Improving employee wellbeing in the new era of work

Published: 12 July 2024 | by Natasha Wiebusch, Brightmine Marketing Content Manager

Employee wellbeing in the workplace is suffering on a global level. According to the 2023-2024 UN Human Development Report, the number of people feeling stress, anxiety, sadness, anger or worry has reached a 10-year high. And data from Gallup’s latest workplace research found that wellbeing and employee engagement both dropped in 2023.

Though investments have increased, employees are facing new challenges in this new era of work. To make gains on wellbeing today, employers need a fresh perspective and new strategies.

A fresh perspective on employee wellbeing

Traditionally, employee wellbeing consisted of health insurance, employee assistance programs and other “health perks.” Beyond mental and physical health benefits, however, employees were pretty much on their own.

Much has changed. Today, leading wellness experts are taking a fresh, holistic perspective on wellbeing. From this perspective, wellbeing is the overall social, financial, emotional and physical health of an employee. It considers the impact of an employee’s career, community, environment and more on their health.

To help frame holistic wellbeing, many organisations have created frameworks. Gallup, for example, established five elements for modern employee wellbeing:

Each of these elements represents a dimension of the employee’s health, which employers can influence. You might say that this approach to wellbeing sees employees “in 3D.”

The benefits of holistic employee wellbeing

Holistic wellbeing, has many benefits. Unlike traditional wellbeing programming, holistic wellbeing is employee-centric. It works to create comprehensive programs that address individual employee needs. In doing so, it better equips organisations to support every employee, including those with unique life circumstances and career aspirations.

Holistic wellbeing also supports better performance at work. According to Mckinsey Health Institute, employees with higher holistic health, are more innovative and perform better in the workplace.
Finally, a holistic approach can help leaders address the new challenges affecting employee wellbeing…

New era, new challenges

From the pandemic and remote work, to inflation and economic uncertainty, employees have been on quite the roller coaster. Many of these disruptions have led to permanent changes and presented new challenges to employee wellbeing:

Flexibility

One of the more prominent changes to work is the availability and approach to workplace flexibility. Since the pandemic – which created the largest remote workforce we’ve ever seen – workplace flexibility has become the norm. And employers quickly saw the benefits.

Recent research, however, is exposing the potential damage flexibility can do to wellbeing. For example, Gallup’s 2023 global workforce report found that increased flexibility is associated with declining wellbeing.

On the other hand, a review of research studying workplace flexibility and wellbeing revealed mixed outcomes. While some found that flexible work, particularly remote work, had a negative impact on employee wellbeing, such as loneliness and poor physical health, others highlighted its benefits.

Ultimately, research is finding that flexibility may not always have positive wellbeing results. However, increased flexibility remains a top priority for employees and job seekers.

Cost of living

From 2021 to 2022, the US saw the highest inflation rates since the 1980s. This not only caused global concern, but it also contributed to employee financial stress. Employees saw their raises become irrelevant as the cost of living surged month over month.

And though inflation has since declined, reports show that wages still aren’t keeping up with the cost of living. This reality has become a significant challenge for both employees and employers. Employee financial stress and concerns are on the rise. On the employer end, over a third feel salary expectations are straining the bottom line.

Uncertainty

Increasing feelings of uncertainty are causing damage to employee mental health. Whether it’s financial health worries, job security or surprises at work, employees are feeling the pressure. According to Dr. Julia DiGangi, these feelings of uncertainty ultimately lead to employee burnout. Unfortunately, burnout rates are at their highest in years.

One particularly new feeling of uncertainty that is harming employee mental health is related to AI disruption. Beyond worrying about their job security, employees are feeling the stress of adjusting to AI’s presence at work. They need to learn new systems, skills and practices, which is increasing stress and anxiety.

