Employee Wellbeing & the Great Resignation
Measuring your employees’ wellbeing yet? Since 2020’s start of the pandemic, employees have experienced greater stress, anxiety, and depression. As more companies experience the effects of poor employee wellbeing, we’re likely to see more emphasis on wellbeing metrics and, more importantly, strategies to maintain a healthy wellness culture.
Why Employee Wellbeing Matters
Some corporate leadership teams are focused on wellbeing so they can boost results. That’s because researchers have linked high levels of employee wellbeing with hard dollars – such as lower turnover costs and higher productivity. According to the Deloitte Global Human Capital Trends 2020 study, 78% of organizations worldwide believe ensuring the wellbeing of employees is one of the critical drivers to organizational performance.
Employee Wellbeing & Covid
The pandemic, however, has taken its toll on employee wellbeing. Experts agree that Covid was a time of unprecedented uncertainty – and uncertainty gives rise to stress. These statistics provide a perspective on the effects of Covid on employee wellbeing and engagement:
- A July 2020 study of 1,500+ workers by FlexJobs and Mental Health America (MHA) revealed that 18% of employed workers said their mental health was poor or very poor compared to just 5% before the pandemic.
- SHRM produced a Covid study that reported: “2 in 3 of employees in the United States say they experience depression symptoms at least sometimes.”
- About 46% of the more than 1,400 workers surveyed at the end of 2020 reported mental health struggles. That’s compared to 39% in 2019, according to The Standard, an Oregon-based insurance company.
Additionally, the pandemic blurred the lines between work and home, as well as professional and personal life. We’re now facing facts: people issues and business issues are very much intertwined. When people face financial insecurities, social isolation, relationship worries, and poor physical or mental health, they can’t easily turn off these concerns throughout their workday.
Wellness & Other Human Capital Metrics
As a first step toward improving wellbeing, some employers are now tracking wellbeing scores. The Mayo Clinic, for example, developed its own index to measure the wellbeing of more than 120,000 employees, including doctors, nurses, and other healthcare workers. The tool seeks to quantify distress, the likelihood of burnout, and the perceived meaningfulness of work.
Human capital metrics have also caught the public sector’s attention. Late in the summer of 2021, SEC Chair Gary Gensler tweeted his desire for public companies to provide more data on human capital. While Gensler has not proposed any type of “wellbeing metric,” he did express interest in disclosures associated with employee turnover, training, compensation, and benefits.
“Regulators are honing in on the most important intangible assets: people,” reported Bhakti Mirchandani of Forbes. She believes that “…investors have struggled without standardized human capital disclosure to measure the contribution of human capital to corporate strategy and performance.”
In other words, much of a company’s success rides on the performance of its people. And likewise, much of its risk is determined by its human capital. That’s why the SEC thinks that investors deserve to know more about such factors that affect performance.
The Great Resignation
The SEC is likely focused on the recent trend of employee resignations. The US experienced a record number of employees – 4 million – quitting their jobs in April 2021. According to the German-based HR software company Personio, 38 percent of employees in the UK & Ireland are planning to change jobs.
According to Harvard Business Review research, employer turnover is costly. In skilled and semi-skilled jobs, the fully loaded cost of replacing a worker who leaves (excluding lost productivity) is typically 1.5 to 2.5 times the worker’s annual salary. Investors, therefore, might be exceedingly interested in whether a company is losing workers through turnover.
Wellbeing Reduces Turnover
Helping workers thrive – physically, emotionally, and financially – is a business imperative. That’s according to Mercer, a global consulting firm and manager of assets held by employer-sponsored benefits programs. Higher productivity and lower medical costs aren’t the only potential benefits of a thriving workforce. Mercer’s research has long supported a link between wellbeing and retention. Mercer concluded that “when workers see evidence that their employer is supporting their wellbeing, they tend to stick around longer.”
