- Increase employee engagement (commitment, loyalty, retention)
- Reduce employee turnover
- Reduce absenteeism (saving direct costs for temps and training; and indirect costs for management time, reallocation of work, potential loss of clients and business)
- Reduce presenteeism (estimated 1.5 times more expensive than absenteeism, through sub-performance, mistakes and accidents)
- Improve productivity (including alertness, concentration and judgment)
- Improve morale and employee up-skilling in areas not immediately obvious through their work functions
- Attract the best talent
- Reduce ancillary expenses (i.e. potential legal costs, claims, private healthcare costs, company insurance etc)
- Improve brand
- Demonstrate sustainable business practises
Why the workplace beats the gym in improving wellbeing
The workplace is one the best environments for learning outside of the formal education system; employers are in the unique position of being able to educate staff as a captive audience. Businesses are ideally placed not only to roll out wellbeing education messages, but to supplement them with a framework that supports the ideas being promoted (i.e. healthy food options in canteens to support eating well, showers available to encourage staff to cycle to work or take lunchtime exercise).
Does your business suffer from any of these wellbeing problems?
Every year in the UK, around 200 million days are lost through sickness absence at an estimated cost of £17 billion to the economy [i]. Over the past two years, stress has become the primary reason for absence[ii]. However, it is not absence alone that costs businesses: presenteeism is on the rise. Presenteeism is where employees, fearing for their job security, worry that absence might be used as a criterion for redundancy and, therefore, present for work when unwell or unfit. Indeed, the cost of presenteeism is one and a half times more expensive than absenteeism[iii] due to underperformance, mistakes, and accidents, all of which have a negative effect on both the individual and the organisation.
Increased pressure to maintain the same (or greater) outputs with fewer staff has forced employees to take on more work with fewer resources. Extended working hours and increased stress result, often without a salary increase. In fact, when inflation is factored into the equation, many are working with an effective pay cut.
Increased stress often results in people relying on unhealthy props to relax. Alcohol plays a large part in Britain's culture (according to government statistics, over 90% of British adults drink) and consumption is on the increase. Hangovers and alcohol-related illness account for 17 million working days lost each year; it is not only the private sector that pays the price, alcohol costs the NHS £2.7 billion each year, with 40% of Accident and Emergency admissions diagnosed with alcohol related injuries [iv]. Excess alcohol consumption can result in many long-term health problems, which compounds the likelihood for the need to take time off work.
Smoking, high blood pressure, lack of exercise, alcohol, obesity and poor diet are the top reasons for early death[v]. Many illnesses, including chronic conditions, can be avoided through better lifestyle practises. Hence, there is immense value in making people aware that they have significant control over their existing and future wellbeing; personal choices often have a greater impact on health than hereditary influences. The advice is not complicated: many significant health benefits can be reaped by taking simple steps to adjust unhealthy habits.
Everyone has a personal responsibility for their own health and can choose whether or not to live healthily. Unhealthy lifestyle choices tend to be made either through lack of knowledge or lack of motivation to make changes. Why then, should employers feel a responsibility to intercede and proactively engage in caring for their employees' health beyond meeting minimum requirements? There are three strong reasons.
Three reasons why the most successful businesses invest in employee wellbeing
First, and most compelling, poor staff wellbeing impacts the bottom line, both in terms of costs incurred through absence, mistakes and temporary cover, as well as profits lost through reduced productivity and missed business opportunities. It makes sense to invest in helping employees perform at their best.
Secondly, with a "Workplace Health Survey" published by the British Heart Foundation earlier this year reporting that 49% of people feel stressed at work on a daily basis, 41% work longer hours, and 20% fail to take a lunch break [vi], there's reasonable cause to conclude that the pressure of working life is possibly the root of illness. It could be argued that employers, whilst not proactively making staff ill, negatively influence employee wellbeing through the ethos and environment of the workplace (figures from the Health and Safety Executive show that some 18,000 employees in the banking and finance industry filed stress-related claims for 2010/2011[vii]. Fighting (or settling) lawsuits damages more than short-term profits, it can harm a company's reputation and brand, leaving long lasting negative associations.
Thirdly, sustainability is no longer an optional enhancement for the corporate elite. In today's society, corporates are expected to conduct their business sustainably: be successful today but ensure there is a legacy for tomorrow. Investors expect to see transparent reporting, with sustainable business practises interwoven within the fabric of the business. This includes employee wellness and engagement, because the health and stability of the workforce typically reflects the health and stability of the business.
Why today's economy is killing employee wellbeing
Since employee wellbeing is core to business success, it is ironic that employers have fewest resources to invest when it is most needed and that lack of investment exacerbates the problem. The continued economic downturn means employees are working longer hours, financially worse off (salaries have remained static but household bills and travel have risen above inflation), feel they have less opportunities to change jobs, all of which can have a negative impact on mental and physical wellbeing. Concurrently, poor health leads to sub-performance, which costs the business further and so a vicious cycle evolves.
The question is not whether business should invest in employee wellbeing, but what sort of wellbeing investments should be made to maximise the return on investment. It appears that the best results come from a short intervention with participants selecting small changes that fit their circumstances followed by a prolonged support programme, all of which can be undertaken with minimum interference to office work. In fact, there is a parallel to the successful quality management programmes(viii) seen in the 1980s and 1990s, where small constructive changes were inserted into existing processes to improve the efficiency of business processes, but this time initiated and applied by the workers themselves.
How to measure success without spending cash
Monitoring and evaluation are crucial to assessing how effective wellbeing interventions are, and can be expected to show a positive financial return over two to three years(ix). Baseline data needs to be established if possible, before commencing the intervention, but do not delay in gathering initial data just because the starting point isn't perfect.
Only 25% of UK employers calculate their absence costs, and these estimates are often based solely on the direct salary cost of employees off sick, and sometimes the costs of temporary cover; few include management time, reduced productivity, lost business, inability to deliver, reduced customer retention, and the type of absence (casual or genuine)(x)
Direct influences on business can be measured by reductions in: staff absence, staff turnover, overtime payments, temporary recruitment, legal costs and claims, insurance premiums, healthcare costs, less accidents and injuries, and management time. Improvements should be seen in staff morale, company profile, productivity and revenues. These can be measured through direct records and a survey or feedback approach.
Investors consider employee wellness and engagement matters to be investment relevant, and increasingly companies are expected to improve reporting on wellness and engagement as an essential part of responsible business practise and the hallmark of a sustainable business(xi).
i. Confederation of British Industry (“CBI”), Work Foundation Report, Apr 2010
ii.Sainsbury Centre for Mental Health (“SCMH”), 2007
CIPD, Absence Management Report, 2012
iv.UK Government, Feb 2012
v.Global Burden of Disease (“GBP”), UK country report, Mar 2013
British Heart Foundation, Workplace Health Survey, Feb 2013
Health and Safety Executive (“HSE”), 2012
The International Organization for Standardization (ISO) created the Quality Management System (QMS) standards in 1987.
Department for Work and Pensions, PWC report, 2010
CBI, Work Foundation Report, Apr 2010
xi. BiTC, Working Well Reporting Guidelines, May 2011