Posted: Tue 11th Dec 2018
Today we are delighted to launch the new Business Health Hub in partnership with powered by Enterprise Nation's health and wellbeing partner Equipsme.
Companies that look after the health and wellbeing of their staff perform better and the new Hub provides you with practical advice on how to do it. To launch the new service, Equipsme founder Matthew Reed looks at why you need a wellbeing policy.
The business case for taking health and wellbeing seriously is becoming clear as political pressure rises
In early November, secretary of state for health Matt Hancock unveiled Prevention is better than cure, a new public health strategy that calls on employers to take a more prominent, proactive role in the wellbeing of their staff.
Last year, the government also published Thriving at Work, a review which explores the link between work and mental health.
Both reports deliver a similar message: employers have a crucial role to play in individuals' wellbeing, by designing good quality, healthy work practices and supporting employees' physical and mental health in the workplace.
But political imperative isn't the only reason for employers to take the subject seriously. Embedding staff wellbeing in business culture also reduces costs and has quantifiable benefits for employers of all sizes.
The cost of poor wellbeing
Poor staff wellbeing has several quantifiable costs to businesses:
According to the CBI, health-related absence costs SMEs £782 per person per year. Minor illnesses, such as colds are the biggest cause, totalling 34.5% of the working hours lost to illness in 2017, with a further 17.7% due to musculoskeletal (muscles, bones, and joints) issues, such as back problems, and 7.6% resulting from stress, depression or anxiety.
Working while unwell also has a cost to business in terms of lowered productivity and performance. The Chartered Institute of Personnel and Development (CIPD) found that 88% of the businesses in its Health and Wellbeing at Work 2018 survey said that they had been aware of presenteeism in the last 12 months, and research from Nottingham Trent University showed that productivity loss from presenteeism could cost businesses even more than the time lost through sickness absence5.
Mental health and stress
Research by mental health charity Mind found that 48% of employees have experienced a mental health problem in their current job and figures from Investors in People show that as many as 80% of UK workers say they are stressed.
Employers have noticed the problem too: according to the CIPD, 37% of organisations say that they have seen an increase in workforce stress over the last 12 months.
However, businesses are still finding it hard to deliver effective support for employees who are struggling and suffer financially as a result. Mind found that 14% of workers said that they had resigned and 42% had considered resigning as a result of job-related stress.
Deloitte has quantified the cost to business at between £33bn and £42bn a year, which it defines as: absence costs of around £8bn, presenteeism costs of between £17bn and £26bn, and turnover costs of a further £8bn8.
The benefits of looking after employees' health
Counting the cost to business of not investing in employee health is only half of the story. The benefits are also quantifiable.
According to the CIPD's report, 44% of employers said that investing in health benefits improved employee morale and engagement. That, in turn, can lead to better productivity and drive staff retention. Deloitte also estimates that the return on investment from effective employer involvement in supporting good mental health can be as high as 4:1.
There is also evidence that employee satisfaction and wellbeing are linked to business growth.
Alex Edmans, professor of finance at London Business School, explored the relationship between employee satisfaction and share price for US-based companies named in the annual 100 Best Companies to Work For listing.
He found that businesses with high employee wellbeing and engagement produced returns that were 2.3 to 3.8% per year higher than other businesses in the same sectors over a 28-year period. That equates to between 89% to 184% better compound performance.
In the past, 'employee wellbeing' might have been hard-to-quantify and nice-to-have. But there is now a body of evidence that shows taking care of staff health really does make a difference to business efficiency.
Prevention is better than cure strongly hints at a future where the government will apply more pressure to businesses to support their employees' wellbeing.
But the business case for helping employees to stay well and supporting their return to work should they fall ill - is already clear. The cost of doing nothing far outweighs the benefit of taking care of your staff.