What is wellbeing? When physical and mental wellbeing becomes a competitive edge for companies

When we ask what wellbeing at work is, the answer is about much more than job satisfaction or the absence of stress. Wellbeing covers employees’ overall physical, mental, and social wellbeing in their working lives.

Depending on the company, there are many ways to approach wellbeing. But why has employee wellbeing become a strategic focus? The short answer is that several factors make workplace wellbeing a real advantage for the organisation.

One of the big reasons is that companies with happy, satisfied employees are more competitive than their peers – and typically face lower costs on the bottom line. In other words: when wellbeing is high, it’s a win–win for both employees and the business.

But that’s easier said than done. If you work with wellbeing only to boost your bottom line, you’ve already lost the game. Wellbeing can’t stand alone as a strategic initiative on paper: it has to be grounded in how employees experience their everyday work. That’s where workplace wellbeing becomes a balance between the company’s framework and a genuine focus on the people in it.

Before we go any further, it’s important to address what physical and mental wellbeing actually are, and how they affect each other.

We’re not specialists, and we’ll always recommend that you or your employees talk to qualified professionals if you need help. Still, based on our own experience, we want to share a few perspectives that might inspire you.

Physical wellbeing at work is, among other things, about:

• Ergonomic working conditions
• The possibility of moving during the workday
• Variation in working positions
• Access to breaks and recovery
• Tasks and pace that the body can handle over time

In other words, it’s about the conditions employees work under every day and whether their working lives support the body’s needs.

When workdays are full of repetitive movements, high physical strain or very limited opportunities to move, the risk of physical discomfort and long-term strain increases in muscles, joints, and the back.

According to the U.S. Centers for Disease Control and Prevention (CDC), workplace physical activity is associated with improved employee health and wellbeing, fewer sick days, and increased productivity. Research summarized by the CDC shows that physically active employees have lower rates of sickness absence and health-related costs compared to inactive employees.

Physical wellbeing is therefore not just about big one-off initiatives, but about creating everyday conditions that enable employees to stay well both now and in the long run.

Mental wellbeing at work is about how work is experienced mentally and emotionally. Among other things, it includes:

• Clear expectations for tasks and roles
• Realistic demands in relation to time and resources
• A sense of meaning and influence at work
• Psychological safety in collaboration with colleagues and leaders

A healthy psychological work environment means that employees are treated with respect and trust, have manageable tasks, and feel their contributions matter. When the framework for mental wellbeing is in place, work feels engaging and strengthening, which, in itself, supports job satisfaction and wellbeing.

At the same time, research on workplace wellbeing shows that positive communication – grounded in respect, trust and collaboration – forms the foundation of a mentally healthy workplace. When employees feel respected, able to give and receive feedback, and part of a supportive work community, their mental wellbeing improves, morale rises and job satisfaction increases

A workplace where people feel safe to share ideas, questions, and concerns tends to have better collaboration and a stronger shared understanding of tasks.

Feeling unwell because of poor indoor climate? Does it give you headaches? Yes – physical and mental wellbeing influence each other.

When you look at what wellbeing is in practice, research shows that supporting employee health and mental wellbeing requires a holistic approach that goes beyond isolated initiatives. A holistic strategy integrates physical, psychological, social and cultural dimensions of work, and creates a supportive environment where leadership, collaboration and workplace design all contribute to sustainable wellbeing outcomes.

Focusing on just one parameter won’t increase well-being in the long term.

Does that mean you have to start with everything at once? No. Rome wasn’t built in a day. A good idea is to create a plan with smaller, manageable steps.

Depending on your organisation, you can create a plan that fits you. Whether you’re alone with the task or part of a bigger team, your next move is to figure out how you’ll actually work with wellbeing, in other words, which tools you have at hand.

Also read: The A to Z of Recruitment: A Complete Guide

Wellbeing is ultimately created by the people in your organisation, but digital solutions can be a powerful support. Digital tools can create structure, give you an overview, and provide data you can actually use in your wellbeing work.

The tool can’t stand alone and always requires human action. However, research shows that digital solutions can support wellbeing when they are used with a clear purpose and integrated into the right organisational context.

One such tool is HR-ON Wellbeing, which lets you: send out wellbeing surveys, get leadership support and sparring, and give employees access to professionals ready to help before their wellbeing challenges grow too big.

So far, we’ve covered what wellbeing means for companies, the difference between physical and mental wellbeing, and how digital tools can support your work. Now it’s time for a short, practical mini-how-to that guides you through the key steps you’ll typically encounter when working with wellbeing.

The how-to has 10 simplified steps. You can always add more detail and complexity to meet your organisation’s needs.

1. 1. Step: Clarify your definition of wellbeing
      Start by getting clear on what wellbeing means in your organisation, across physical, mental, and social wellbeing. Wellbeing should be rooted in employees’ everyday reality, not only in KPIs.
   2. Step: Map your current level of wellbeing
      Use, for example, a wellbeing survey or pulse measurement to create a data foundation that shows where you stand today.
   3. Step: Identify focus areas
      Analyse the results and pinpoint the most important areas to address – for example, workload, ergonomics, collaboration, or leadership communication.
   4. Step: Prioritise and narrow the scope
      Choose a few realistic focus areas instead of trying to fix everything at once. Small, concrete steps are what move things forward.
   5. Step: Involve leaders and employees
      Wellbeing work is most effective when both leaders and employees are active participants – and feel ownership of the process.
   6. Step: Define actions and responsibilities
      Turn your insights into concrete actions, and make it crystal clear who is responsible for what.
   7. Step: Use digital tools as support
      Use a tool like HR-ON Wellbeing for ongoing measurements, leader support, and early intervention, but remember: the tool is there to support people, not replace them.
   8. Step: Create dialogue and psychological safety
      Follow up on measurements with conversations, open dialogue, and clear communication, that’s how data turns into real change.
   9. Step: Follow up and adjust continuously
      Wellbeing is not a one-off project. Keep evaluating the effect of your initiatives and adjust them as needed.
   10. Step: Anchor wellbeing in everyday life
       Make wellbeing a natural part of your culture and the entire employee journey – not just a strategic initiative, but a shared priority.

Read more: Toplist 2025: How do you find a top HR system?

Wellbeing is more than KPIs and quick fixes; you probably know that already. The real question is: how do you work on wellbeing in a way that benefits employees first, where the competitive advantage becomes a bonus rather than the main goal?

Digital solutions like the wellbeing platform HR-ON Wellbeing can give you a helping hand, so you have data on your efforts and access to professional sparring before issues grow into full-blown cases of poor wellbeing.

You can book a demo with our sales team or use our price calculator to get a better sense of how HR-ON Wellbeing can support your organisation.

Chapters 4 and 5 of HR-ON All the Way have zoomed in on wellbeing as a central part of working life. In the next chapter, we’ll take a closer look at recruitment.