing resources for mental health support, employers can reduce the negative impacts of mental health issues in the workplace and improve employees’ overall well-being.
The importance of well-being in improving mental health is supported by Champion Health’s research. Their report found that employees who rated their well-being as high reported significantly lower levels of stress and anxiety, indicating a correlation between well-being and mental health. Furthermore, organizations that prioritize employee well-being have a 63% lower rate of workplace stress, indicating the positive impact of well-being initiatives on employees’ mental health. By providing resources such as mental health support programs, flexible work arrangements, and training on stress management, employers can help reduce workplace stress and promote employees’ mental health, leading to a more engaged and productive workforce.
Effective strategies for promoting employee well-being in the workplace
Fortunately, there are several strategies that can be used to prevent, protect, and support well-being in the workplace. Prevention is a crucial strategy for promoting well-being in the workplace. Employers can take steps to prevent workplace hazards and risk factors that may impact employee well-being. This can include providing training on how to recognize and manage stress, reducing workloads and managing deadlines, ensuring adequate rest and recovery time, and creating a safe, open, and supportive work environment. For example, employers can offer flexible work arrangements, such as telecommuting, to help employees manage their work-life balance.
Protection is another key strategy for promoting well-being in the workplace. Employers can take steps to protect employees both physically and mentally. This can include providing personal protective equipment (PPE) and ensuring that work equipment is safe and well-maintained for workplace hazards that cannot be eliminated entirely. Employers can also provide resources for employees to help them manage their mental and emotional well-being, such as employee assistance programs (EAPs) and access to counseling services.
Finally, support is critical for promoting employee well-being and it goes both ways. On one end, employees can take steps to support their own well-being by practicing self-care, such as getting sufficient sleep, eating a healthy diet, and engaging in physical activities. They can take an active role in advocating for workplace policies that promote well-being. This includes advocating for fair wages, flexible work arrangements, and adequate rest periods. They can also work with management to implement policies and programs that prioritize their well-being. Employers can also offer support to their employees by creating a culture of openness and support, providing opportunities for feedback and input, and fostering a sense of community and belongingness in the workplace. By taking a proactive approach to well-being, employers and employees can create a healthier, happier, and more productive workplace.
Employee well-being for organizational success
This article highlights the importance of employee well-being in the workplace as a key social aspect of ESG, which can have a direct impact on the success and sustainability of an organization. The focus on employee well-being is becoming increasingly crucial as it can boost productivity and increase employee satisfaction and retention. The article explores the main indicators of employee well-being, which include physical, psychological, social, and financial well-being, and offers strategies for promoting well-being in the workplace, including prevention, protection, and support. Ultimately, prioritizing employee well-being is not only the right thing to do from an ethical perspective, but it is also an essential aspect of a company’s long-term success.
*Yuanda Pangi Harahap from Indonesia, Birger Kydland from Norway, Ynna Abigail Olvida from the Philippines are studying for the ASEAN Master in Sustainability Management, a dual degree program from Universitas Gadjah Mada, Indonesia and the University of Agder, Norway.