Last reviewed 28 September 2016
Wellbeing programmes at work such as those to encourage physical activity or healthier eating among staff, can be difficult to justify, particularly in challenging economic climates. Vicky Powell examines the returns on investment in workplace wellbeing programmes, looking at the evidence of such initiatives in terms of their impacts on organisations and employees.
Wellbeing — a multifaceted view
Wellbeing at work is all about promoting healthier lifestyle choices among workers. These initiatives can take many forms, from encouraging greater levels of activity in employees, to providing healthier food in canteens and vending machines, or running smoking cessation programmes.
However, in comparison to the control of fundamental, company-specific workplace health hazards such as asbestos, silica and noise at work, the concept of wellbeing can seem rather insubstantial — even frivolous in comparison — and difficult to justify, particularly in challenging economic climates.
Definitions of wellbeing can vary and individual company programmes will tend to focus on key areas identified by management as being associated with the greatest corporate costs and hence potential benefits. In one company, the key focus might be mental wellbeing and stress management whereas another organisation’s wellbeing programme might emphasise physical wellbeing such as musculoskeletal disorders.
Wellbeing initiatives do tend to be multifaceted and the Chartered Institute of Personnel and Development (CIPD) defines wellbeing simply as “creating an environment to promote a state of contentment which allows employees to flourish and achieve their full potential for the benefit of themselves and their organisation”.
The costs of poor worker health
Statistically, poor health among the working-age population costs Britain dearly. Britain ranks worst in Europe for obesity, is one of the lowest ranked for sexually transmitted infections, and has a relatively large population of drug users, smokers and those whose health is being harmed by alcohol consumption. Furthermore, more than one in three adults suffer a long-standing illness, with over 70% of these caused by musculoskeletal disorders, circulatory diseases and mental ill health.
In 2013, 131 million working days, equivalent to 4.4 days per worker, were lost to sickness absence. While stress, anxiety and depression accounted for 15 million lost days, musculoskeletal problems such as neck and back problems are the cause of more than twice as many: 31 million lost days.
In financial terms, the CIPD has estimated that sickness absence can cost businesses an average of £609 per employee each year. To put this into perspective, for a 200-person organisation the cost of absence could be more than £120,000 each year.
On a macro-scale, considering the costs of lost productivity and output, time spent on sickness absence management and healthcare in Britain is estimated to cost the economy an estimated £15 billion per year.
Looking at specific issues such as mental wellbeing, obesity and smoking, the National Institute for Health and Care Excellence (NICE) estimates that:
for an organisation with 1000 employees, the annual cost of mental ill health is estimated to be more than £835,000, yet identifying problems early — or preventing them in the first place — could result in cost savings of 30%, equivalent to cost savings of more than £250,000 per year
with some 26% of adults in England being obese and obese workers on average taking four extra sick days per year, it is estimated that in an organisation of 1000 employees, this equates to more than £126,000 a year in lost productivity
on average, a person who smokes will have 33 more hours off sick per year than a non-smoker and for an organisation of 1000, in which 25% of workers smoke, this absence equates to a loss of more than £128,000 a year.
Costs and benefits at company level
The costs and benefits of wellbeing programmes at work are neatly illustrated by looking at the figures of two companies, one large and one small, recently recognised in the 2016 Bupa Wellbeing at Work Awards, a category within the Responsible Business Awards 2016, run by Business in the Community (BITC), one of Prince Charles’s charities.
North Star Housing Group
The winner of the Bupa Wellbeing Award in the small company category was North Star Housing, which manages and owns more than 3500 properties across Teesside, Teesdale, North Yorkshire, County Durham and South Tyneside.
The background to North Star’s wellbeing programme was a survey conducted in 2011, that showed low employee engagement levels, high staff turnover, increasing levels of absenteeism and stress accounting for 30% of absence (which rose to 38% in 2012).
The company made the link between employee wellbeing, engagement and how the organisation was run, and found that staff needed to feel more involved with running the company. The company was restructured, with wellbeing positioned as key to developing strong trust, engagement and performance in every aspect of work. For example, staff are regularly asked, “If you were CEO for the day what would you change?”
Since the start of the programme, staff engagement levels have risen to around 90% and absence rates have dropped from 12.22% to 3.42%. Associated costs of absence have fallen by £70,000 over four years. North Star Housing Group has increased its business surplus by 83% and used it to invest an extra £500,000 into their communities over 2 years.
Similar success has been seen in the case of Unipart, a multinational logistics, supply chain, manufacturing and consultancy company headquartered in Cowley, Oxfordshire, which won the large company category in the 2016 Bupa Wellbeing at Work Awards.
The company’s new strategic wellbeing programme, Unipart Workwell, encourages and supports employees, and line managers in particular, to take personal responsibility for their wellbeing and to recognise how their actions impact on others around them. The programme invests in staff capability to promote wellbeing, for example by starting to roll out mental health awareness training, starting with a pilot for over 100 HR professionals and managers.
More than 2000 individuals have participated in wellbeing events, including:
gym and fitness sessions
expert presentations about heart health and cancer risks
managing stress workshops
stop smoking clinics.
From these events, some 10 individuals have been referred to their GP due to very high blood pressure of which they were previously unaware.
Unipart Workwell has helped to reduce absence levels to the equivalent of having an extra 16.5 people in the business and made an estimated saving of £330,000.
Is wellbeing worth it?
Wellbeing experts at Aon warn that few employers in the UK fully understand the impact of their employee health issues. For example, a recent Aon health survey concluded UK employers’ actions are out of line with their actual concerns, with 63% considering their top issue to be stress management and mental health issues, but only 41% having an emotional or psychological programme in place.
Matthew Lawrence, Chief Broking Officer at Aon Employee Benefits, offers the following warning: “Unfortunately, poorly thought-out strategies waste expenditure if they aren’t underpinned by data. Using data and analytics is imperative as this informs the employer about the overall health of their employee population.”
The answer to the question, “Is wellbeing worth it?” is therefore yes — but with a number of caveats.
Focusing on employee wellbeing is valuable, but only as part of a wider, effective work-related health company policy. Clearly, it would be nonsensical to introduce smoking cessation initiatives where the exposure of employees to fundamental, company-specific health hazards such as silica or asbestos is uncontrolled, for example.
The evidence is that wellbeing programmes can achieve solid financial returns but only if they are carefully planned and based on specific data and analytics, as well as targeted towards the individual company’s strengths, weaknesses and risk profile.