By Dr. Martín Burt
European employers measure how people feel at work, but often miss the financial, housing and family pressures shaping whether employees can truly thrive.
Europe’s workplaces may look healthier on paper than they feel in practice. Companies routinely track engagement, satisfaction, absenteeism, retention and access to benefits, yet these measures reveal only part of the conditions that determine whether employees can build secure and fulfilling lives. Beyond the workplace, rising living costs, housing insecurity and financial strain continue to affect millions of Europeans. Eurofound’s latest research shows that 61% of respondents in low-income households struggled to make ends meet in 2025. A recent report from ACEGE of 3,459 employee households in Portugal points to a deeper blind spot: while health and housing indicators were relatively strong, income and employment emerged as the most vulnerable dimension, with 31% of responses falling into “red” or “yellow” categories. The hidden problem, then, may not be what happens inside Europe’s workplaces, but what employees are carrying into them.
Why does employee wellbeing need to be measured beyond the workplace?
Employee surveys are good at answering questions such as whether people feel engaged, supported by managers or satisfied with their jobs. They are less equipped to explain why an employee may be struggling despite reporting a positive workplace experience. We know that people do not leave their personal lives and struggles at the office door. Housing costs, household debt, access to healthcare, family responsibilities, transport, social connection and the ability to plan financially can all affect work concentration, resilience, and decisions about whether to stay in a job.
Europe’s wider evidence reinforces this. Eurofound’s 2025 Living and Working in the EU e-survey found that 61% of respondents in low-income households struggled to make ends meet, compared with 9% in high-income households. The same survey found continuing housing insecurity and persistently weak mental wellbeing. These are not simply social-policy issues; they shape the environment in which employees live and work.
This does not mean companies should attempt to monitor employees’ private lives. It means they should recognize that workplace indicators are only one layer of wellbeing and design measurement that lets employees voluntarily identify the conditions that matter to them. The goal should be understanding and eventually support, not surveillance. A useful wellbeing framework should give employees agency over what they disclose, protect individual privacy, and use aggregated findings to identify patterns rather than label individuals.
What can Portugal’s experience tell European business leaders?
Associação Cristã de Empresários e Gestores (ACEGE) utilizes the Poverty Stoplight for Business and recently conducted a study that analysed 3,459 valid responses from families connected to organizations across hospitality, automotive, pharmaceuticals, banking, consulting, infrastructure, healthcare and the nonprofit sector. Participants assessed 52 indicators across six dimensions of wellbeing, with red indicating a major issue, yellow indicating vulnerability, and green indicating positive result.
The results are revealing because they do not present a uniformly deprived picture. Health and Wellbeing was 76.7% green, Housing and Infrastructure 74.7%, and Interiority and Motivation 71.6%. Yet Income and Employment was the most vulnerable dimension: 7.1% of responses were red and 23.9% yellow, meaning 31% fell into a vulnerable or warning category.
A household can have adequate housing, relatively strong health and personal motivation while still facing economic insecurity. Conversely, an employee can appear financially secure while experiencing difficulties in another dimension.
The Poverty Stoplight’s distinctive feature is that it is participatory: individuals assess their own circumstances against concrete indicators rather than being reduced to a single score. The methodology grew from Fundación Paraguaya’s work on multidimensional poverty and helps families identify priorities and act on them.
For businesses, the lesson is not to import a poverty programme wholesale. It is to broaden the questions they are asking their employees to better understand and support them. Instead of asking only, “How satisfied are our employees?” leaders can ask, “What conditions are helping or preventing our people and their families from becoming more secure and autonomous?”
Companies often measure employee engagement and satisfaction, absenteeism and retention, and benefits uptake, but imagine being able to understand whether there are underlying conditions that may contribute to stress or sudden job changes, or whether the available support matches the employees’ actual needs, indicating why many employees may not be using benefits offered. The role of the Stoplight’s is to first empower the employee and his/her family, then the employer.
Why can one-size-fits-all benefits miss the real problem?
Traditional benefits programmes tend to assume that a workforce has broadly similar needs. In reality, vulnerability can vary sharply by age, income, family structure, location, occupation and life stage.
