People and Change

Poor Workplace Wellbeing – a cost we cannot ignore

Patrick Gallen Patrick Gallen

With April being Stress Awareness Month, and with Mental Health Awareness week, only a few weeks away, it got me thinking.  What quantifiable data do we have on the impact of poor workplace wellbeing?  How does it impact productivity?  What is the business case for a more active approach to workplace wellbeing?

These issues have an impact on productivity.  Figures from the UK Centre for Mental Health show the cost of mental ill-health to all UK workplaces as being about £40 billion.  What does this mean at a micro level?  For every employee – not merely those unwell – we see a cost of between £1,205 and £1,560.

Looking at a break-down of factors, while mental wellbeing concerns cost UK employers £40 billion, absenteeism and employee turnover only account for about one fifth each.  Well over half is lost on presenteeism; or, being there when your productivity is low.  Indeed, employees are spending an average 2.5 weeks a year at work despite feeling unwell, such that they are ill for longer at work than they are off sick.  Nottingham Business School reported that employees are operating at an average of 84% full capacity, making a lost productivity cost to the employer of £4,058 per person per annum.

Returning to the Centre for Mental Health research, even at the lower end (£1,205), the cost per employee, of poor mental health, comfortably exceeds the investment companies make for all their Learning and Development initiatives (hovering a little above £1000 per employee in larger organisations).  Given that training in mental health awareness, stress management and resilience are very much in their infancy, we can expect that they account for a very small proportion of that £1000.

A report from London School of Economics added to the argument for investment in wellbeing. Over a two-year period, one company with 500 employees enacted a screening programme, followed by covering the cost of cognitive-behavioural therapy sessions.  They found a net gain of four times their investment, in improved health scores, and lowered absenteeism and presenteeism,

In another organisation of approximately 500 employees, instituted factors such as flexible working arrangements, career progression opportunities and stress audits, improved recognition of risk factors for poor mental health by line managers.  The cost of this multi­component intervention was estimated at £80 per employee per year; the annual return on investment was over 9 to 1.  The Lancet reported something very similar: research by the Australian Fire Service found that, for every £1 spent training managers in mental health awareness, they saw a return of almost £10.

Finally, a significant systematic literature review in the journal Occupational and Environmental Medicine a few years ago reviewed empirically successful interventions that improve psychological health and levels of sickness absence. Factors included training and organisational approaches to increase participation in decision-making and problem-solving, increase support and feedback; and improve communication. Does anything here sound costly?

There really is no economic argument against these investments.