How wellbeing helps the bottom line as well as the workforce

Calculating the balance sheet benefit of a wellbeing programme is one of the most challenging equations in business today. The concept bristles with commercial potential but confounds accounting techniques and is loaded with interpretation.

There are big picture numbers - UK companies lose £26 billion in productivity with 9.9 million working days lost due to poor mental health and a further £15.1 billion from the drain of ‘presenteeism’, according to research by the Centre for Mental Health and the Health and Safety Executive.

But applying that to a company or employee is harder to quantify. An employee’s psychology is crucial to their performance yet cannot be readily measured and plugged into a spreadsheet.

However, wellbeing is becoming a core component of a company’s structure and part of their offer to attract the best recruits. Given that acquiring and retaining talent is a key strategic objective in most progressive firms, this provides a start to the measurement process as wellbeing programs can reduce the direct and indirect costs caused when staff leave.

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There’s also the potential to reduce days lost to both physical and mental health issues. The Chartered Institute of Personnel and Development (CIPD), the professional body for Human Resources, reports that 137 million work days are lost annually in the UK due to mental health issues, including stress, anxiety and burnout in the UK.

Its annual conference, in Manchester on November 9 and 10, has just held sessions on how to embed wellbeing into a business and put a value on their outcomes.

Rachel Suff, CIPD senior employee relations adviser

Rachel Suff of CIPD

South Liverpool Homes, a housing association managing around 3,700 homes, which has taken the Sunday Times Best Not-for-Profit Organisation to Work For title for the last four years, introduced its current wellbeing project in 2013 with its chief executive and head of HR playing leading roles. Within a year, sickness rates had decreased by 54 per cent resulting in a £25,000 for that year with the positive impact continuing over subsequent years while customer satisfaction rose to 90 per cent.

But only 17 per cent of companies evaluate their wellbeing programmes, according to CIPD research and its senior employee relations adviser Rachel Suff comments: “Saving £25,000 over a seven-month period gave South Liverpool Homes the business case for future investment. But an evaluation programme does not have to be too sophisticated and drill down into every pound as you can build a strong narrative and show that is effective by the way the workforce performs.

A lack of evaluation doesn’t necessarily put a scheme at risk

“A lack of evaluation doesn’t necessarily put a scheme at risk but it is so important to build a business case for continued investment and to direct the money where it counts and know it has an impact.”

Monitoring selected key performance indicators, ranging from soft metrics such as employee feedback to absence rates, creates structure, she adds.

The Employee Experience Index, a workplace measuring tool devised by IBM and Globoforce, recorded that employees with more positive experiences at work were ‘much more likely to report significantly higher levels of discretionary effort.”

A prime example of the potential benefit emerged in a Health and Safety Executive analysis of Somerset County Council’s £510,000 stress reduction programme which saved the authority £1.9 million over three years.

Research by consultants PwC found that 83 per cent of employees felt their wellbeing influenced their productivity and 33 per cent said poor wellbeing was a factor in leaving a job.

“Investment in wellbeing schemes need not cost a lot of money but they do require bravery, commitment and good employee communications,” says Philip Smith, director in the people and organization practice at PwC, which has created mental health champions at every grade across its 20,000 strong workforce.

There are real gains to be made but it requires bravery from management and staff

“Companies that make that investment have better productivity per employee, better return for shareholders and the consequence of that is a better overall return on the share price.

“There are real gains to be made but it requires bravery from management and staff to make that step but, if you do it and measure it, you will start to see real returns.”

CA Technologies, the multinational software firm with a market value of around £10 billion, is convinced that its employee wellbeing schemes are worth the effort and investment. It launched a “Wellbeing at CA” programme in July that includes a four-week programme designed to improve the mental resilience of all employees.

“It is not just a moral imperative, it’s a business one too,” reckons Marco Comastri, EMEA general manager.