Employee wellbeing: What it is and why businesses should care

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It seems like there’s no organisation in the past few years that hasn’t at the very least considered the idea of employee wellbeing, especially after the pandemic raised even more questions about our ways of working. At a glance, though, it may seem unrelated — what has wellbeing got to do with business?

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When you consider the impact of poor wellbeing on companies, the connection starts making sense: across the UK, bad mental health costs employers up to £45bn per year. Workplaces are social environments, so unpleasant interactions between employees (and management), stress at work, and work-life imbalance can have a knock-on effect on an individual, and as a result, their and their colleagues’ performance. At the end of the day, it’s a question of your bottom line.

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So, what is employee wellbeing in the first place? And why should you care about it?

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What is employee wellbeing?

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Employee wellbeing can be defined as the overall health of employees. It’s common to consider this only in relation to bodily health, but it includes any aspect of physical, mental, social, and financial wellbeing. In other words, someone’s wellbeing represents how their life is going, and in the context of work, it’s about how their job affects and is impacted by their health.

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It would be wrong to evaluate employee wellbeing only in relation to taking care of employees when they’re sick. Wellbeing at work is about businesses regularly and constantly supporting every employee to feel good, be happier, and live a better lifestyle.

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What are the benefits of employee wellbeing?

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We spend a third of our lives at work, so it goes without saying that it has a huge impact on our overall wellbeing. That’s why it’s so crucial for businesses to promote employee wellbeing at work and outside of it, by encouraging, educating, and helping workers to make their health a priority in their lives.

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The right strategy and culture, with emphasis on employee wellbeing, can prevent problems from occurring, stop them from escalating, and help remedy them. According to Gallup, only one in four of employees strongly agree that their organisation cares about their wellbeing, so it’s clearly an issue that businesses must highlight.

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1. Increase performance and productivity

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When people are healthier, less stressed, and feel appreciated, they are far more likely to perform well. It doesn’t only make instinctive sense, but it’s been tested! Studies show that simply by addressing workplace wellbeing, businesses can increase their productivity by 12%. Your overall organisation will also perform better — it was found that, for every pound invested in employee wellbeing, companies can see an ROI of 5 to 12 times that within a year. When it comes to your bottom line, it’s absolutely vital to support your employees’ wellbeing.

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2. Reduce presenteeism and absenteeism

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Are there bigger HR buzzwords than presenteeism and absenteeism? The former relates to the practice of coming into work while sick out of fear, stress, or expectation — even though they can’t function properly — while the latter refers to habitually not appearing for work for no good reason. With presenteeism costing businesses £15.1bn per year, and absenteeism £8.4bn, it’s also clear why they’re so important.

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The importance of wellbeing is part and parcel of absenteeism. The main causes for habitual absence are job dissatisfaction, ongoing personal issues, and chronic medical problems — all of which can be ameliorated with investment in wellbeing. However, it’s important to note that 40% of employees don’t tell their manager the real reason for their absence, as they’re afraid of being judged or disbelieved. Fostering a good culture of wellbeing at the workplace fights back against the stress that’s involved in not attending work, and allows workers to not only be sick (mentally or physically) less, but also not to feel obligated to appear when they are ill, knowing they would be supported.

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3. Support talent acquisition

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One of the biggest problems in the business world right now is talent. It’s become immensely difficult to find a hire who has enough knowledge and experience, knows what they’re doing, and is also a great fit for the team and the company. The reality is, the market right now is candidate-centric and it shows. Potential hires usually have many offers, so it comes down to which organisation is best for them. And, you guessed it — those that invest in wellbeing get better talent. In fact, the Gallup study above found that 63% of workers place having greater work-life balance and personal wellbeing as ‘very important’ to them when deciding whether to take a job with a different company.

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4. Improve employee retention

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Just as important as it is to find talent, it’s crucial to retain it. With employee turnover rates skyrocketing, the costs of it — about 6-9 months of their salary — can be weighty on the backs of businesses today. Wellbeing is a key factor in improving retention: companies with a positive wellbeing culture see 11% lower staff turnover, while, according to the Gallup study above, employees will be 69% less likely to search for a new job. When workers are happy, healthy, and feel like the business cares about them, they’re more inclined to stay.

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5. Boost engagement

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Engagement is another one of those pesky buzzword-y terms that seems to be at the top of any HR department’s priorities. It is the commitment and alignment an individual employee has towards the organisation they work for, and a highly engaged workforce performs better, stays with their company longer, and does better work. Still, only 23% of workers are engaged, with 18% actively disengaged.

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While engagement is a fairly amorphous term, we do know that employee wellbeing increases it — workers in companies that invest in wellbeing are 3x more likely to be engaged at work, and 5x more likely to strongly advocate for their organisation as a place to work and trust the leadership of their business.

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Employee wellbeing can be a tough nut to crack. That’s why, at Thrive, we are committed to supporting your journey using the survey feature on our platform.

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If you want to learn more about it, don’t hesitate to book a demo with us.

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