From Social Guarantees to Business Strategy: How the Understanding of Workplace Well-Being is Changing

11.08.2025

Viktors Kačalovs, Data Analyst at Figure Baltic Advisory

In the last century, social guarantees were almost non-existent

To answer these questions, we must first understand what employee well-being actually means. It refers to the overall level of comfort, health, and satisfaction an employee experiences in the workplace. This includes physical and mental health, a positive working environment, work-life balance, healthy relationships, and opportunities for professional growth.

In the early 20th century, working conditions in Europe were very harsh, and social guarantees were practically non-existent. By the mid-20th century, society began to realize that social welfare was an economic tool, and social guarantees became part of many countries’ policies. At the start of the 21st century and today, well-being has become an important business component – a part of long-term brand development and employer competitiveness.

This shift is well illustrated by the evolution of the working week. In recent years, Latvia has been actively discussing the possibility of a four-day working week. Yet historically, working weeks were seven or six days long, and workdays could last 12 or even 16 hours. For example, the United States moved from a seven-day to a six-day week in the 1930s, and to a five-day week in the 1950s. In the UK, a six-day week was the norm in the early 20th century, with a five-day week introduced only in the 1960s and 70s. Germany adopted the five-day week in the 1950s–60s, France only after 1982, and Japan transitioned from six to five days between 1987 and 1992.

The four-day working week as one example

The four-day working week is part of a global trend – one of the attempts to improve the working environment and employee well-being. In Iceland, this model was trialled between 2015 and 2019, with productivity staying the same or even improving. In the UK, 70 organizations tested it between 2022 and 2023, and 92% continue to use it today. In Spain, a 2021 project involving 200 companies showed positive productivity results. Similar experiments in Japan and Germany also recorded productivity gains.

In Latvia, this discussion resurfaces periodically. The Saeima has even received a collective petition from 11,000 Latvian citizens entitled “For a four-day and 32-hour working week” for further consideration.

Employees no longer work just for pay

Whether we are talking about a four-day working week, improving the work environment, or other aspects that contribute to well-being, it is important to understand that this is not just a pleasant bonus or a passing trend. It is becoming a decisive factor not only in employee retention but also in organizational competitiveness and reputation. Employees are no longer motivated solely by pay – more and more are seeking purpose, the ability to be heard, fair treatment, and psychological safety. At the same time, employers expect results – engagement, accountability, and flexibility.

This means that well-being is no longer just an HR issue or a social benefit, but a genuine resource that can give an organization a significant competitive edge.

The manager’s role in implementing well-being

Well-being, as an investment, clearly pays off – as confirmed by both research and real-life examples. In organizations where employees feel included, valued, and work in a psychologically safe environment, staff turnover and burnout risks drop significantly. Loyalty, creativity, and a sense of responsibility increase.

However, this does not happen automatically – one of the most important factors is the role of the immediate manager. It is the manager who determines whether well-being is put into practice or remains just a declaration in internal documents. The manager sets the tone – whether trust or control and fear dominate the organizational culture.

At the same time, a question arises – is the employer truly responsible for everything, including an employee’s mood, personal life problems, or motivation? While experiences vary, the most common view is that an employer should not take full responsibility for an employee’s life, but must ensure an environment where the employee has every opportunity to perform their professional duties. This makes it particularly important to listen to employees, allow freedom of expression, monitor workloads, foster healthy communication, and balance team resources.

Well-being cannot be imposed

It is important to remember that managers are also people – they can become exhausted from constantly taking care of the team’s well-being. In some cases, well-being demands can become a burden, especially if managers lack sufficient resources or support. Well-being is not the responsibility of a single person – it requires a systematic approach involving leadership, teams, and employees themselves.

Well-being cannot be imposed from above, nor can it be one-sided. If it is perceived as a top-down obligation, employees may reject it or see it as inauthentic. When well-being initiatives are created collaboratively, they become part of the everyday culture.

While many still view solutions like the four-day working week or additional days off with skepticism, such examples often serve as symbols that an employer trusts, respects, and wants to retain their employees. The result is not just emotional satisfaction – it is the company’s ability to attract and keep top talent, implement change, and maintain capacity in the long term. Employee well-being is no longer a question of “Do we need it?”, but rather – “How do we build it so that both employees and employers benefit?”