Strategies for improving employee wellbeing

To make a positive impact on overall wellbeing, employers need strategies that address the new challenges of today’s workplace. The following are five strategies to consider:

1. Recognise the pivotal role of management

Employees who work for organisations with poor management practices are almost 60% more likely to be stressed than those who work for organisations with good management practices. This statistic from the Gallup workforce report is not only staggering, but also telling. First, it shows just how much influence managers have over how team members feel.

It also shows that to improve employee wellbeing, employers can’t rely solely on wellbeing benefits and programming. They need to make systematic changes to improve management and workplace culture.

When reviewing your wellbeing strategy, consider your management practices. This may involve reviewing:

• Manager hiring and training practices.
• Psychological safety levels at work.
• Manager accountability systems.
• Employee review practices and safeguards against bias.

2. Implement flexible work mindfully

As noted above, flexibility can provide both benefits and drawbacks to employee wellbeing. On the one hand, workplace flexibility supports work life balance, reduces stress and helps employees feel independent and respected. On the other hand, flexibility can contribute to loneliness, depression, health issues caused by being sedentary, and more. It can also lead to overworking, and ultimately, burnout.

Avoiding mixed results will require careful planning that addresses the common pitfalls of flexibility. For example, if you have a large remote or hybrid workforce, ensure your managers are implementing remote work-friendly practices. This may include:

• Making remote-friendly social events the norm as opposed to the exception.
• Scheduling remote meetings to discuss important work.
• Investing in remote collaboration and communication tools.
• Establishing safeguards to prevent proximity bias.

To help reduce overworking and burnout:

• Create guardrails such as working hours or quiet hours.
• Encourage paid time off frequently.
• Raise awareness of the importance of sleep and recovery.

To help promote healthy working behaviours in a flexible environment, ensure leaders model healthy behaviour.

3. Address AI head-on

Many organisations are struggling to communicate their use of AI in the workplace. According to UKG, more than half of employees have no idea how their organisations are using AI. This uncertainty, combined with the very real worries of job elimination, are causing damage to employee wellbeing.

You can help reduce employee stress and anxiety around AI by:

• Communicating transparently about AI and providing updates.
• Providing upskilling opportunities, either internally or through vendors.
• Taking other steps to drive AI readiness.

4. Approach financial wellbeing sustainably

Soaring inflation, student loans and high interest rates…the list of financial stressors for employees goes on. To help manage increase costs of living, employees have new salary expectations. Unfortunately, employers can’t always deliver.

If you can’t lead the market in pay, you can still answer the call with sustainable financial wellbeing strategies. This includes:

5. Support employee mental health

Workplace mental health programs have become a top priority, as studies have shown consistent decreases in employee mental health. Poor mental health not only contributes to lower job satisfaction and engagement, but also burnout and low productivity.

To support employee mental health, go beyond employee assistance programs. Consider the following:

• Robust mental health benefits with large provider networks.
• Mental health communications to remove the stigma surrounding mental health.
• Mindfulness and other mental health-related applications.
• Manager training on employee mental health.
• Mental health days allowing employees to take additional time off.

6. Prioritise purpose and meaning

Ensuring your employees have purpose is extremely important to your wellbeing strategy. When people feel their work has purpose and meaning, they’re much more likely to feel psychologically healthy and connected at work.

Beyond work, research shows that having a sense of meaning in life can provide the following benefits:

• Better financial wellbeing
• Decreased chances of a stroke
• Healthier psychological functioning
• Improved heart health
• Increased physical activity
• Reduced risk of death
• Resilience

To improve wellbeing, ensure employees understand their purpose and how it aligns with the company’s greater purpose. Also, help leaders in the organisation practice purpose-driven leadership. This will encourage not only communications about purpose, but also purpose-driven decision making.

Wellbeing is a journey

Holistic wellbeing is well worth the investment. However, leaders will need to prepare for the long game, as employee wellbeing is a continuous journey. And in this new era of work, moving the wellbeing needle will require continuous efforts to address the challenges employees are facing.

To start your employee wellbeing journey, explore our resources in the HR & Compliance Centre.