A young employee in Lisbon may face housing affordability pressures that do not affect a colleague living in a family-owned home. A single parent may value predictable scheduling and childcare support more than a health/fitness benefit that looks generous. A lower-paid worker may benefit more from wage progression or emergency savings support than from a wellness app. A worker caring for an older relative may need flexibility that is invisible in an annual engagement survey.
A multidimensional approach helps companies see these differences without assuming that every problem belongs to the employer. The point is to identify where organizational policies can make a meaningful difference and where partnerships, public services or employee-led solutions are more appropriate. The practical implication is segmentation: companies need better information about which support is relevant to which groups.
How can companies turn better measurement into action?
Measurement is useful only if it changes decisions. The Portuguese case suggests a practical sequence for business leaders.
First, broaden the diagnostic. Combine conventional workplace measures with voluntary, multidimensional questions about financial resilience, housing, health, family circumstances and social participation. Keep the questions concrete and understandable.
Second, look for patterns rather than individual deficits. If a particular location shows unusually high levels of housing insecurity, the response might involve transport, location-based pay, flexible scheduling or partnerships with local services. If financial vulnerability is concentrated among particular grades, compensation and progression deserve closer examination.
Third, connect findings to existing business decisions. Wellbeing data should inform compensation reviews, benefits design, working-time policies, healthcare access, financial education and workforce planning, not sit in an annual HR report.
Fourth, measure change. A diagnostic should establish a baseline and allow employees to see whether conditions improve. This is where a traffic-light logic can be useful: it makes complex conditions visible without pretending that wellbeing is a single number.
If it’s not already clear, it should be noted that the diagnostic itself is a benefit the company is providing. Addressing the issues ultimately remains the employee’s responsibility, framed positively as empowerment: giving employees greater awareness, tools, and connections to take action. In this way, the company makes it clear that they are a supporter and connector, not responsible for solving these issues. However, this is a great opportunity for companies to strengthen their presence and influence in the community by engaging with public institutions and service providers. Working with these partners, employers could go a step further and develop a “solutions bank” that connects employees with existing resources and support.
A practical checklist is:
- Ask employees about conditions, not just feelings.
- Disaggregate results enough to reveal meaningful differences.
- Prioritize issues the organization can influence, whether directly or through partnerships with service providers.
- Co-design responses with employees where possible.
- Track outcomes rather than only participation rates.
- Be explicit about privacy, purpose and limits.
What would a broader definition of wellbeing mean for European companies?
Employee wellbeing should not be reduced to whether people are happy at work. Companies should not be expected to solve every social problem their employees face. A better definition is more practical: do the conditions surrounding employment help people build stable, healthy and autonomous lives?
That question aligns with the direction of wider European evidence. Eurofound reports that cost-of-living pressures, housing insecurity and fragile mental wellbeing continue to shape people’s experience of living and working in Europe. The Organisation for Economic Co-operation and Development (OECD) “How’s Life? 2024” Report similarly finds that employment and average incomes have proved resilient while financial insecurity and housing costs remain significant threats to wellbeing.
For business leaders, this creates a more demanding but more useful standard. A strong wellbeing strategy should connect the workplace to the realities employees are navigating beyond it. That does not require employers to become welfare agencies. It requires them to understand where employment is helping, where it may be insufficient, and where targeted action could remove barriers to stability.
The Portuguese experience offers a simple warning: strong results in several dimensions can coexist with a serious weakness in another. If companies only measure the dimensions they already know how to manage, they may miss the constraint that matters most.
The future of employee wellbeing measurement should therefore be less about collecting more sentiment and more about understanding the conditions behind it. The companies that do this well will be better placed not only to support employees, but to build workplaces where people can plan, participate and thrive.
Conclusion
The case for broader employee wellbeing measurement is not a case for employers to manage employees’ private lives. It is a case for seeing the conditions that shape work. By combining workplace sentiment with voluntary, multidimensional insight into financial resilience, housing, health and family circumstances, companies can make support more targeted and more accountable. The next step is to treat wellbeing data not as an annual score, but as evidence for better decisions about how work can help people build stable, autonomous and dignified lives.
Dr. Martín Burt
