How Employee Wellbeing Drives Profits

Traditionally, employers have regarded employee wellbeing and workplace wellness as a way to save money on healthcare costs, or just a ‘nice to have’ HR benefit with no noticeable ROI. And yes, looking at it from this perspective is pretty uninspiring. But times have changed and we need to keep up.

Employee wellbeing drives profits - woman standing next to a graph

The real, ROI boosting, opportunity comes in when employers begin to look at employee health and wellness as a powerful, strategic business investment. Helping employees to feel well and make their lives better, forms part of a broader business strategy that takes care of your most important business asset – your people. Employee retention issues, costly turnover, low productivity levels, and high absenteeism are inevitable outcomes for a company full of employees who are just not engaged. You see where I’m going with this, right?

Imagine the massive savings when these are addressed at the root. Can you see the dollar signs? Employee engagement is everything. And employee wellness and engagement are best buds.

Man and woman high-fiving.

Happy, healthy people are more productive.

It’s not rocket science. Just think about what works for you. If you feel good about yourself, feel well and energised, feel cared for and appreciated, feel inspired and motivated, you’re more likely to have the energy and inspiration to bring the best out in yourself and apply that to whatever you’re doing. 

So it’s logical. Without even looking at actual numbers and data, we already know that providing a culture of wellness is going to boost engagement and productivity. But this is not just about making people happy. In the modern workplace, employees need to see employee wellbeing as a vital tool for business success.

happy employees laughing

So, what do the stats say?

In Gallup’s research on approaching employee engagement as a business strategy, we find that:

“highly engaged business units realize a 41% reduction in absenteeism and a 17% increase in productivity. Engaged workers also are more likely to stay with their employers. In high-turnover organizations, highly engaged business units achieve 24% less turnover. In low-turnover organizations, the gains are even more dramatic: Highly engaged business units achieve 59% less turnover. High-turnover organizations are those with more than 40% annualized turnover, and low-turnover organizations are those with 40% or lower annualized turnover.”

And…

“ Employees who are engaged consistently show up to work and have a greater commitment to quality and safety. Understandably, these employees also help their organizations improve customer relationships and obtain impressive organic growth. Highly engaged business units achieve a 10% increase in customer ratings and a 20% increase in sales.” 

Investing in employee wellbeing & engagement strategies drives ROI. Fact.

Engaged, happy, thriving employees want to stick around. And by looking at the substantial savings gained when reducing attrition rates alone, we can already see how giving people a reason to stay really pays off.

ATTRITION COSTS = ANNUAL SALARY OF EMPLOYEES THAT HAVE LEFT

  • Loss of productivity & effect on the department
  • Lost knowledge & contacts
  • Staff replacement procedures
  • Temporary staff costs
  • Recruitment & referral fees
  • Training new recruits
  • Decrease in productivity
  • Additional admin

If your current attrition rate is 30%

And the total annual cost of your salaries is £5,000,000

Your attrition costs would be £1,500,000 (30% of our total annual salary cost)

BUT…

By decreasing your current attrition rate to 25%

And the total annual cost of your salaries is £5,000,000 

Your attrition costs would be reduced to £1,250,000 (25% of your total annual salary cost)

RESULT!

Your 5% decrease in attrition rate = £250,000 saving that goes straight to your bottom line.

And more than simply decreasing attrition rates, an employee wellbeing and engagement strategy can help to decrease absenteeism, decrease the disruption to colleagues, have a positive impact on customer service, and increase overall creativity and productivity levels. Win. 

Happy employees talking and laughing

What are employees saying about workplace wellness?

Let’s hear it from the people. In The Consumer Health Mindset Report, consumers’ advice for employers is to:

“offer more tools to help me determine my personal goals and how to achieve them and track my progress. Provide more programs to encourage healthy activities or wellness awareness. Allow employees to attend during work hours so they won’t feel that they’re skipping out on their job.”

According to this report, a strong culture of health and wellness in the workplace shows clear improvements in participation, engagement, and overall health for employees. 

