Employee wellbeing - why is it so important?

A recent study by CMI found that more than half of managers (56%) believed that their teams’ mental health had suffered as a result of the pandemic.

Whilst the benefits of employee wellbeing were clear to some before COVID-19, the changes and upheaval or the pandemic has meant that support for employee wellbeing is no longer considered a nice-to-have employee benefit, but becoming increasingly placed at the heart of an organisation’s People strategy.

In fact, our recent Future of People Management survey found that 90% of HR Managers agreed that the mental health of employees had become a key consideration for their organisations following the pandemic.

However, work-related ill-health – stress, burnout, anxiety and depression - is on the rise and is a leading cause of sickness and absenteeism. In fact, almost two-thirds of people experiencing mental ill-health during the pandemic attributed their work-life as being at least partly responsible.

It’s therefore clear that some organisations are struggling to keep up with the growing requirement for wellbeing support for their workforce, with senior leadership support and investment likely being a challenge for many.

But the link between employee wellbeing and performance is becoming clearer. Happy and healthy employees are more motivated, engaged and productive. On the other hand, studies tell us that poor employee wellbeing can have a detrimental impact on these things. One study found that 42% of workers felt that workplace stress, anxiety, or depression caused their productivity to plummet and 40% said it leads to poor decision making.

Businesses continue to invest significantly to protect the physical safety of the workforce, but there is clearly still a long way to go with our response and investment to support their mental health and wellbeing.

What is employee wellbeing?

Employee wellbeing is about more than simply supporting individuals who are struggling. Workplace wellbeing is about developing a culture that allows employees to thrive.

This all starts with an employee wellbeing strategy which is likely to vary based on company size, industry and budget. Progressive organisations are even introducing independent wellbeing strategies which include the strands of physical, mental and financial wellbeing support for employees.

Either way, employee wellbeing strategies will likely include tactical ways to provide support in the short-term, preventative measures to avoid things like burnout, absenteeism and other work-related ill health, as well as a long-term view of how to embed a wellbeing culture into the every day running of your organisation.

Crucially, for a wellbeing strategy to be successfully embedded, it needs to have involvement from senior management, both in setting the strategy and by living and communicating it themselves.

Employee wellbeing is not simply a HR initiative. Ultimate responsibility for the overall health and engagement of employees at work sits with senior management, but yet it can often be difficult to persuade management to buy into the benefits of employee wellbeing. However, without appropriate support and investment, employee wellbeing can become that infamous ‘tick-box’ task that renders it meaningless.

Why is employee wellbeing important?

In short, many of us spend the majority of our waking time at work. The way we feel about our work impacts our personal lives and vice versa. If we’re struggling in our home life, this undoubtedly affects our ability to contribute effectively in the workplace.

Offering a range of meaningful (this is important) benefits to support the wellbeing of employees can have many tangible and intangible benefits for organisations, and risks for those that overlook their most valuable asset – their people.

It’s likely that leaders in some organisations don’t feel they have a problem with poor employee wellbeing or lack of engagement and therefore see no need to invest. This may be the case, but if you’re not asking employees regularly for their thoughts – through employee feedback surveys for example – how do you really know?

If employees don’t feel fully supported by a working culture that encourages them to come forward when they’re struggling, they’re more likely to hide it from their employer and less likely to take time off when they need to.

For that reason, low absence rates are not an effective indicator when used in isolation to measure employee wellbeing. In fact, lower absence rates could be a sign of presenteeism, where employees continue to be ‘present’ at work when ill but as a result, can often be disengaged, unproductive and more likely to make mistakes. Whilst this could be affected by mental ill-health that is not work-related, it can also point to a wider cultural problem for organisations around work-related stress and burnout and a lack of support for employee wellbeing.

Other important aspects of employee wellbeing to consider as part of developing a wellbeing strategy include provisions for financial wellbeing, how you ensure employees feel recognised, rewarded and valued for their work, and ways to support engagement: Is their work meaningful to them and to your organisation, and do they understand how what they do contributes towards wider organisational goals?

What are the benefits of supporting your employees’ wellbeing?

The benefits of improved employee wellbeing won’t just be seen in the less tangible benefit of a happier and healthier workforce – though that should be a moral obligation for employers to strive to achieve in its own right. The benefits will likely be seen in more tangible ways for organisations conducive with measuring the impact of HR investment too, such as:

  • Increased employee productivity: employees that are healthy and well are going to be more motivated and efficient than those that are stressed, burnt out or just don’t feel valued.
  • Improved engagement: A Gallup study found that when employees are engaged, burnout decreases, and productivity and wellbeing increase.

  • Better retention: Employers who create a positive wellbeing culture can expect to see 11% lower staff turnover than those that do little to prioritise employee wellbeing. Demonstrating that people who feel genuinely cared about are going to be more loyal to their organisation. Those suffering from stress and burnout without proper support from their employer are far more likely to look for a new job. In fact, 95% of HR leaders agree that burnout impacts employee retention.

  • Reduction in sick leave, absenteeism and presenteeism: studies found that lack of support for employee wellbeing costs UK employers £7bn in absence costs and up to £29bn in presenteeism costs each year. With adjustments made to support an employee back to work when they’re ill, organisations are likely to see lower levels of absenteeism and associated costs in temporary staff or outsourcing work. In addition, people are less likely to be habitually off work from work related ill-health such as stress if they feel their issues are heard and understood and measures taken to support them. Whilst plodding on at work whilst ill may once have been seen as a sign of your commitment to your job, those days are gone. Employees that take time off when ill – and are encouraged to do so by their employers – are more likely to get better faster, and be more motivated and productive when they return.

  • Avoiding crisis point: 75% of organisations in one survey agreed that providing early intervention strategies for employee wellbeing can avoid problems such as stress, burn out and disengagement from occurring in the first place, and stop them from escalating and has an overall positive impact on their people’s health.
  • Enhanced employer brand and reputation: organisations that put wellbeing at the heart of their culture will be attracting the best talent. With Millennials now dominating the workforce, this generation expects to work in environments that provide much more holistic employee wellbeing benefits. Building employee wellbeing into the employer brand can play a major part in successful recruitment strategies.

Overall, the statistics speak for themselves on the return on investment. Pre-emptive strategies have been found to achieve higher returns than those brought in later when a problem with poor wellbeing has been identified. For every £1 spent on supporting employees’ wellbeing, Deloitte research found that employers would get £5 back on their investment in reductions in presenteeism, absenteeism and staff turnover.

A combination of wellbeing awareness training, employee recognition tools, talent management, career development and absence management software can all provide HR managers with the tools they need to support and report on employee wellbeing challenges, and measure success from their investment.

Take a look at our latest report ‘Sustainable workplace wellbeing strategies: the key to growth’ to help you identify gaps in your organisation, build your case for investment and prioritise where to focus your time, effort and budget.

Sustainable workplace wellbeing strategies: the key to growth

Our latest report uncovers some key findings related to workplace mental health and wellbeing to help you identify gaps in your organisation, build your case for investment and prioritise where to focus your time, effort and budget.
Find out more