CoverStory
Health kick: how organisations are overcoming the cost of ill health
Ill health among staff inevitably has financial implications, but there is a strong and growing case for investing proactively in their wellbeing
Words Richard Crump Illustrations Andrew Nye
Dealing with health problems is never a pleasant task for anyone. On top of coping with the issues presented by whatever condition you’re affected by and negotiating the bureaucracy of appointments and treatments, there’s the question of whether it will affect your work – and if so, how? And how will your employer respond?
After all, poor employee health is expensive, and the costs for businesses are rising. It reduces productivity, increases staff absenteeism and turnover, and lowers workplace morale, straining organisational resources.
Ill health among the British workforce costs the economy an estimated £138bn a year, according to research published by health insurer Vitality in May, while a report by Deloitte found poor employee mental health cost businesses £51bn in 2022.
Since the Covid-19 pandemic, the rate of self-reported, work-related ill health has spiked, with more individuals reporting long-term conditions.
Businesses are now losing an average of 9.7 days per employee each year to ill health-related presenteeism and absence.
Mental health issues had the greatest negative impact on productivity: those at risk of depression, fatigue and burnout lose between two and three times more productive days respectively compared with those who do not report these issues, according to Vitality.
Given those negative effects, one might expect employers to regard employee health issues as an inconvenience, but for more enlightened businesses there are opportunities.
“There is a massive correlation between health and productivity – a massive cost but also a massive opportunity for those employers who do invest in those things that are going to move the dial,” Pippa Andrews, director of corporate business at Vitality Health, says.
“It is critical organisations look at the link between employee health and productivity and therefore their profitability.”
There is a massive correlation between health and productivity – a massive cost but also a massive opportunity for those employers who do invest.
Pippa Andrews, director of corporate business, Vitality Health
Caring for your colleagues pays off
Investing in employee wellbeing initiatives, such as mental health support programmes, private medical care, ergonomic workspaces, flexible working and subsidised gym memberships may initially be costly, but it can improve staff productivity, attendance and retention.
Deloitte calculates that for every £1 spent on supporting the mental health and wellbeing of its workforce, employers get on average about £4.70 back in increased productivity based on reported financial returns on workplace wellbeing interventions.
This demonstrates that a higher return on investment can be achieved by early interventions, such as organisation-wide culture change and education, rather than more in-depth support that may be needed at a later stage when a person is struggling.
But employers need concrete evidence to make informed decisions about how to invest in workplace mental health programmes and maximise benefits, including financial returns, according to Elizabeth Hampson, life sciences and health innovation partner at Deloitte.
“What is the call rate on your employee assistance line? How many people are taking days off for stress? What is the average length of time people are taking off? What might be contributing towards that within the workforce?” she asks.
“It is a mixture of medical information, usage of your support system, absence, turnover and exit interviews, and then softer employee experience metrics that feed in.”
Treat every colleague as an individual
Wellbeing isn’t a one-size-fits-all solution. Everyone is different in how they maintain their personal resilience and wellbeing. That needs to be reflected in what employers are offering, but it is essential that companies adopt a targeted approach.
Among the companies surveyed by Vitality, there was an average of 47 ‘interventions’ offered to tackle health issues, although only 25% of individuals said they used the measures put forward by their employer.
Lesley Cooper, founder and CEO of specialist consultancy WorkingWell, says wellbeing programmes can end up “like a buffet at a wedding where two-thirds of it is wasted because nobody wants it”.
The key thing, according to Andrews, is picking the things that are going to improve the productivity of the organisation’s workforce based on the data, and starting small before expanding based on what is working.
“Those metrics allow an employer to see at an aggregate level which interventions are being used and are working and what the underlying risk factors are,” Andrews says. “If an employer knows their key risks, they can target the benefits and communication at those risks.”
Think of the children
According to Deloitte, 46% of working parents are concerned about their children’s mental health, costing UK employers £8bn annually due to the impact on performance, taking time off work or leaving their roles.
Juggling work alongside caring for a child with mental health difficulties led to 10% of parents taking up to five days off per year, while one in 100 working parents left their jobs because of the poor mental health of their offspring.
Of those working parents who are concerned about their children’s mental health, 32% sought to reduce their working hours and 19% asked their employer for additional support, such as an employee support line, childcare or flexible working arrangements.
Companies need to be more aware of the environment their working parents are in and the stresses that are on many young people right now, Hampson says.
“Are there working parent networks? Are their flexible working policies? Companies need to really listen to their working parents and make sure the workplace is as helpful as it can be in the circumstances,” she says.
It’s good to talk
Many accounting firms and finance departments are already budgeting for employee wellbeing programmes. At the same time, efforts are being made to create a culture where it is safe to talk about anxiety, stress and burnout.
Becky Glover FMAAT, finance director at insurer Yutree, says her firm brings in someone for a day each month to run a workshop addressing issues such as sleep, hydration, and mental and physical health.
“You are encouraged to go out with her for a half-hour walk and you just talk. There is no agenda, there is no feeding back of anything,” Glover says.
Robert Bean, managing partner at Grunberg & Co, said that alongside allowing flexible working – where staff can start or finish their day early – his firm has “mental health first aiders” in the office who staff can approach with their concerns.
“A lot of this stuff is about listening and allowing people to get things off their chest. You have got to give them that space to do that,” Bean says.
Make work a safe space
Equally, if not more, important than offering a package of support is that organisations “create a psychologically safe environment where people feel able to use the support resources available to them”, says Lesley Cooper, founder and CEO of consultancy WorkingWell. A good wellbeing strategy should pay attention to how people are feeling about the work they are being asked to do and the quality of the leadership.
“You need those buffet-style treatments, counselling, shutting-the-stable-door-type activities to make people feel better. But the prevention piece, which is the primary piece, often comes by leadership understanding they employ people and not computers,” Cooper says.
Indeed, Andy Bell, CEO of the Centre for Mental Health charity, says it is wrong to start with wellbeing programmes. The things that really create a mentally healthy workplace come down to good management, such as having realistic and fair expectations of staff.
“In some ways, the crucial thing isn’t having interventions or programmes, it is having good standards of workplace relationships and environments, and giving people as much control as you can and as much security as you can,” Bell says.
The vital signs
Annual cost of ill health to UK businesses per year.
Source: Vitality
Average working time lost by businesses to ill health each year.
Source: Vitality
Cost of poor mental health to UK businesses in 2022.
Source: Deloitte
Health kick: How organisations are overcoming the cost of ill health
Ill health among staff inevitably has financial implications, but there is a strong and growing case for investing proactively in their wellbeing
Words Richard Crump Illustrations Andrew Nye
Health kick: How organisations are overcoming the cost of ill health
Ill health among staff inevitably has financial implications, but there is a strong and growing case for investing proactively in their wellbeing
Words Richard Crump Illustrations Andrew Nye