I’m a forever optimist, and I believe most founders and executives genuinely care about their people. When you design an environment that supports staff retention, satisfaction, and wellbeing, it becomes easier to attract and retain great talent. Yet across the market, the strategy of “designing for growth as well as staff wellbeing” isn’t always a given. Some organisations put staff wellbeing at the core of their purpose, optimising for both profitability and people, others work hard to deliver good to community. Many solely focus on shareholder value, growth and margins, or pivot strategies as their leaders or ownership structures change.

One of the key metrics for assessing a company’s capacity to fund employee wellbeing or community initiatives is its EBITDA margin. Although it isn’t a proxy for wellbeing itself (sometimes, it could indicate the exact opposite), a healthy margin is often a prerequisite for meaningful investment beyond simply “keeping the lights on.”

Companies with financial strength, driven by innovation and market differentiation, are better positioned to foster environments where people thrive. But ultimately, it’s up to leadership and the company owners to decide “what’s enough” and whether they’ll invest that potential to fund growth, debt reduction, staff retention or extract the value to benefit shareholders.

“We view employee wellbeing not as a perk, but as a core driver of performance. Healthy, happy people are the real engine of innovation.” — Tobi Lütke, CEO, Shopify

What Is EBITDA Margin, and Why Does It Matter?

EBITDA margin measures how efficiently a company turns revenue into operating earnings before interest, taxes, depreciation, and amortization:

EBITDA margin = (EBITDA / Revenue) × 100

A higher margin can signal strong financial health, operational efficiency, and the capacity to invest in long-term value creation—whether that’s R&D, innovation, brand equity or people. But a high margin can also stem from aggressive cost-cutting or under-investment in staff. So the context is key.

Can EBITDA Margin Reflect Employee Wellbeing?

Not directly. It doesn’t measure morale, burnout, or psychological safety, but in some cases, in companies with genuine focus on wellbeing, it could be correlated. When high margins are driven by innovation, market differentiation and strong brand equity, i.e. not just cost control, companies often have the flexibility to invest in culture, benefits, and growth. Conversely, low margins, especially in small companies and scaleups with lack of capital, could coincide with cost pressures, layoffs, and stress, though that’s not always the case.

So, what are some of the things leaders can focus on to move the needle on staff wellbeing, and unlock the potential to fund it?

Conditions That Enable High EBITDA Margins

1. Differentiated value proposition

Building a differentiated value proposition, i.e. a set of products or services that are unique, hard to replicate and backed up by a defendable, compelling story is a must for leaders who are looking to improve their company’s profitability. Product and Marketing leadership are key – as is the ability for both teams to collaborate and integrate seamlessly.

“Our industry does not respect tradition — it only respects innovation.” — Satya Nadella, CEO, Microsoft

2. Scale

Scale is a big one. Every business has its fixed and variable costs. A high fixed-cost base can be a problem in early stages of a business as it’s challenging to deliver the required profitability at a small scale. Once companies get past their breakeven point and maintain healthy, consistent profitability, further revenue growth (or a larger portion of it) can flow to EBITDA faster. This is the point when leaders in scaleup companies can become more deliberate about people and wellbeing focused initiatives, because they have the means to fund them.

3. Predictable revenue

SaaS and subscription-based companies typically have predictable, smooth revenue and comparatively lower acquisition costs. At a scale, this creates conditions where higher EBITDA margins are easier to achieve.

4. High gross margins

Capital light companies, and industries with intangible assets (IP) such as software and platforms are better placed to attract higher gross margins once the products are developed, as the cost to maintain these assets is incremental compared to their ability to generate revenue. This is harder to achieve in industries with a heavy manufacturing or inventory burden.

5. Pricing Power

Selling into geos that can pay higher price, developing market monopoly or (more controversially) a price lock-in are all strategies that enable businesses to increase its pricing power.

6. Focus on core business

Focused portfolio management means divesting low margin assets and services regularly, and reallocating resources to high return areas. It is always easy to keep ‘adding more’ without considering cost of maintaining complex product sets and portfolios.

7. Cost discipline and efficiency

Automation, lean processes and focus on reduction of technical debt keeps costs low. Strategic outsourcing of non-core functions can also help.

8. Regulatory and tax advantages

There is a reason why the Google Campus in Dublin is known for its staff culture. R&D tax credits, strong IP protections and geographies with low tax burden enable innovation growth and value capture that can flow into employee wellbeing.

Here are some examples of companies known for both high EBITDA margins and employee wellbeing focus:

Examples: EBITDA Margins & Staff Wellbeing

“If you give people freedom, they will amaze you.”
— Laszlo Bock, former SVP People Ops, Google

Conclusion

While EBITDA margin isn’t a direct measure of employee wellbeing, it is often a necessary foundation. Companies that combine strong financial performance with intentional wellbeing design, not just perks, create environments where people can do their best work and stay healthy.