The results of our Analyst Survey suggest companies’ recent push to focus on employee wellbeing is unlikely to fade, even as an economic downturn puts pressure on business.
You might have thought concerns about employee welfare, which shot up the list of corporate priorities during the pandemic, would drift lower as economies reopened and the Covid crisis faded from day to day life.
Fidelity’s 2023 Analyst Survey, takes in the views of 152 analysts who cover a wide range of business sectors across the globe, suggests companies are sticking with the initiatives begun in recent years or doubling down on them in a bid to keep staff happy. Indeed, as the chart shows, in some sectors employee welfare and mental health continue to grow in importance.
“Why” is a thornier question. The simplest explanation is that a lot of companies have years of experience with initiatives like wellbeing workshops, employee assistance programmes, and benefits like gym memberships that promote physical and mental welfare. Employees like these perks and they have become ‘table stakes’ for employers, without which they’ll have trouble attracting or retaining staff. The social isolation and stress brought by Covid also made employee mental health a daily managerial issue and changed how managers deal with workers.
In this reading at any rate, companies are sticking with what works and others are joining in. But elsewhere in the survey there are clues that more hard-nosed commercial motivations may be at work too. Managers in Europe and the United States are dealing with employee demands after a year of high inflation. Our survey shows that while non-labour cost pressures are fading fast, the same is not true of labour costs. ‘Experiential remuneration’ may therefore be one way to keep wage bills from spiralling or staff from jumping ship. More prosaically, rising living costs have arguably created more demand for mental health support from employees struggling to make ends meet.
It is also worth noting that the survey shows employee welfare still comes fairly far down companies’ overall list of priorities, behind obvious ones like revenue growth/preservation and managing costs. Our tech sector analysts top the chart of sectors expecting a greater focus on employee wellbeing this year. Yet, as the past month has shown, that won’t prevent them from cutting jobs. Companies have an eye on keeping staff happy, especially in industries heavily reliant on human capital, but the bottom line will always be, well, the bottom line.