Does employee wellbeing equal a healthy profit and loss for the company?
Can a focus on employee wellbeing also ensure a healthy P&L? Nicola Crichton analyses new research
The concept of improving health and wellbeing in the workplace is one now receiving increasing attention from employers globally – but that hasn’t always been the case. Generally the financially driven owners of mills and workhouses in the industrial revolution didn’t care much for staff wellbeing, for most of their workers were a commodity to be used and replaced like a piece of machinery when they had served their purpose.
But those days appear to be over. Employee wellbeing is increasingly a concern that goes beyond the HR department onto the agenda of the FD. Recent research conducted by the global employee health business vielife and London South Bank University, found senior finance staff in the UK’s largest organisations show equal if not more concern over employee health and wellness than their HR peers do.
There is a clear belief among senior finance staff that a healthy profit & loss, and balance sheet is inextricably linked to healthier, happier workers. While such a link may seem obvious, the level of resonance between these two factors is quite surprising. In vielife’s research, 44% of FDs said employee health and wellness was a strategic priority compared to 38% of HR directors.
More than 92% of finance respondents also discussed the issue at board level compared to 82% of HR. Finance respondents also showed far greater belief that employment issues generally, including health and wellbeing, impacted future organisational performance.
Evidence that senior finance people are frequently prioritising employee wellbeing investments also indicates an understanding of the return on investment (ROI) that can be achieved. Nearly 60% of all respondents thought health & wellness investments yielded returns in productivity but, both finance and HR frequently underestimated the returns possible.
The majority estimated ROIs at between £1 and £5 for every £1 spent on wellbeing. This is much less than a other studies, including an estimate of over £6 to £1, made by the Institute of Health & Productivity Management, Harvard Medical School and Unilever.
With a fundamental belief wellbeing can lead to performance improvements, FDs have a clear role in shaping their organisations’ health agendas alongside HR. But doing so is not without its obstacles. The biggest of those appears to be access to data and ability to measure baseline performance. More finance people consider the lack of this data on employee health a barrier – 30% compared to just 10% of HR. Meanwhile, 59% overall think it is difficult to measure the benefits of investing in their employees’ health.
An understanding of the health status, priorities and motivations of employees at the outset of any investment in health & wellbeing is critical. Otherwise the ability to decide what the right investments are becomes based on unfounded theories or fashions rather than hard facts. The problem of lacking data can be exacerbated in large organisations where workforces are distributed, may speak many different languages and have varied cultural attitudes to health.
Finance also recognised the internet plays a key role in successfully engaging employees in health & wellbeing measurement. Online health risk assessments can be delivered via the web in multiple languages, reaching dispersed workforces and providing a private means for employees to document and self assess their health.
This can improve the take up of wellbeing schemes and accelerate the collection of baseline data which is essential in analysing the health issues having greatest impact on workplace performance. Indeed according to vielife delivering employee health programmes online and in private was deemed important by significantly more finance people than HR.
Of course looking back a century, not all employers failed to realise the value of employee wellbeing. Joseph Rowntree, of chocolatiers Rowntree, and William Lever, the Unilever founder, invested heavily in improving the quality of life for their workers. While his and others’ motivations were largely philanthropic, boardrooms today are following suit, realising the link between personally perceived good health and organisational performance is much more than incidental or fractional.
For FDs the motivations are simple. Being on top of your game at work increases your employees’ productivity, accuracy, persistency, consistency and many other critical factors that make a difference between doing a good job and a great job. While human corporate performance factors like wellbeing can be harder to measure and manage than those traditionally in the realm of finance, FDs are aware of the fact they can make the difference in ensuring a healthy P&L.
Nicola Crichton is a professor of statistics in the faculty of health and social care at London South Bank University