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The business benefits of investing in wellbeing

Good employers take the safety of the people who work for them seriously.

A good employer understands injuries cost their people and their business. They also know health and safety legislation obliges them to create a safe workplace.

But what about the ‘health’ side of health and safety? What return on investment does an employer get for investing in the health and wellbeing of their employees?

Healthier workers = wealthier business

Healthy employees are believed to be more productive than unhealthy workers so helping employees improve or maintain their health is good for business.

Healthy people are less likely to become sick with ongoing conditions (such as heart disease, type 2 diabetes and some cancers) and tend to take fewer sick days. They’re less likely to be fatigued so are more alert to safety issues and less likely to be injured.

They’re more likely to stay on the job for longer, reducing recruitment and training costs and the resulting productivity losses.

An Australian study has found the healthiest workers are up to three times more productive than the least healthy workers:

  • Healthy workers worked 143 effective work hours a month, compared to unhealthy workers’ 49 hours.
  • Healthy workers took two days annual sick leave, compared to the 18 days unhealthy workers took.
  • Healthy workers were fit, energetic and alert, compared to unhealthy workers who had low energy and poor concentration.

Cost of absenteeism: A New Zealand workplace survey estimated 7.4 million workdays were lost through absenteeism in 2019, up from 6.7 million in 2016. The direct costs of absenteeism amounted to an estimated $1.79 billion across the country, compared to $1.5 billion in 2016.

A healthy business = a lawful business

A healthy workplace is less likely to face fines or legal action for health, safety, and employment relations infringements.

Legislation - including the Health and Safety at Work Act (2015) - sets out an employer’s responsibilities to provide a healthy workplace, and that covers more than just reducing employees’ risk of occupational diseases and injury. An employer’s legal responsibilities extend to other areas of workers’ physical and mental wellbeing, including providing a workplace free from:

  • bullying and violence
  • discrimination against gender, religion, sexual orientation
  • sexual harassment
  • all types of exploitation and stigmatisation
  • tobacco harm (second-hand smoke)
  • alcohol harm
  • risk of sun damage.

Employers who don’t provide a safe and healthy workplace can be prosecuted, face significant fines and even imprisonment. Such costs will be severely damaging to a business’ reputation and ability to attract new employees and customers.

Low or no cost = valuable returns

A healthy business sees workplace wellbeing as part of its core business, not a business cost.

Investing a little time and (maybe, but not necessarily) money to create wellbeing at work can deliver substantial direct and indirect returns. 

Global research has found that when employee health and wellbeing is managed well the percentage of engaged employees increased, as does creativity and innovation. 

We believe that engaged people deliver exceptional results. Wellbeing for us is about what’s going to engage people – what’s important to them? If they’re going to contribute to Z they need to be in a place of strength to do that.

Julian Hughes, GM Health & Safety, Z Energy

Little work has been done in New Zealand on the return on investment (ROI), however overseas studies indicate a strong return on investing in wellbeing.

  • European studies estimate for every Euro spent on wellbeing there was an ROI of between €2.5 and €4.8 due to reduced absenteeism.
  • The New Economics Foundation's Wellbeing at Work Report presents evidence that people who achieve good standards of wellbeing at work are likely to be more creative, more loyal and more productive. They also provide better customer satisfaction than those with poor levels of wellbeing at work.

Consider smoking

Costs of smoking: A smoking employee tends to take more sick days than a non-smoking worker. Also, if they take four ten-minute breaks a day, each year they work a month less than a non-smoker. This costs the employer at least $2000 a year in lost productivity.

Costs of helping people quit: Potentially free. Free counselling and subsidised nicotine replacement therapy may be available on referral to Quitline. 

Therefore, every employee who stops smoking delivers direct savings in increased productivity, in addition to taking fewer sick days and potentially staying fit for work for longer.

Healthy workplace = healthy reputation

The majority of employers want to be a good employer. Every good employer wants great employees to want to work for them. Being known as an employer who values people’s health and wellbeing is attractive to valuable employees.

There are significant recruitment and training costs around bringing on a new employee and you want to be sure your people want to keep working for you. There’s a virtuous circle in that how you treat your employees is reflected back at you.

It is reflected in how your employees talk about their workplace publicly and, in this age of social media, good (or bad) news can spread very quickly enhancing (or damaging) the reputation of your business and your ability to employ the best people.

Your workplace = perfect classroom

Because we spend a good third of our day at work, the workplace is an ideal environment to promote health and wellbeing.

By role-modelling healthy behaviours employers can directly influence their people’s behaviours, at least while they’re at work. And, ideally, some of those behaviours will make them think about how they act away from work.

It’s in a business’ interest to take action to create behaviour change because so much of what happens to a person outside of work affects how they are able to function at work. Some of these things an employer may not be able to change, but some they may.

Read more about what factors interrelate to affect health.

Be a great role model: Promoting wellbeing to your people is no good if they, and you, aren’t engaged. Research shows managers have an enormous influence on how engaged employees are in wellbeing. So lead from the front - everyone can only benefit.

For more about the benefits of becoming a healthy organisation, see Graham Lowe’s report, The Wellness Dividend.

"The Warehouse believes getting involved in the wider community is important for a very fundamental reason. We believe that strong communities need strong businesses and strong businesses need strong communities. They’re interdependent."

Paul Walsh, GM Community and Environment, The Warehouse
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