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A Commitment to Well-being

Companies can build sustainable and profitable businesses by devoting more attention to the social and physical welfare of their employees.

(originally published by Booz & Company)

Building Sustainable Organizations: The Human Factor

Jeffrey Pfeffer

Stanford University Graduate School of Business, Research Paper No. 2017

Date Published: 
February 2009

Many companies have taken steps to show commitment to the environment, but few exhibit a similar commitment to their employees’ health and welfare. Consider the case of Walmart: Although the retailer has, over the last few years, made efforts to limit waste and rely solely on renewable fuel sources, it offers health-care benefits to so few of its workers that more than 45 percent of Walmart employees’ children either are uninsured or rely on state-funded health insurance. The paper also highlights some disturbing statistics about the effects of job-related stress and uncertainty. For instance, the death rate for laid-off employees increases 17 percent over the two decades following job termination.

The author suggests that employers should concern themselves as much with the social well-being of their workers as with their impact on the environment, making the case that those companies that do so often build more profitable and sustainable businesses. For example, SAS Institute Inc., the largest private software developer in the world, has long asked its employees to hold their workweeks to 35 to 40 hours, ensuring that they maintain a reasonable work–life balance. As a result, SAS has been able to attract a disproportionate number of women into its managerial ranks, and its average turnover rate is well below industry norms.

Bottom Line:
Companies can build sustainable and profitable businesses by devoting more attention to the mental and physical welfare of their employees.

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