Is your company missing out on 76% growth of it’s value?

In the UK, as employment law is being changed again with a further tightening of the responsibilities, and the associated punitive powers with the potential to cause company disruption, it is easy to think that businesses are being beaten into looking after their people.

Yet, the one thing I know for sure from decades of business transformations, that is “keeping the business out of jail” is only one of the key reasons to change.

The other two, how to make money and how to save money, if you can find these, then you can turn what could be perceived as a negative cost to the organisation to an advantage.

So beyond being a caring and responsible member of the human race, what other reasons can there be?

Let’s look at how to make money.

It is well known and accepted that the most valuable asset in businesses is it’s people. In fact, some firms shout about how great their people are. Yet with this, then why do they experience so many of their great people looking to leave the business or underperform? How can you improve the performance and the lives of those your business, the one it states it holds most valuable?

After a couple of recent conversations in businesses that will remain nameless with companies in insurance, solicitors, IT and healthcare, it is clear that for some, possibly many, the reality is that their employees felt like a number. Many are not moving from their desks and drowning in a swathe of demands, deadlines and duties while still within their written roles and responsibilities, though outside of what is capable of being achieved within the time allotted, resources provided and support given. The result is they feel overworked, overwhelmed and overweight, with little hope that things will change.

One answer may lie in an article published in the Journal of Occupational and Environmental Medicine by Fabuius, R., Thayer, RD, Konicki, D. in September 2013 entitled “The Link Between Workforce Health and Safety and the Health of the Bottom Line” tracking the S&P 500 performance of companies against whether they had well-being as a focus or not.

Now, this isn’t well-being as in incense and candles, nor is it a token insurance policy or other tick box exercise. This is looking at those who are “Engaging in a comprehensive effort to promote wellness, reduce the health risks of a workforce, and mitigate the complications of chronic illness within these populations can produce remarkable effects on health care costs, productivity, and performance.”

The results are staggering: the financial advantage of workplace well-being on stock values for a portfolio of companies that received high scores in a corporate health and wellness self-assessment appreciated by 235% compared with the S&P 500 Index appreciation of 159% over the same 6-year period. So what could your business do with an additional 76% of value?

According to Forbes the pressure to hit financial numbers may tempt leaders of many businesses to focus only on the balance sheet and ignore what turns out to be a quantifiable and manageable lever that is proven to affect the bottom line.

While the study above is from 2013, there are many more recent studies showing healthier employees are also likely to have higher job satisfaction, with the top five metrics that influence job satisfaction being mental health metrics, which in turn, has been shown to result in improved business performance. These can be seen in reports and studies published by the CBI (Confederation of British Industry), ONS (Government Office of National Statistics), CIPD (Chartered Institute of Personal and Development), and many more.

What about saving money?  

Employee health directly impacts the frequency and duration of sickness. In 2022, approximately 185.6 million working days were lost due to sickness, injury or employee health issues in the UK. When employees are in good health, they are less likely to experience frequent illnesses, resulting in fewer sick days. This, in turn, contributes to maintaining productivity levels and minimising the costs associated with sick leave. This is significant given the estimation that 2 to 16% of an employer’s annual salary bill is attributable to employee absence as presented by the Office of National Statistics.

A German Study published by John Wiley & Sons and the National Library of Medicine found a positive link between job satisfaction (and changes over time therein) and subjective health measures (and changes therein); that is, employees with higher or improved job satisfaction levels feel healthier and are more satisfied with their health.

The global management consultancy McKinsey has noted that many employers in the US view health benefits as an essential tool in their development. That research suggests that health insurance is viewed as a key consideration in whether employees join or stay with companies. However, this only deals with when people are ill and not how to keep them well or get even better.

Presenteeism refers to employees being physically present at work but not fully engaged or productive due to health issues. Up to 80% of British employees say they continue to work when unwell. Poor employee health can lead to increased presenteeism, where employees may struggle to perform at their best due to illness, chronic conditions or mental health challenges. This can significantly impact overall productivity and performance. It also has financial implications, with presenteeism as a result of poor mental health alone costing the UK economy £15.1 billion annually, according to a study by the Chartered Institute of Personal and Development.

To wrap this up, while we all appreciate that change is hard, change is costly, change is risky, and change is messy, though most importantly, change is inevitable.

Whether you choose to have change done to you and your organisation as you keep applying only what the law requires, keeping you out of jail. A direct cost to your business and missing out on additional benefits.

Or you choose to embrace change, take advantage of the benefits of creating a culture of wellness, health, and well-being, at the heart of your firm and support your team to become even happier, healthier, and achieve more in business and in life. And they will reward you and your organisation with more innovation, greater productivity, lower sick days and improved employee retention.

Written by Martin Sharp.

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