In recent years, the focus on employee wellbeing has undergone a significant change and has become an everyday part of working life. Salary is no longer always the be-all and end-all – bonuses, the environment and benefits have also become increasingly important.
To keep employees happy and businesses thriving at the same time, employers are beginning to invest more in the wellbeing and health of both the business as a whole and each individual. We take a closer look at how employers are keeping pace with wellbeing trends, and how much this investment is returning to the business.
One euro becomes several
Investing in workers’ well-being generates direct returns for companies in both the long and short term. According to a study by the World Economic Forum, every euro invested in employee well-being programmes can generate a return on investment (ROI) of €2.30 through reduced absenteeism, improved efficiency and lower stress. According to various other studies (Harvard Business Review) the return on investing in health is always profitable and can be up to six times higher depending on the area of work and ROI studied.
The ROI is mainly due to the positive impact of various health-related wellbeing initiatives on the physical and mental wellbeing of employees and overall job satisfaction.
The rise and importance of health investment
Recognising employee wellbeing as an important factor in the success of an organisation emerged at the end of the 20th century and has played an increasing role ever since.
The 21st century has also seen a paradigm shift in which companies have started to treat employees as an important part of the company’s assets, not just a labour resource. Growing awareness of the link between employee wellbeing and productivity, combined with evolving societal attitudes towards work-life balance, has fuelled the growth of health and wellbeing investment, which has become an everyday feature of many companies.
Benefits for businesses
Companies that invest in employee well-being programmes reap a range of benefits in addition to the profits that come back in a circle. The main one is a reduction in sickness absence, resulting in improved productivity.
Studies by PwC and the American College of Occupational and Environmental Medicine have found that wellbeing programmes can reduce sickness absence by as much as 25%. In addition, increases in employee engagement, job satisfaction and retention rates have been observed, contributing to a more stable and motivated workforce.
In addition, by offering benefits, a company can be an attractive employer in the labour market and stand out better for talent in a competitive environment.
The biggest winner is the employee
Welfare investments, on the other hand, aim to create better conditions and opportunities for workers so that work can be done more efficiently. Better physical health, reduced stress levels and a better work-life balance increase job satisfaction and improve overall quality of life.
Harvard Business Review study found that companies with well-structured well-being programmes reported a 10% increase in employee satisfaction. However, as employees spend a large part of their lives at work, employers have a significant role to play in promoting people’s health.
Health investment trends in Europe and Estonia
Across Europe, there has been a steady increase in employers’ investment in and implementation of welfare. According to a survey conducted by the European Network for the Promotion of Wellbeing at Work, more than 70% of European companies have implemented some form of wellbeing initiative.
Steady uptake is most noticeable in countries such as Sweden, the Netherlands and Germany, where progressive labour laws and an emphasis on work-life balance have paved the way for large-scale health programmes in which workers also have a say, providing added value to work and freedom for the worker.
Estonia is also making strong efforts to increase investment in health at the workplace. The tax incentive for companies to distribute health and sports benefits, adopted in 2018, has created a favourable environment to offer some freedom of choice to employees, as the tax exemption covers sports and exercise activities as well as, for example, health insurance and physiotherapy. In addition, a number of employers in Estonia have started to offer increasingly flexible working hours, healthy choices in the office and are more open to listening to the wishes of employees themselves.
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Diverse wellness benefits
Employer-provided wellness benefits cover a wide range of areas aimed at improving physical, mental and emotional well-being. These include exercise and wellbeing benefits, mental health support services, flexible working arrangements, on-site sports facilities and access to healthy snacks.
A holistic wellbeing programme includes both preventive measures and support, creating a holistic approach to employee wellbeing both before and after potential problems arise.
Investment per employee
The amount invested by employers in welfare programmes depends on factors such as the size of the company, the sector and its geographical location. According to the European Occupational Health Promotion Network, companies in Europe invest on average €200-400 per employee per year in welfare initiatives. This investment covers a wide range of services, including health screenings, gym memberships, counselling services and health workshops.
In Estonia, the maximum tax-free amount for health benefits is €400 per year, divided equally between four quarters. It is therefore possible for an employer to offer €100 per quarter for health promotion completely tax-free. At the same time, in addition to the financial benefit offered, it is also possible for the employer to carry out or offer in the working environment a variety of changes and improvements mentioned above, from workshops to mental health support.
The shift towards valuing employee wellbeing as a cornerstone of business success has led to a significant increase in employer investment in wellbeing. Research shows that these investments generate financial returns for companies, improve business performance and increase employee satisfaction. As the trend gathers momentum across Europe and beyond, the relationship between employer welfare investment and overall organisational success is shaping the future of the work landscape.
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