Heraclitus concisely surmised “Nothing endures but change” and indeed our world is changing! Experts predict large scale demographic changes, fundamental shifts in the nature of our daily lives, including the way in which we work, and new demands from customers and employees.
Before flexible work arrangements were supported and actively encouraged by mainstream employers, we might have been satisfied when our boss provided support, coaching, development and an outline of a career path. It used to be the case that it was up to us to manage our own health, emotional wellbeing and personal dilemmas. Our managers would cringe at the thought of brokering a conversation focused on our wellbeing unless we had come to them with a specific issue that we wanted to share. Now, however increasing work demands and employers making inroads into our private lives mean that the line between work and home is being redrawn, if not erased all together. So, we have come to expect more!
Within the Australian market, it appears our managers are happy to oblige. The corporate focus on cost is here to stay and organisations continue to struggle with the shift from a world of cyclical cost reduction or containment in response to market pressures, to an environment that demands a sustained focus on driving productivity and efficiency. In this new environment, business leaders are increasingly asking “Why is our employee engagement so low?” However, in our modern work environment, employee engagement is just the tip of the iceberg. Broader issues are working quietly in the background to undermine productivity and creating the perfect storm of employee isolation, disassociation, and ultimately, separation from the workforce.
Increasing work demands and employers making inroads into our private lives mean that the line between work and home is being redrawn, if not erased all together … Within australia, one in three employees retire early from the workforce due to a wellbeing related issue.
Leveraging a scientific model of employees’ ability to work now and into the future that is supported by 30 years of longitudinal research within Europe and a further 10 years in the Australian environment, we’ve taken a holistic view of the factors that influence employee productivity to provide a comprehensive wellbeing measurement framework to assist executives in diagnosing productivity issues, targeting strategic intervention initiatives, and measuring and evaluating the performance of those initiatives over time.
Within Australia, one in three employees retire early from the workforce due to a wellbeing related issue and in EY’s recent Productivity PulseTM, it was estimated that Australian employees with a low or moderate well-being score (considered in the at-risk groups) are costing employers $12 billion annually in lost productivity.
Why are employees with lower wellbeing scores reducing productivity?
Our research highlights those employees who receive lower wellbeing scores:
- have a 70% likelihood of leaving the workforce due to poor wellbeing within the next decade;
- spend an average of 2.2 more days in hospital each year;
- are three times more likely to use rehabilitation services;
- visit a physician on average six more times a year;
- are up to 12.2 times more likely to take more than six weeks sick leave in the following year;
- waste approximately 27% of their available time at work; and
- correlate with lower levels of engagement and lower performance ratings.
We know wellbeing is important and it seems intuitive that there would be links between employee wellbeing, productivity, and performance, but is it really possible to measure and manage it? And does it really impact the bottom line?
Over the past five years, we have developed our own suite of validated predictive psychometric scales and indices that focus on what we consider the five key pillars of wellbeing: health, work environment, financial wellbeing, values alignment, and family and community connectedness. The research has shown that, through targeted intervention, it is possible to improve an employee’s wellbeing score over a two year period. Consequently, we generally recommend to our clients an organisation-wide wellbeing assessment every two years with ad-hoc assessments to on-board any new starters in between assessments.
Health factors have long been associated with wellbeing and wellness initiatives, although corporate focus on health should be about more than just gym memberships and free health check-ups. We focus on the more common standard measures, such as body mass index, diet quality, smoking status, and alcohol consumption, but also look to incorporate clinically-used scales to diagnose instances of depression and/or anxiety and benchmark the results of organisations and their business units against comparable national averages.
The majority of our time is spent at work, so it seems natural that our work environment would impact on our wellbeing, and that our workplace can play an important role in promoting and supporting our wellbeing. We consider the physical and mental demands of the workplace, workplace stress, opportunities for development, the availability and efficacy of people managers, as well as the perceived level of support provided.
Through our analysis, we have also found that an individual’s financial health is indicative of their overall wellbeing. Australians owe a massive $41 billion on their credit cards, a third of all Australians are believed to be unable to retire from work comfortably, and less than 5% of Australians have an investment plan or have consulted a financial planner. Financially stressed employees often change jobs just to earn more short-term income, 40% of employee turnover is due to stress and it costs an employer between $3,000 and $13,000 to replace the average employee. In response, we take a granular look at saving and spending, financial management practices, preparation for life after work, investments, and insurance coverage.
One of the key drivers of employee engagement is the extent to which their values align with those of their organisation. We also test the extent to which employees perceive that the different tranches of leadership within the organisation live and exhibit their stated values.
Finally, resilience is an important aspect of whether we are coping or not coping with the stresses that impact us on a day to day basis. A large part of our resilience boils down to the extent to which we have support networks both within and outside of work available and also the extent to which we feel we can use those networks in times of need.
We can certainly measure wellbeing and diagnose where problems within one of the core pillars may be impacting an individual’s wellbeing. When we run the assessment, we provide each participant with a detailed report that offers guidance on how they can improve or maintain their rating within each of the pillars. This cuts through the extensive information and advice that we are bombarded with daily about what we should be doing to look after our wellbeing by clearly identifying the wellbeing priorities for each individual and providing simple guidance on the things they should take action on.
Our wellbeing assessment provides a robust and scientific evidence base that delivers lead not lag measures and a granular view of retention and productivity risks, the core people issues that organisations face. It also incorporates one of the leading international employee engagement scales. Given this, it can replace the standard staff engagement survey.
The final question – does it impact the bottom line? Ross Miller, General Manager Human Resources of Westpac’s Australian Financial Services, says that over the past year the bank has already been able to discern a relationship between those with the highest level of wellbeing and those with the highest performance ratings. Westpac have included wellbeing as a core component of their people sustainability strategy and they have set targets for their employees’ wellbeing and financial wellbeing in their annual sustainability report. Other banks are modifying their strategy to focus on wellbeing or financial wellbeing, as are life insurers, health insurers, and accident compensation schemes.
We have recently used the wellbeing assessment as well as implementing the program for a range of our clients and have already realised early benefits such as improvements in staff engagement surveys and reductions in sick leave. If a concentrated focus on wellbeing is driving real results for our clients and our own employees, perhaps it’s worth considering your own wellbeing and the wellbeing of people you manage too?
Does it impact the bottom line? – The evidence would suggest there are significant cost benefits to be achieved by focusing on employee wellbeing within the workplace.
The views expressed in this article are the views of the authors, not Ernst & Young. This article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Liability limited by a scheme approved under Professional Standards Legislation.
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