The Corporate Welfare Plan: an opportunity for companies and for their employees

In recent decades, the wellbeing of workers has taken center stage in the business world, with companies playing leading roles as responsible social actors. Specifically, corporate welfare practices have moved into the spotlight, fundamental factors in improving employee satisfaction and productivity, and consolidating the relationship between the company and its workers, who are crucial stakeholders in the value creation process.

In our research activities at the Corporate Welfare Lab of SDA Bocconi School of Management, we interviewed a number of companies that seemed quite perplexed about how to measure the impacts on performance of corporate welfare, despite all the attention the topic has been getting. This ambiguity is what led us to our research objective: to closely examine the existence of a causal relationship between corporate welfare initiatives and corporate and social performance, in a context marked by macroeconomic uncertainty and profound post-pandemic changes.

Let’s delve into detail. In our work, we formulated three research hypotheses to analyze how corporate welfare can serve as a systemic driver and key factor in developing employee skills, which in turn impacts revenue growth, engagement and attractiveness, and parenthood in companies. Our ultimate goal is to help develop a deeper understanding of the role and effectiveness of corporate welfare in the current business and social landscape.

FIGURE 1 – Determining the Impacts of Corporate Welfare: research hypotheses  

Working with the Corporate Welfare Lab, supported by its partners Edenred, PwC, Danone, Coca Cola and CSAIn, we ran fine-grained study on this topic, focusing on the dynamics that exist between the company, its employees and individual well-being. We conducted an extensive survey involving more than 400 Italian HR managers to explore the impacts of corporate welfare on company performance, employee engagement and birth rates in companies.

In our analysis, we looked at four essential aspects of corporate welfare which are fundamental to understanding its impact and effectiveness. First of all is a clear business plan, which serves as a road map for rolling out welfare initiatives. Second comes the corporate engagement cluster, a three-tiered indicator that measures the company's engagement and commitment on welfare policies. Third is the size of investments in corporate welfare, which signifies the degree of commitment and resources earmarked for enhancing workers’ wellbeing. Finally, we considered the type of welfare services that companies offer; this discriminating element can go a long way in shaping the overall impact on corporate and social performance. With these four factors, we established an initial perimeter for investigating corporate welfare and evaluating its effectiveness within the company.

FIGURE 2 – Dimensions of Corporate Welfare (independent variables) 

Our findings show major impacts on all levels of analysis: Company Level:

• When companies implemented a holistic corporate welfare system with a clear plan, carefully crafted services, and increasing per capita investments, we found sizeable growth in revenues and greater employer attractiveness.
• Worker Level: Corporate welfare positively influences employee turnover and engagement, contributing to greater stability and job satisfaction.
• Parenting: Corporate welfare also affects parenthood, promoting a more favorable working environment for employees who are parents, thanks especially to specific types of parent-friendly services.

FIGURE 3 – Overview

Our study shines a light on the crucial role that corporate welfare plays in fostering a positive, sustainable organizational climate, and in helping the company move toward a more inclusive future centered on people's wellbeing. In fact, corporate welfare represents a powerful tool that can improve not only the quality of working life, but productivity and business performance too. 

Before concluding this report, below we share some open issues that emerged which could point to directions for future research at the Corporate Welfare Lab: 

• Customizing corporate welfare services: When corporate welfare initiatives are designed to meet the specific needs of employees, this may maximize the positive impact on individual wellbeing. 
• Continuous evaluation: By carefully and continually monitoring and measuring the effectiveness of corporate welfare initiatives, they be optimized to adapt to the changing needs of individuals and the company. 
• Engaging stakeholders in corporate welfare: By getting employees and all stakeholders actively involved in designing and implementing corporate welfare policies, there may be greater consensus and a bigger impact at an entrepreneurial level.