In analyzing data from its National Survey of Employer-Sponsored Health Plans, Mercer looked at nine wellbeing best practices. These practices included paying for behavioral health services and making spouses eligible for wellbeing programs. Employers that adopted five or more wellbeing best practices experienced an average of 18% turnover vs 29% for employers that operated with two or fewer wellbeing best practices.
What is Wellbeing? How is it Measured?
Wellbeing is a state of optimal health, happiness, and sense of purpose. For more than a decade, Gallup has used its proprietary method for measuring wellbeing. Gallup’s solution, called the Best Possible Life Scale, is based on this two-part question:
Please imagine a ladder with steps numbered from zero to 10, with 10 at the top. Zero represents your worst possible life. And 10 represents your best possible life.
Q1: On which step of the ladder are you standing right now? (0-10)
Q2: On which step do you think you will stand about five years from now? (0-10)
Based on their answers, Gallup categorizes individuals as either suffering, struggling, or thriving. “Thriving employees have 53% fewer missed days due to health issues. Suffering and struggling employees have a substantially higher disease burden due to diagnoses of depression and anxiety, among others. This translates into big differences in productivity,” Gallup reports.
Employers Investing in Wellbeing at Work
According to Deloitte’s research, “large employers in the United States spent an average of $3.6 million on wellbeing programs in 2019, at a cost of $762 per employee. And Grand View Research reports, “The global corporate wellbeing market is expected to grow from $53.6 billion in 2018 to $90.7 billion by 2026.”
So far, these organizations are reporting that their actions are positively impacting their employees. According to Deloitte, “In 2020, almost all organizations (89%) observed a positive effect of the wellbeing programs implemented.”
What Does Wellbeing at Work Look Like?
Some organizations offer wellbeing subsidies employees can use to pay for gym memberships, yoga classes, and fitness coaches. Others provide coverage for behavioral health benefits such as counseling to treat mental health conditions, including addiction. Some of these programs are available to spouses.
Paid leave to both parents for childbirth and adoption is critical for wellbeing. However, experts estimate that about 60% of employers still don’t offer male employees paid paternity leave.
Employees view remote work as both positive and negative when it comes to their wellbeing. By continuing to offer flexibility in both work locations and schedules, employers can foster a culture that promotes work-life balance. However, remote work can lead to additional stress for others who feel they can’t maintain boundaries. In some work cultures, employees feel the “always-on” pressure to be constantly available. It all comes down to your leadership culture.
Leadership’s Role in Employee Wellbeing & Retention
Is attention to employee wellness just a fad? Maybe not, given a tight labor market.
Experts cite a high demand for skilled workers and a limited labor supply as the cause of a power shift from employer to employee. “We’re going to hit a more extreme supply crunch of skills. This will create . . . a significant hike in pay to get people to do those jobs,” says William Gosling, human capital lead at Deloitte.
Compensation, however, is just one of several reasons workers leave. According to Personio’s study, workers’ reasons for leaving were: lack of career opportunities (29 percent), pay cuts (23 percent), poor work-life balance (22 percent), and a lack of learning or development opportunities (17 percent).
How can IMPACT Group help?
Organizations that want to make a profound and sustainable impact on employee wellbeing should focus on leadership development. That’s because, from frontline managers to the executive ranks, leaders are the biggest drivers of positive wellness cultures.
Frontline managers are the face of the organization for most employees. And managers are often the first to become aware of employees’ struggles. The managers who provide the most support to employees are those with highly developed EQ skills. But most people need help in developing these skills. Ultimately, successful leaders must learn how to balance the needs of their employees with the needs of the business.
IMPACT Group offers leadership coaching to help your leaders hone their management skills and succeed in developing a strong and compassionate business culture.
IMPACT Group’s leadership development programs provide an important growth opportunity. It’s an opportunity for the leader to work one-to-one with a leadership coach. Being selected for such a program conveys status. It sends the right message to your talent – that you value them and want them to stay. Our 1:Me coaching-focused programs and action learning approach get results. Our coaches address situations and issues your leaders are managing right now. So your leaders will succeed today, on the job, and in the real world.
Find out more about IMPACT Group’s leadership programs.