  • In companies with a strong health culture, 72% of employees had an annual physical in the last year, where only 64% of employees in companies with a weak health culture did.
  • In companies with a strong health culture, 62% of employees exercise at least 3 days a week, where only 49% of employees in companies with a weak health culture do.
  • In companies with a strong health culture, 69% of employees rate their health as very good or excellent, where only 51% of employees in companies with a weak health culture did.
  • In companies with a strong health culture, 98% of employees are satisfied with the health plan, where only 76% of employees in companies with a weak health culture are. 
“In a strong culture of health, I am more likely to do what’s good for me”

Meditating

Workplace wellness works.

Ok, so the stats prove a strong point on paper. But let’s look at businesses that are actually doing it. These companies are ahead of the workplace wellness pack and already seeing impressive ROI results: 

SAP logo

 

In a case study on Forbes.com, multi-national enterprise software company, SAP (Germany), shows how investing in employee wellbeing delivers impressive bottom line results.

“We don’t pretend that employee well-being is solely about making employees happier and healthier,” says Dr. Natalie Lotzmann, SAP’s Global Head of Health & Well-Being Management. “It helps SAP become a more successful company. We ensure this by linking our workplace culture and investments in employee well-being to SAP’s business success and profit.”

The study shows that SAP saw an increase in its Business Health Culture Index. It went from 69% in 2013 to 78% in 2018 And with each 1% change in the Index, it delivered a $90-$100 Million (EU) impact on their operating profit.

“The physical and mental wellness of our team is paramount,” said recently departed CEO Bill McDermott. “If our people don’t take care of their health, ultimately everything else suffers, and I want everyone at SAP to have a dream job. I want people to be happy and to be inspired to have a thrilling career. The people who power this company are the most important part of it.”

Accenture logo

In another case study on issworld.com, we see how Accenture created a dedicated wellbeing program to boost employee engagement, lower absenteeism, promote health, and boost their bottom line.

“Working in a high-demanding environment, our young consultants are under huge pressures. From experience and research, we know that being connected to work 24/7 has negative impacts on productivity, employee work-life balance and health. Together with our Vested Outsourcing partners at ISS, we asked ourselves; how can we prevent this from happening to any of our employees? How can we make sure our employees work smarter, but not harder? And how can we create an organisational culture which helps employees manage their energy levels and health – not only during a workday but throughout their whole career? These questions established a baseline for what we today call “Accenture: Be at your best”.

Ricco Groeneveld, Workplace Lead BENELUX at Accenture

Physical activity has become a priority:

“At Accenture sitting is the new smoking. That is why the office has been verticalized to make people move around the workspace and desk bikes now make an integral part of the interior.”

People moving and keeping fit

 

Fit. Healthy. Happy.

It’s clear that employee wellbeing is good for business. But wellbeing is a broad subject. So where do you start?

Aside from things like air quality and natural light in buildings, the comfort of work stations and work environments, workplace design, and so on, you will find that a focus on fitness and general physical activity can be a relatively low-cost strategy with big rewards. Encouraging and supporting physical activity can lead to increased productivity, reduced absenteeism, less turnover, fewer accidents and insurance claims, and lower costs associated with retirement. And it’s social and fun. Aside from the obvious physical and mental health benefits, having a strategy that enables people to move and participate is great for team building, healthy social connections amoungst colleagues, and a strong company culture.

“Physical inactivity is now the fourth-leading risk factor for death. Without physical exercise, people lose strength, stamina, flexibility, and cardiovascular function. Many experience depression, stress, and weight gain. Those who rarely exercise have a 50 percent increased risk of low productivity.” – Quoted on Work Design Magazine

If you’re looking for an easy way to get your teams active and engaged (without the extra admin and set up costs), you may want to know more about Fitlink – our fitness-focused employee wellbeing platform that motivates and rewards staff for being healthy. HR get a dashboard to manage and monitor the campaign and users get a slick app that connects to their activity trackers. It’s a modern and cool approach to workplace wellness.

 

Man and a woman next to each other on smartphones.