The European Council has included corporate welfare within the framework of measures aimed at promoting gender equality and the reconciliation of work and family life . A key tool for improving organizational well-being and a company's productivity, it is intended to enhance employee well-being and be used to attract a young, skilled workforce. By analyzing this year's PMI Welfare Index , published on December 6 by a team of economists, it is possible to understand how things went in 2022.
Corporate welfare as a social pact and the PMI Welfare Index analysis model
Corporate welfare is a set of financial services and benefits designed to enhance the personal, work-related, and family well-being of a company's employees, with the aim of improving organizational well-being and productivity (Santoni, 2017). The European Directive "Work-Life Balance for Parents and Carers" (Council of the European Union, 2022) has included this measure within a long-term strategic approach aimed at exploring opportunities for developing innovative services and models, with the aim of encouraging companies to enhance gender equality and the reconciliation of work and family life (Institute for Social Research, 2022).
In this way, the aim is to promote a balance between the various aspects of workers' lives, increasing the quality of their time outside of work, and ensuring a more equal distribution of family responsibilities between women and men.
The 2022 report
To analyze the progress made in detail, we refer to the 2022 report "Corporate Welfare: A Social Pact for the Country," compiled by a group of economists using the PMI Welfare Index analysis model. This model defines Italian Welfare Champion companies , meaning those with an index greater than 45/100 (PMI Welfare Index, 2022). This figure is calculated by separately processing three indices: initiative, management capacity, and social impact, then producing a summary equivalent to the corporate welfare index.
These measures include, respectively, the scope and intensity of initiatives adopted by companies, i.e., how many areas the company is active in, and with which and how many initiatives; the measurement of how policies are implemented, considering the proactivity of companies, i.e., their propensity to implement autonomous initiatives or initiatives consisting merely of the application of measures provided for by collective bargaining agreements, the methods adopted, the expertise available, the level of communication and employee involvement by the company; and, finally, the measurement of the results of initiatives implemented through indicators such as employment composition and trends, working conditions, contribution to the local community, and commitment to consumers and suppliers.
The first details of the investigation
Currently, the survey includes 6.532 participating companies and has considered 156 variables (last year, it was 127). Among these, we can identify four different types, depending on the importance they place on corporate welfare within their entrepreneurial vision. The most virtuous, which we might identify as Welfare Champions, consider welfare a strategic lever for sustainable development , investing decisively and proactively in it as part of a long-term strategic vision, directly overseen by the company's owner or general managers. Companies considered Welfare Leaders (with an index ranging between 35/100 and 45/100), then, consider it a significant benefit , investing more than average but merely imitating the most common corporate practices, which often coincide with the provision of benefits (i.e., performance-based compensation mechanisms, replacing monetary remuneration) via platforms.
Other companies, however, have a good understanding of the tool but carry out limited activity , and can be identified as Welfare Promoter companies (with a score between 25/100 and 35/100) or Welfare Supporter companies (between 15/100 and 25/100). From this perspective, their managers pay attention to social relations, implement initiatives beyond those provided for in their contracts, and effectively involve their workers, but without investing significant resources and focusing on a limited range of initiatives. Finally, Welfare Accrediter companies (maximum score of 15/100) consider welfare a secondary area and are positioned at the initial level for both initiative and management ability.
Corporate welfare as a tool for employment and reducing gender inequalities
The most numerous profile is "Good awareness but limited activity," representing 33.8% of companies, an increase since the survey began in 2016. This figure is detrimental to the second-largest profile, "Welfare as a secondary area," which accounts for 29,8% of the total but is in sharp decline (in 2016, it accounted for over 40% of companies!). The number of companies considering welfare a significant benefit is also gradually increasing (22,3%), while the number of Welfare Champions has doubled , from 6,4% in 2016 to 14,1% in 2022, demonstrating the increased role of this mechanism in recent years.
