Business Case Support
There are numerous resources which can support your business case for wellbeing. Normally we divide those into financial, legal and moral.
Health costs are typically the second largest people expense, after salary, in most organisations.
They are often under-appreciated because they comprise direct and indirect costs and are spread across many budgets. Indirect costs are typically more than double the direct costs and so should be a matter of concern for the c-suite. A value-based health strategy, emphasising prevention, can often prevent 20-30% of costs by helping healthy people stay healthy.
In the UK, the Deloitte report in 2020 showed an increase in annual costs to employers of sickness absence up to £45 billion. This is due mainly to a significant increase in presenteeism (working when unwell and being less productive).
“Are there any organisations in which the health and wellbeing of the workforce and productivity and service quality are not inextricably linked?” Dame Carol Black
There’s an indisputable link between employee well-being and low turnover. Replacing a lost employee costs between 33% and 150% of annual salary depending on skillset and seniority and impacts operations, hurts morale and makes companies less competitive as they lose experienced workers.
Psychological wellbeing was considered by Google Project Aristotle to be tied to the best performing teams – with improvements in Productivity, Customer satisfaction, Creativity and Innovation.
In the Deloitte report discussed above, Return on investment was shown to be very high for training. Deloitte now finds that on average employers obtain a return of £5 for every £1 (5:2:1) invested, up from £4 for every £1 spent in 2017. On average, organisation-wide culture change and awareness raising can provide a ROI of £6 for every £1 invested whilst proactive training specifically provides average ROI of £5 for every £1 invested.
The business benefits of resilience
Source: MeQuilibrium (2015). The science behind resilience: A study of psychometric measures & business outcomes
The Legal Case
Health and safety law: Whilst the law differs from country to country in this area, many have a legal duty to protect from stress in the way that the UK HSE requires
Stress risk assessment. “Employers have a legal duty to protect employees from stress at work by doing a risk assessment and acting on it. If you have fewer than five employees you don’t have to write anything down. … If you have five or more employees, you are required by law to write the risk assessment down.” HSE
This is not an individual stress risk assessment as some organisations interpret it to be, but one which centres around the risk factors within the organisation.
HR law: In almost every country there is an equivalent of the Equalities Act which means that employers need to be mindful of disability. Training your managers in understanding best practice in managing conversations about wellbeing, especially when intermingled with performance conversations is critical. We have worked in countries all over the world and understand for example the distinction between those which use the Company Doctor and those which do not.
The Moral Case
With employees a key stakeholder in the business most employers would rather they were happy and healthy. Often a link to the company values can be made here.
Conversely with suicide being such a big killer of men particularly, the impact on staff morale of a suicide in the company is significant.