Employer responsibility for improving employee health and productivity
“What gets measured gets managed.”
Research highlighted in The Times echoes this famous quote, one which has formed the backbone of everything we do at 87%.
The take-home message from the research is that by measuring and monitoring employees’ health, businesses can personalise the wellness initiatives they offer to their employees. This in turn would boost productivity and revenue, while reducing sick days and presenteeism, all while saving up to £1.2 billion (!) in NHS money each year.
“Almost half of work sign-offs for long-term sickness are mental-health related. Nearly half of UK employees report mental health problems, which are more prominent in the under-30s”
Although with a primary focus on physical health incentives, the research’s above summary raises important questions for mental health initiatives in UK organisations.
The current problem and its scale
Currently such initiatives are failing, as we discussed in a recent article. The latest estimates from Deloitte put the cost of poor employee mental health to UK organisations at a staggering £56bn per year:
£28bn: presenteeism
£22bn: staff turnover
£6bn: absenteeism
To make this figure more relatable, let’s break this down for an example company (A) who approached 87%:
Company A has c10,000 employees and reports annual revenue of approximately £1bn. Using our industry-leading ROI calculator, we estimated their current cost of poor employee mental health at £24 million. With just a 3% rise in mental health across their organisation, we estimated annual savings of almost £9 million: £8 million alone in boosted productivity, and a further £1 million from reduced presenteeism, staff turnover and absenteeism.
For a very rough measure, you can try some mental maths to scale these figures to your business size and revenue. Or (much easier) we’ll do the math for you and you’ll get a more reliable measure. Fill out a few quick metrics and we’ll send you your estimates (no sales emails or follow-ups).
The fundamentals of boosting employee productivity
What we have learned from our clients, and from conversations with HR leaders of multinational corporations, is that a lack of data-driven insight is a major contributor to the current rising costs of poor employee mental health and falling rates of employee productivity.
There is no one-size-fits-all solution to improving employee productivity. As summarised in the research reported in the Times, employee wellbeing strategy must be more nuanced than this; unique problems, that differ by audience, require tailored solutions.
“By measuring and monitoring employees’ health, businesses can personalise the wellness initiatives they offer to their employees. This in turn would boost productivity and revenue, while reducing sick days and presenteeism”
Utilising data-driven insight changes the game. By baselining wellbeing across your organisation, you gain actionable insights into the underlying wellbeing of employees. You uncover issues in your organisation you would otherwise be unable to see. You learn which audiences are struggling most and identify key target areas for improvement to drive better productivity, performance and culture. You focus wellbeing initiatives where, and on whom, they are needed most. You track the success of such initiatives, over time and across different populations, and measure return on investment.
Employees will often wait until their issue is fairly acute before seeking any help, at which point the business has already absorbed about 80% of the cost of poor mental health (through lost productivity, presenteeism and absence). With a focus then on prevention, not just intervention, businesses can start to build better employee health rather than tackle ill-health, in turn boosting productivity and revenue.
A shift in focus, preparing for regulation
All evidence points to an increasing shift away from EAPs. Born in an era in which wellbeing support services were viewed more as insurance rather employee-focussed, these operate on an outdated and negligent financial model, and see utilisation rates of only 2-8%.
The focus is shifting instead to data-driven insight. Businesses are starting to collect data on their staff’s health so that they can tailor health offerings; harnessing data-driven insight allows HR leaders then to track the progress and return on investment of such offerings.
Consulting giant McKinsey & Company predict that employee wellbeing will be increasingly tied to financial performance in the use of ESG metrics by capital investors. Moreover, the Times Health Commission has recommended that “H” for health be added to existing the environmental, social and corporate governance (ESG) requirements for organisations. The landscape on employee health is changing. To improve the bottom line, HR leaders will have to take a more proactive approach. It’s time to get ahead of the curve and be prepared for changes in workplace mental health legislation and regulation
Closing remarks
The greatest asset to any business is its people and it’s time they received the proper support, so they can be healthier, happier and more productive. Not only is this a moral obligation for employers, but it makes financial sense - improving employee health really is a win-win; it is that simple.
Harnessing data-driven insight must form the baseline of HR leaders’ effort to improve employee productivity. As reported in the Times, by measuring and monitoring employees’ health, businesses can personalise the wellness initiatives they offer to their employees, in turn boosting productivity and revenue.
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