Isn’t an individual’s wellbeing their own responsibility? What does this have to do with my business?
Employee wellbeing may feel like a buzz word or fade from the new generation, but could they actually be onto something from a business perspective?
Research into caring for your staff supports this, so let’s dive into what we know and then where you can start!
What’s the connection between staff wellbeing and productivity?
According to Mahi Haumaru Aotearoa Work Safe’s Workforce Segmentation and Insight surveys (2020, 2021, and 2023), approximately 30% of workers reported work-related mental health or wellbeing issues, and 60% reported work-related stress. This number suggests a significant part of our workforce is experiencing stress, anxiety, low mood and other psychosocial difficulties related to their work. So, how exactly could this be impacting your business?
Poor mental health is associated with lost productivity via presenteeism (reduced productivity when an employee has come to work) and absenteeism (time away from work), costing organisations significantly. Incidence of Accepted Workers’ Compensation Claims for Mental Stress in Australia (published by Safe Work Australia) noted a 2007 study that calculated the total cost of work-related “mental stress to the Australian economy was $14.81 billion; the direct cost to employers alone in stress-related presenteeism and absenteeism was $10.11 billion”. Closer to home, Mentally Healthy Work in Aotearoa New Zealand published a loss of 1.85 billion to New Zealand’s economy from absenteeism alone. The estimate of lost productivity related to presenteeism is much higher, with some suggesting it may exceed 40 billion per year. From this, it is pretty clear that mental health and stress may be costing our businesses significantly.
Is it all about reducing costs?
The absence of mental health and stress does not equate to wellbeing. So, while we talked about the association between lost productivity and mental health, and its costs, this is only one side of the picture. There is good news too!
Research shows that employees that are happy, accepted and satisfied with their work not only improve in performance and productivity, but have other benefits too for our organisations. Employees reporting a sense of wellbeing are likely to share positive and authentic stories about the organisation, promoting overall team culture and organisational reputation. They are also more likely to have positive interactions with customers, acting as a bridge between the organisation and the customer, leading to better engagement with customer needs. Furthermore, these employees are more likely to be proactive in their professional development and communicate their ideas to improve the company.
All these factors reduce staff turnover, leading to fewer headaches and costs associated with recruitment and onboarding of new staff. Moreover, reducing staff turnover helps maintain staff morale and reduces the potential pressure and strain on staff when team members leave.
What now?
The good news is that research supports the return on investment (ROI) on staff wellbeing programmes, meaning that spending money on improving your team’s wellbeing will pay you back. According to the New Zealand Institute of Economic Research’s 2021 report, there is an estimated 3 to 1 ROI ratio for EAP programmes and an average of 5 to 1 for organisational approaches. That means for every dollar invested into staff wellbeing, they are seeing a return of 3-5 dollars on average.
Promoting staff wellbeing can happen at the individual, team and organisational levels. Factors that appear to help improve staff wellbeing at a team level include supporting workplace friendships, providing employees the opportunity to learn from their supervisors, being able to do tasks as a team, and improving leadership quality and team norms (i.e. agreed expectations of how the team will work together).
Based on this, a few next steps might be:
- Build team relationships: See how the team interacts with one another and spend time improving team relationships so that the work environment is comfortable and collaborative.
- Grow internal workplace support: Create and provide learning opportunities between team members, celebrating your team’s strengths and allowing for team collaboration.
- Create a shared Kaupapa: See if your team has clearly defined ways of communicating, collaborating and behaving in their work. If there isn’t, spend some time discussing these so that you reduce misunderstandings, prevent conflict and foster cohesion and accountability.
When looking at the organisational level, the key factors affecting staff wellbeing included Human Resource management, workplace flexibility and organisational climate. When employees perceive their organisation supports them, is flexible to their needs and will protect them, it has a positive impact on their wellbeing.
Summing up: Focusing on employee’s wellbeing offsets costs like turnover, sick leave, and lost productivity, while improving your reputation, as well as improving innovation, productivity and customer experience. So, it shouldn’t be surprising that investing in wellbeing has a good return on investment. This means caring and supporting the wellbeing of your employees is good for your business in more ways than one.
By Dr Tamara Bejakovich
