We often hear Senior Management comment at company gatherings, that their greatest asset is their people. This to me sometimes feels a hollow statement as key financials – sales, margin, throughput, operational costs and bottom line – always get more attention in the drive to maximise corporate performance.
Living, breathing, individual people are referred to as “human resources” – a commodity that can be easily manipulated or replaced. In Company mission statements they often commit to provide a friendly, healthy work environment, respecting diversity and encouraging innovation. They expect commitment, loyalty and trust from their employees and in turn employees commit to abide within the organisation’s rules for safety, security and health and to use their skills and talent as required by the company.
The case for wellbeing as ‘business critical’
As long ago as 2009, Janice Haddon of Morgan Redwood, the business consultancy and coaching company, highlighted the clear connection between staff wellbeing and business performance. They surveyed over 100 of the UK’s most dynamic small, medium and large businesses in a wide variety of sectors. Their findings indicated that staff wellbeing is inextricably linked to corporate performance yet staff morale scored an average of six out of 10. They found that well-led, successful, team orientated businesses that invest in their people attract good talent and commitment and can earn 20 percent more from healthy staff.
In asset-value terms, while customer base and company reputation are the top two rated assets. Employees came third, delivering between £19,000 and £40,000 net per head per annum, suggesting they should merit significant attention to their mental and physical wellbeing.
Improving productivity and performance, and up-skilling the workforce figured high on the surveyed organisations’ agendas, along with reducing absence. The significant cost of this, featuring lower down these business concerns.
I would add that these views were taken from head of HR or board director equivalent which is totally relevant as they are responsible, with the rest of the senior management, for the annual balance sheet. However it would have been interesting to read the opinion of trade union reps and arbitrary staff at varying levels.
Between 2009 and 2014 the attention of business directors has been on reducing staff costs through redundancies, freezing pay and reducing bonuses but the tide is now turning towards retaining and incentivising
employees and attracting new talent, as the UK returns to growth.
In 2015 the living, breathing, individual people mentioned above, are beginning to appreciate the importance of attitudes, facilities and opportunities to ensure staff wellbeing is taken as seriously as fair, competitive salaries. Wellbeing (feeling physically and mentally healthy) is at the opposite end of the spectrum to stress (significant ill health) and it is obvious that fit staff will be more productive, engaged, motivated and supportive than those who are unwell and present (presenteeism) or off sick.
In a survey by Unum and Financial Director Magazine in 2015, out of 250 senior financial professionals, staff retention was perceived to be the most pressing business concern. However much less consideration was given to managing employee health and the consequences of sickness. Given that sickness absence was valued in 2013 at £29 billion in the UK by Price Waterhouse Cooper, this seems an opportunity for a win/win outcome: encourage the uptake of mental and physical wellbeing initiatives and the expected outcome is an informed, healthy and happy on-site staff.
Who is responsible for the health of employees?
You just need to walk around Britain’s large cities on weekday mornings to notice the increase in cyclists, joggers and walkers, making their way to work and getting fitter in the process. Waiting for the 6.53 train to London, I recently noticed how many commuters are wearing trainers and jogging clothes, having their work clothes in a bag, with the obvious intent to take an active approach to getting to their workplace.
This indicates that some employees are taking significant responsibility for their wellbeing and this may be possible because their employer has provided showers to facilitate their health commitment. Exercise is renowned for releasing endorphins (feel good factor hormones) as well as increasing metabolic rate, thus maximising nutrition – a great way to start the day. While sitting in a well-known coffee establishment, I noticed many people opting for the healthy, alkaline option of porridge instead of the carb loaded croissant, again indicating a significant change towards healthier eating habits.
This brings me to the question: where should the responsibility for an employee’s wellbeing lie? This question was posed in the above mentioned survey and 57 percent of senior financial professionals indicated that the whole management team should be involved. As evidenced in the above paragraph, I believe as many individuals as possible should also be involved.
Self-responsibility is not always evident in Britain today. Many people look to others to provide the basic aspects of life – food, water, shelter, warmth – and even some of the next tier of needs – good health and safety. In the employment arena, it may help to have committed, enthusiastic individuals to become trained and accredited as ‘wellbeing champions’ to help build colleagues’ enthusiasm through a tailored programme covering basic self-assessment and awareness to well-tried and innovative coping strategies covering physical, mental and emotional aspects of wellbeing and ongoing good health. Such a programme can be self-generating as colleagues see each other benefitting physically, mentally and emotionally, and absence costs are reduced.
A wellbeing strategy is therefore no longer a ‘nice to have extra’ but is financially prudent.
Presenteeism is a recent descriptor of a situation where people who are slightly (and sometimes significantly) unwell and at work. It is common in conscientious workers and is also enhanced by absence management policies with fierce penalties for absence. Even people battling cancer have turned up for work to avoid a disciplinary hearing for their absence. Presenteeism has been valued at 1.5 to three times the cost of absence.
The current cost of absence
The CIPD and Simply Health’s recent 2014 report measures the average cost of absence in the public sector to be £914 per person per year. Government figures put the number of people employed in the public sector at 5.4 million. This means that absence in the public sector in 2014 cost around £5 billion.
In the same survey the CIPD and Simply Health indicated the cost in the private sector for absence was £520 per person per year. The estimate of private sector employees in the UK is 1.059 million. This means that absence in the Private Sector cost around £550 million in 2014.
When we add Presenteeism into the mix the costs are only going to get astronomically larger.
Start-ups and SMEs were not part of this survey but the cost of absence can be particularly crippling in these companies. As the demographics of the UK workforce changes, many people are now working for a longer period of time before they retire and all organisations are likely to see a greater level of sickness and absence if they don’t start addressing this issue now.
Forward-looking PLCs and public sector bodies will invest in health and wellbeing to tackle illness and absence before it starts to hit their bottom line. Have YOU bought in to wellbeing?
Ann McCracken will be chairing the Symposium Health @ Work Summit on June 11, 2015.