Well-Being//

The ROI of Wellbeing

The importance of talent management

I was teaching Masters students at IE’s School of Human Sciences and Technology recently. Teaching wellbeing at work to an average age of 25 was a refreshing experience. There was no need to try and convince them of the importance of the topic which they were immediately drawn to, and in which they saw both the business rationale and the necessary responsible care of employees by the organization.

So what are some of the starting considerations for wellbeing at work? Can we indeed move towards a Return on Investment on such a topic? Thinking on appropriate measures would seem to be a reasonable starting point. Researchers at the Ross School of Business have looked at the factors that support sustainable high performance. They focus on the term ‘thriving’ to describe employees who are not just satisfied and productive but also engaged in creating the future. They see thriving as present when people believe what they are doing makes a difference and that they are learning. Thriving employees are highly energized and know how to avoid burnout.

They found people who fit their description of thriving as having 16% better overall performance (as reported by their managers) and 125% less burnout (self-reported) than their peers. They were 32% more committed to the organization and 46% more satisfied with their jobs. They also missed much less work and reported significantly fewer doctor visits, which meant healthcare savings and less lost time for the company.

Professor Scott DeRue, dean of the school, is convinced of the increasing importance of wellbeing for leadership and performance. He highlights the concept of ‘spillovers’, noting that wellbeing isn’t just something that matters at work: “We’ve found that if people aren’t well at work, they aren’t well at home, and vice versa.” The impact of business on healthy communities and societies is clear, with encouraging signs being a change in attitude with the new generation of managers. Current students at Ross have a thriving Wellness Club which tackles some of the main issues around health and performance that DeRue sees as important for more positive organizational leadership.

The 2017 World Happiness Report includes a chapter on Happiness at Work. Loosely defined as subjective wellbeing, the authors consider self-reported evaluations of happiness in different jobs and around the world. Labour intensive jobs are rated as having lower levels of happiness worldwide. In contrast, white collar jobs – executives, managers, officials – evaluate the quality of their lives as higher. Self-employment has a more nuanced effect, in being associated with both higher overall life evaluation and with more negative, daily emotions such as stress and worry. It is important to highlight the key part that work in general has on our wellbeing as human beings – unemployment is shown to have a devastating effect, with the authors commenting that:

“The importance of having a job extends far beyond the salary attached to it. A large stream of research has shown that the non-monetary aspects of employment are also key drivers of people’s wellbeing. Social status, social relations, daily structure, and goals all exert a strong influence on people’s happiness.”

A key finding for our pursuit of business impact through wellbeing is the fact that though relatively high levels of happiness and job satisfaction are present around the world, engagement at work is still low. The authors state that engagement is a higher hurdle to clear than the simpler concept of satisfaction. How may we therefore gain that higher state of performance as opposed to idling along? An answer may come from a classic approach to wellbeing that has enjoyed a resurgence in recent years. The work on ‘flow’ by Mihaly Csikszentmihalyi has been covered of late in terms of performance, yet it is important to remember that its roots are in the pursuit of human happiness and wellbeing. What this tells us, we believe, is that wellbeing and performance are inseparable – and offer an as-yet-untapped source of massive potential for a company..

Wellbeing has a formal presence in most large companies today, yet it exists at a relatively junior level of the organization and is focused on the reduction of risks, including absenteeism and sickness. Many programmes take a clinical-based approach rooted in the insurance industry. Absence is often reduced, yet the dangers of presenteeism; long hours and low productivity, or people returning to work before they are ready, and affecting other members of the workforce negatively through sickness or emotions, are increasingly recognized.

Are formal wellbeing programmes required? In most cases, yes. Yet there is another way of perceiving the opportunities of wellbeing, in the ways that it can improve executive performance – through the increased energy, creativity, resilience, and leadership it undoubtedly generates. If a more progressive definition of health exists beyond merely the absence of sickness, why does health and wellbeing management in the enterprise still suffer from a similarly negative approach? One answer could be that the narrow, risk-focused view of wellbeing at work is easier to measure. Some of the business leaders we have engaged with believe this to be part of the company journey – gaining the foothold of demonstrating impact on such measures before affecting the leadership culture.

The financial benefits of wellbeing programmes is a matter of debate. The Rand Corporation found that although four-fifths of all US employers with more than 1,000 employees are estimated to offer such programmes, there are no cost-savings associated with the management of high-risk employees (those who smoke or are overweight). It contrasts its findings with Johnson & Johnson, one of the longest-running programmes in the US, which finds return on investment ranges from $1.88 to $3.92 saved for every dollar spent, believing its own methodology to be more accurate. It also found participation in programmes to be low, in the range of 20-40% of the workforce.

So the benefits of wellbeing at work are undoubted, yet wellbeing programmes don’t always capture that value. How then may we deliver the ROI of wellbeing? One area could be talent management. Attracting, developing, and retaining the best talent is a priority for many leading companies in today’s business environment. Today’s war for talent and the sometimes-flighty nature of the millennial generation means that companies need to look at any conceivable edge to maintain and nurture their most precious resource. Wellbeing has a potentially massive part to play, and my experience with the Masters students in Madrid has convinced me that it will be an ever more important competitive advantage in the future.

Originally published at www.europeanbusinessreview.com

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