Why do some workplaces feel supportive, motivating, and even energizing, while others drain employees? In today’s economy, small firms face a critical question: can digital tools not only increase efficiency but also improve employee well-being? And how does teamwork go together with digitalization?

In our new study, “Digitalization and Organizational Climate for Well-Being in Small European Firms: Does Collaboration Matter?”, we addressed these questions using a dataset comprising over 11,500 small European firms. It turns out that digitalization, measured through the use of data analytics, software, computers, and even robots, does not just change workflows; it can also shape the organizational climate for well-being. It affects the way employees experience their workplace, their sense of support, autonomy, and growth.

In recent years, concerns about employee well-being have gained prominence across Europe. Employees spend between 30 and 40 hours per week at work, making it essential to understand how organizations can create a climate that supports well-being. Small firms (10–50 employees), which are the backbone of Europe’s economy, play a vital role in economic performance and regional development. However, they often lack the resources of larger organizations, so the way they adopt digital tools and organize teamwork can make a real difference.

Our study found that digitalization can indeed positively influence the organizational climate for well-being. Companies that used data analytics, specialized software, computers, and even robots reported stronger climates for well-being. Among these, data analytics had the strongest influence, while robots had the weakest. This indicates that adopting digital tools can help create a more supportive and motivating work environment.

Teamwork also played a strong positive role in the organizational climate for well-being. However, in some cases, contrary to expectations, it even dampened the positive effects of digitalization. In young firms, teamwork reduced the potential benefits of using data analytics for the well-being climate. In service firms, it weakened the positive impact of software use. By contrast, in production firms, teamwork amplified the effect of software use. These results suggest that the “more is better” approach does not always hold. The combined impact of digitalization and teamwork depends on a firm’s age, industry, and context. Therefore, small firms need to carefully balance their use of digital tools with teamwork.

Overall, our research underscores that digitalization is not only about efficiency, but it is also about people. By choosing technologies that support autonomy, learning, and communication, and by aligning them thoughtfully with teamwork, small firms can build workplaces that foster well-being.

Takeaway

Digitalization is not just about efficiency. It is also about people. When chosen carefully and aligned with collaborative practices, digital tools can create workplaces where employees feel supported and motivated.

Authors: Inna Majoor-Kozlinska - i.kozlinska@rug.nl, Jelke Veltman - jelkeveltman@gmail.com

Reference: Veltman, J. R., & Majoor-Kozlinska, I. (2025). Digitalization and organizational climate for well-being in small European firms: Does collaboration matter? Administrative Sciences, 15(9), 337. https://doi.org/10.3390/admsci15090337