THE PRINCIPLES OF FINANCIALLY RELEVANT PROMOTION OF WORK WELL-BEING – A FINNISH PERSPECTIVE

Abstract

Despite abundant research indicating that promotion of work well-being is basically profitable for the corporations, the management in many organizations fails to see the financial potential of improving the working conditions of their personnel. The purpose of this paper is to present recent findings on the financial effects of work well-being activity mainly in Finland, and extract five success principles in this context. This study is based on a number of empirical studies in which the author of this article has participated during the past decade and similar studies in Finland and other countries. The main focus is on the relationship between activities which promote work well-being and their financial consequences for the employers. Particularly the findings generated by the decadelong Finnish strategic well-being-project are exploited. Survey data from more than 2000 randomized Finish private and public organizations were collected and analyzed. Finnish cases indicate that companies can benefit up to 20 % of their profits by investing in their personnel. Comprehensive Finnish surveys indicate that the management of work well-being is far from optimal and that companies that take well care of their people do financially well. It is maintained that companies have a limited view of the scope and possibilities of work well-being activity and therefore fail to see its financial potential. The main limitation of this study is that it is based on mainly Finnish and Nordic data and research. This means that some of the cost structures of the companies studied may vary from those of companies in other countries. The magnitude of the financial effects is, however, so large that the findings should be indicative for other countries as well. The practical value of the principles generated and presented in this paper is in that they demonstrate the mechanisms of how promotion of safety and well-being at work is transformed into financial value. That may help public and private policymakers in developing national and company-level human resource strategies. The findings add to the literature of the economic feasibility of occupational safety and health by introducing new explanations to how the economic effects emerge.