A tangible impact on the territory: Corporate welfare and local development

The Corporate Welfare Lab, through a 2023 study, had already highlighted that the effects of corporate welfare programs are not limited to the company itself. In that instance, the research emphasized their positive impact on parenthood: the more widespread and comprehensive corporate welfare programs are, the more likely employees are to become parents.

The 2024 research focuses on several key questions: What is the perceived effect of corporate welfare policies on the local economy? How do welfare initiatives influence companies' financial performance? Can corporate welfare promote revenue growth and reduce staff turnover?

The study answers these questions through an in-depth analysis, cross-referencing data from five dimensions of welfare (mobility, gender equality, engagement, people care, and employee savings) with the perceived impacts reported by welfare program managers across different corporate and geographical contexts.

The Lab's concept of corporate welfare goes beyond fiscally deductible packages as defined by the law, encompassing all initiatives aimed at improving people’s well-being, including work-life balance measures.

For the research, we analyzed data collected through a survey of 400 Italian companies with more than 50 employees between March and April 2024.

We classified corporate welfare into five dimensions (mobility, gender equality, engagement, people care, and employee savings) and observed which welfare initiatives truly impact the two key areas of the local economy and company performance (in terms of financial and social outcomes).

The results reveal that 59% of companies reported a positive impact of welfare on the local economy, with an increase in hiring (52% of cases) and revenue growth exceeding 10% for 54% of the sample.

More specifically, policies that promote mobility have a positive effect on the local economy, as they stimulate the development of services around corporate offices.

Initiatives aimed at fostering gender equality and work-life balance predictably improve business performance in terms of hiring and reducing turnover, especially for employees under 30. Similarly, they have a positive impact on the local economy, confirming the positive relationship between welfare and the territory.

At a time when personnel (and namely younger generations) management is considered a critical aspect, our research shows that paying attention to people's needs can have positive effects on a company's economic and financial sphere.

Furthermore, these programs are accessible to small and medium-sized enterprises, when entrepreneurs move beyond outdated leadership styles and a view of corporate welfare that is solely tied to fiscal incentives.

The complexity lies in choosing the most suitable interventions for each company—welfare is not a one-size-fits-all solution, and the Lab will continue to work on identifying correlations between specific interventions and economic outcomes, segmenting the beneficiaries by age and other characteristics. Lastly, the implementation phase of these interventions still requires further exploration.