Leadership lesson for SMEs: Do not neglect employee wellbeing

Neglecting employee wellbeing is not just a moral failing; it is a strategic blunder that can have far-reaching consequences.

Leaders of all hues make mistakes all the time but how well they admit these mistakes and rectify them sets them apart. Neglecting employee wellbeing can lead to significant leadership blunders. Yet, its importance is often overlooked.

Leaders who fail to take care of the health and happiness of their workforce risk not only diminished productivity and engagement but also reputational damage and financial setbacks.

There is a ripple effect of sorts. When employee wellbeing is sidelined, a chain reaction of detrimental outcomes ensues. Workplace stress, burnout, and disengagement become prevalent, leading to decreased productivity and higher absenteeism. This, in turn, translates into financial losses for the enterprise, as recruitment and training costs escalate.

The demanding and often stressful work environment in India's IT sector has resulted in several instances of employee burnout and mental health issues.

Remember the Infosys employee’s suicide, allegedly due to work-related stress? The incident sparked a debate about the industry's work culture and the need for better employee initiatives.

Walmart, the current owner of Flipkart in India, has faced numerous controversies regarding its treatment of employees, including low wages and inadequate healthcare benefits. These issues have led to negative publicity, employee protests, and even legal challenges.

There are many such examples of companies big and small neglecting employee wellbeing. How can leaders rectify this blunder? Good leaders always overcome such mistakes through various actions and approaches.

Here are some real-life examples for SME owners to consider:Build a positive company culture

Google, for example, is known for its employee-centric culture. It offers perks like flexible work hours, gourmet meals, and wellness programmes. Leaders at Google understand the importance of a positive work environment, which has led to high employee satisfaction and productivity.

Prioritise work-life balance

Take the case of Microsoft, Japan, which experimented with a four-day workweek to enhance work-life balance. During the trial, it saw a 40 percent increase in productivity.

Mental health support

Unilever had introduced a "Mental Health Allies" programme where employees could seek support and guidance from mentors and experts. This approach helped reduce the stigma around mental health issues and promoted employee wellbeing. This was allegedly triggered by the suicide attempt of a senior HR leader.

Professional development

GE's Crotonville leadership development centre is an iconic example in this regard. They invest in leadership development, providing employees with opportunities to learn and grow, enhancing their overall wellbeing.

GE employees needed this given the pressure former CEO Jack Welch kept them under with stringent performance appraisal systems.

Inclusive workplaces

Salesforce is renowned for its commitment to diversity and inclusion. The company actively addresses issues related to gender, race, and sexual orientation, creating an inclusive workplace that supports employee wellbeing. This was triggered by the higher healthcare costs in a year they were ranked as the best company to work for.

Regular feedback and communication

Adobe employs a "check-in" system that replaces traditional performance reviews, which makes most employees feel stressed. This system promotes regular communication and feedback, improving employee-manager relationships and overall wellbeing.

Fair compensation and benefits

Costco pays its employees significantly higher wages than most competitors and provides robust benefits. This approach can result in a more motivated and content workforce, although pay is not always the best solution in most cases.

As my esteemed colleague at Stanford, Jeff Pfeffer, says, it is not worth dying for a better pay cheque.

Employee involvement in decision-making

An oft-quoted example is that of Zappos, which introduced a "holacracy" system, where employees have a say in the decision-making process. This approach empowers employees and improves their sense of self-esteem.

Recognise and reward achievements

Many leading companies across the world and in India have a system of regular recognition and rewards for employees. Some SMEs too have this.  Such programmes boost morale and wellbeing.

Support employee growth and skill development LinkedIn provides employees with opportunities for skill development and advancement within the company. Similarly, SMEs, too, can provide this and drive up employee satisfaction.

Neglecting employee wellbeing is not just a moral failing; it is a strategic blunder that can have far-reaching consequences. Leaders who consider the health and happiness of their workforce as a priority invest in the long-term success of their organisations.

Leaders can make use of startups like HealthMobis to address the health issues of employees using predictability tools, thus improving productivity.