But what purpose does this data serve? The same report helps us by showing how companies with a high level of welfare contribute much more than average to employment growth, particularly when considering the balance between hiring and leaving in 2022. In fact, 43% of companies with a high or very high level of welfare recorded a balance of more than 3% of total employees, meaning they are experiencing strong employment growth , compared to an average of 27,3% for all participating companies.
Welfare and young people
It's encouraging to note that among these new jobs, young people under 30 are the most likely to benefit. While this group of workers represents an average of 20% of companies, this percentage, though not particularly high, correlates with the level of welfare, ranging from 18% in companies with initial welfare benefits to 22,1% in Welfare Champions. Furthermore, despite 29,6% of Italian companies employing no young people at all, among companies that view welfare as a tool for sustainable development, this share drops to 18%. This percentage highlights how much work remains to be done in this regard, but also that at least work is beginning to begin.
If we also consider the primary method through which young people are introduced to the workforce—internships—the data shows a much higher propensity among these companies to use these mechanisms and then convert them into permanent employment, especially among companies with more than 250 employees. Indeed, the latter have a conversion rate of 43,8%, almost double that of SMEs, where only 23,5% of interns are hired at the end of their internship. But beyond size, the findings highlight the enormous differences between Welfare Champions and Welfare Accrediter companies, with the former having an interns share of 4,1% of their employees, compared to 2% for the latter, and a hiring rate of 40,7% versus 19,6% for the latter.
Corporate welfare: roles of responsibility for women
Finally, corporate welfare also impacts female employment (51,2% in July 2022, compared to 69,2% for men) (Istat, 2022), a key aspect in the fight for equal opportunities in the workplace. While the data paint a negative picture of the issue, with women representing, on average, only 35,7% of employees in participating companies (PMI Welfare Index, 2022), these figures also vary depending on the importance of corporate welfare for them.
In Welfare Champions, the percentage of women reaches 41%, of which 38,7% hold positions of responsibility (defined not only as managers, but also as collaborators who supervise activities), compared to 29,1% in entry-level companies. Furthermore, on average, companies with no women among their managers account for 42% of the total, but only 14% in companies with a high level of welfare. If we then consider the production sectors, the third sector accounts for 56% of women in positions of responsibility, followed by services and professional firms (over 43%). However, the situation in manufacturing is still less positive, with the percentage varying between 22% and 25% depending on company size.
Still a long way to go
Summing up the survey, it's clear that significant progress has been made since its inception, especially considering that this year was the first in which many companies returned to full capacity after the pandemic. Among these achievements, we highlight first and foremost the growth rate of companies that consider welfare a sustainable development strategy, a starting point for these to become the norm in the market. Despite this, however, the number of companies that consider welfare a secondary area is still too high, and thus rank at the bottom of the ladder, despite still seeing sharp decline.
From this perspective, while a positive aura can be seen in the employment growth of Welfare Champions companies, there is still a long way to go, especially considering the role of young people within them, which is still far too marginal . Last but not least, there is still much to be done in promoting equal opportunities and reducing gender inequalities in the workplace. Indeed, although some positive elements emerge from this report (above all, the beneficial role of the third sector in empowering women), the overall effort is still insufficient, particularly from the industrial sector.
Andrea Gruttad'Auria
Bibliographic and web references
- Council of the European Union. (2022, 5 12). Work-life balance for parents and carers. Council of the European Union.
- Istat. (2022). Employment and unemployment (provisional data) - July 2022. Istat.
- Institute for Social Research. (2022). The reflex project: the corporate welfare community. Institute for Social Research, 1-46.
- Santoni, V. (2017). Corporate welfare and providers before and after the Stability Laws. In F. Maino, & M. Ferrera, Third report on the second welfare system in Italy (p. 91-118). Turin: Luigi Einaudi Research and Documentation Center.
- Welfare Index PMI. (2022). Corporate welfare: a social pact for the country. Welfare Index PMI. 2022 Report, 1-191.
