Employee wellbeing is key to a business’ success – recent research provides insights on the significant impact it has on company revenue and bottom line. A new report from Oxford University provides an analysis of a hypothetical top ‘Wellbeing 100’ portfolio – which outperformed the NASDAQ by 30%. This outperformance was consistent in good markets, as well as bad. Business leaders ignoring this risk will fail to be competitive. But the existing solutions being implemented don’t work – businesses need to rethink their wellbeing policies. Below I share data for a business case to argue for a pivot in wellbeing strategy; insights into the status quo, why it isn’t working, and suggested next steps.
The Employee Wellbeing Business Case
That “employee wellbeing is a risk and an opportunity that businesses cannot afford to ignore” (HBR, June 2022) should no longer be news to business leaders. With 42% of US employees leaving a company doing so due to burnout, 23% of UK employees reporting being under ‘extensive pressure’, 48% of Americans looking for a new job, and the average cost of turnover being 33% of an employee’s salary – a burnout, unhappy employee will be costing you money. Not only in turnover costs but the day-to-day productivity of staff is impacted too. A business gains 36 days of an individual’s productivity via an improvement in their wellbeing.
There is a 23% difference in the profitability of businesses whose employee engagement score is in the bottom percentile, in comparison with businesses whose score is in the top percentile; companies who have good wellbeing scores, perform better in the stock market. A randomised and controlled trial run by scientists in the UK, suggested that there is a causal link between happy staff and an increase in sales: telesales workers at BT who were happier and more productive, had a +3 increase in sales per week, per unit of happiness (on a 0-10 scale; equates to a 12% lift in productivity).
Emerging Concerns and Opportunities
Strategies to improve the health of employees, fall under the ‘S’ (social) of the ESG criteria. The expectations of investors will be evolving in terms of requirements for ESG behaviours, with one large investor house – Blackrock – already asking CEOs of businesses it has invested in to report on the ‘E’ (environment). The increasing attention on mental health post-covid, and the emergence of respected bodies like the World Wellbeing Movement – will place an increased emphasis on the ‘S’, the psychological safety of employees.
I could provide additional studies, supplementary statistics and more reports that provide evidence on the impact improved workplace wellbeing has on profitability – you can find some useful examples in this article. This should not be news to business leaders, but what is news is that the existing policies the majority of companies implement to embrace this opportunity do not actually work.
What is Workplace SWB
A person’s well-being incorporates their physical, social, financial, emotional and professional health. Improving ones wellbeing requires a holistic approach – it includes improving: sleep; nutrition; financial support; as well as increased exercise; building mental resilience; and being supported by a social community.
The widespread understanding of wellbeing in the workplace is often one conflated with wages, benefits, working hours, access to flexible working, as well as the levels of stress and fairness within the working environment.
This definition and approach of workplace wellbeing is focussed on drivers of wellbeing, and not the actual outcomes. Are they actually improving people’s health? Recent (May 2023) research from Oxford University’s Wellbeing Research Centre has acknowledged this as a limitation and provided the following definition:
Workplace wellbeing is:
- Job satisfaction
- Emotional experience of work
- Finding work purposeful, worthwhile, or meaningful.
If businesses truly want to impact their workplace wellbeing, Oxford University’s research suggests a pivot in how it is measured. This approach has been adopted by the job board Indeed – the data of over 15 million survey respondents (US initially, now rolling out globally) is used to provide prospective candidates with a wellbeing score for a company. With 42% of attrition attributed to wellbeing, and with wellbeing scores now influencing the pool of talent – businesses that do not pay attention to this aspect of the workplace, and a business that is short-sighted in how it measures and creates policies in this space – is missing a trick.
How are businesses currently tackling the wellbeing problem?
Businesses have varying maturity in how they tackle workplace wellbeing. Approaching wellbeing as more than just medical insurance and a gym subsidy is the first step; many companies now offer mental health support via BetterUp and the like; or financial advice via e.g. Octopus MoneyCoach. Manager behaviour has a large impact on employee wellbeing – so companies are offering training to their line managers. They may also offer access to wellbeing platforms like Virgin Pulse which offer training and resources to improve health.
Do current employee wellbeing policies work?
The problem is – most people don’t use the resources. Not having access to childcare; not getting enough sleep; leaders still sending emails at ridiculous hours, or businesses not embodying the flexible working principles they promote – these are issues that are not fixed by access to resources. Companies need to create a social norm, they need to make access easy – employees need to see their CEO talking the talk and walking the walk. They need social permission.
Furthermore – it is not enough. Recent research (May 2023) gleaning data from over 27,000 employees found that initiatives to improve mental wellbeing – mindfulness or yoga classes for example – had no effect on mental health. The area that businesses are investing in the most (potentially because it is the easiest) – providing education and support, (‘access to resources’) explains just 3% of wellbeing impact. The workplace factor that has the biggest impact on wellbeing is ‘absence of negative workplace behaviour (at 60%). So not only are people not using the resources provided, even if they did the impact would not be huge. This disconnect between what is delivered versus what is needed has been coined as the ‘Work Wellbeing Paradox’ by the World Wellbeing Movement at this year’s World Happiness Summit.
Next Steps to Improve Workplace Wellbeing
To ensure your business maintains a competitive edge and increase the potential of profitability, what wellbeing policies could be implemented? It seems as though pivoting focus away from the ‘easy fixes’ towards policies that are harder to implement but should provide significant gains, is a viable route. If negative workplace behaviour is a key culprit for reduced wellbeing, perhaps placing more emphasis on interviewing for soft skills, not just hard skills, is an intervention to consider.
Consider a 4 day work week as a potential intervention – the recent global pilot study provided significant results in improving wellbeing, retention, talent attraction and revenue.