The health of an organization relies on how well it maintains an engaged workforce while adapting to innovative change. As such, HR departments must consider the mental and social health, physical safety, and career development of their employees. In addition, they must implement solutions for financial well-being while optimizing company culture.
Moreover, neglecting organizational health elements can be costly, as these techniques help drive employee morale. In fact, according to Gallup, disengaged employees result in a $7.8 trillion loss in productivity. On the other hand, when executed correctly, organizational well-being strategies can increase per-employee revenue by 11%.
This article will explore how HR representatives can approach organizational health and the seven crucial pillars of a thriving workplace for leaders and team members.
How Do We Define Organizational Health?
Organizational health defines how well a business develops, communicates, unites its workforce toward a common goal, and adapts to change. While the business landscape is evolving, organizational health is a framework for companies to maintain consistent growth and increase employee morale amid external and internal disruptions and influences.
In addition, HR departments play pivotal roles in a business’ health, as these professionals are responsible for the well-being and interest of employees. HR managers must employ and guide strategies that create a goal-driven work environment, provide value to workers, and ensure the overall organization is progressing toward its cultural vision.
Highlighting the importance of healthy organizational culture is a study by Society for Human Resource Management (SHRM). Based on this research, 90% of employees that rate their workplace culture as poor are actively considering resignation, while 63% are searching for a new job. In addition, 24% of these workers say they cannot trust instructions from their supervisors. Ultimately, the challenges businesses will face due to poor organizational culture will become costly and ineffective for growth. As such, HR departments must prioritize the seven pillars of a thriving workplace culture, which we will explore next.
The 7 Pillars of Healthy Organizational Culture
The essential seven elements of a healthy company include mental and social health wellness, financial well-being, and physical health and safety. In addition, employee development, culture and innovation, and technology and HR involvement are equally important.
Mental Health
The COVID-19 pandemic impacted the mental health of millions of workers in the US, with 44% reporting significantly high-stress levels in 2021. Beyond the pandemic, an American Psychological Association (APA) survey confirms that 71% of employees experience intense work-related stress daily. This survey further indicates that 50% of workers feel their workloads are too heavy without sufficient paid leave, while 48% point to no involvement in company decisions.
Moreover, 87% of respondents say actions from their employers could help improve their mental wellness. For instance, 34% of these employees say more flexible hours would make a positive difference, 32% suggest improved mental health awareness in the workplace, and 30% say companies should encourage them to use their paid leave, and take more breaks during the day.
Additionally, the World Health Organization (WHO) states that businesses lose over $1 trillion in revenue due to unproductivity from poor employee mental health. Fortunately, there are many steps HR departments can execute to solve this, which include:
- Training managers on how to be aware of and promote mental well-being.
- Offer employees an opportunity to provide feedback, which businesses must harness to evolve their work environment.
- Implement and uphold inclusion, diversity, and equality policies.
- Include mental health coverage in employee insurance benefits.
Social Health Wellness
The social health of a workforce describes how well employees interact with each other and their leaders. Employees must connect and develop productive relationships, making team communication and collaboration easier. A study by Gusto reveals that 54% of workers have remained at a job longer than they had planned due to feeling they belong to a community. In addition, working with a great team was the top reason employees chose to stay at a company.
As 33% of HR specialists report that poor team interaction negatively impacts employee morale, businesses must encourage employees to communicate without inequality, exclusion, or workplace politics. To achieve this, HR managers can employ the following team-building strategies:
- Develop channels for two-way feedback.
- Create weekly or monthly social challenges that drive interaction among employees.
- Initiate volunteer days, which can help the workforce connect through shared values.
- Promote a respectful work culture by giving every team member a voice and treating everyone equally.
- Develop fair conflict resolution strategies built on transparency.
Financial Wellbeing
To achieve optimal organizational health, HR managers must guide fair compensation among employees. According to research by PwC, low remuneration was the top reason US workers left their employment in 2021. However, workforce compensation is only a minute aspect of financial well-being. HR departments must contribute to and implement financial counseling, opportunities for monetary progression, employee incentives, and similar strategies to benefit the organization.
Furthermore, the impact of HR on these monetary practices can help organizations become more likely to increase their financial targets by 20 times. As such, HR managers must leverage their control to ensure employees receive fair compensation, and programs to achieve financial well-being.
Physical Health and Safety
Physical health should be a priority for HR departments—over 20% of employees have at least one disability, 60% have one chronic illness or disease, and 75% feel burnt out. As such, organizations must design and deploy strategies and programs to improve the physical health of their workforce. Although companies may encounter limitations in achieving this, here are a few strategies HR specialists can apply:
- Implement a team health challenge that incentivizes employees to practice healthy lifestyle habits.
- Encourage and support workforces to maintain a positive work-life balance.
- Begin each day by initiating workplace exercise and stretching.
- Offer healthier meal options if the organization sells food and beverages onsite.
Employee Development
Employee development opportunities are critical for the advancement of workforces and organizations. According to research by McKinsey & Company, 45% of workers left their jobs in 2022 due to a lack of development and training opportunities. In addition, 70% would abandon their current employers for those that provide upskilling and reskilling programs.
On the employer’s end, teams with access to career development training are 15% more engaged and boast 34% higher retention rates. To leverage these advantages, HR departments can implement:
- Networking events
- Industry training courses
- Mentorships
- Internships
- Skill certifications
- Performance reviews
- Career Coaching
Culture and Innovation
As the average American spends almost 38 hours weekly at work, company culture is vital to engage and motivate employees. Based on a survey by PwC, 72% of HR professionals confirm that corporate values help their organizations adapt better to change. Additionally, 69% of companies that evolved during the COVID-19 pandemic report that culture gave them a significant competitive advantage.
Furthermore, a study by Quantum Workplace proves the connection between employee engagement and business culture. According to this study, workers who report a positive company culture are 3.4 times more likely to be engaged, and 66% say an excellent work environment positively influences their productivity.
While developing a thriving environment does take extensive time, organizations can begin with a few of these techniques:
- Gather and implement constructive employee feedback—85% of employees take more initiative when they receive feedback at work.
- Set realistic expectations for workers and communicate these goals, as employees with clear goals are 3.6 more likely to be committed to their employers.
- Recognize and celebrate employee achievements, with 54% of HR professionals confirming that recognition improves workforce engagement.
Technology and HR Involvement
Ultimately, businesses would only secure all the pillars of a healthy organization with the contribution of HR and the implementation of automated HR technology. First, a report by The Josh Bersin Company confirms that businesses that rely on automated tools for employee benefits and data analytics are two times more likely to innovate effectively, and four times more likely to adapt to change.
Next, HR departments have control and influence over ensuring the overall health of the organizational culture. In fact, based on the same report by The Josh Bersin Company, technology, and HR capabilities are the second priority for organizational health, with a safe work environment and physical health at first and second, respectively.
Ultimately, by leveraging these seven key elements, businesses can develop positive health, engage workforces, and maintain consistent growth through innovative change.
