What is the financial benefit of employee wellness?
Let’s get the bad news out of the way first. Each year UK businesses and public services fund a sickness absence bill of around £25bn (Source: PwC ‘The Rising Cost of Absence’).
Depending on which survey you read, UK employees are, on average, absent from work between 6.3 and 9 days per year. (Sources: CIPD Absence Management Survey 2016 and PwC). Given the disruption and cost of absenteeism, it’s safe to assume that most companies would prefer to keep it to a lower rate. Well, the good news is, there are ways of doing that.
The fact that absenteeism rates are not flat across business – tending to be lower in smaller companies at around five days a year, and higher in larger companies, at around eight or nine* days – suggests that they can be influenced.
Certified Top Employers tend to be, although not exclusively, larger companies, averaging 4,494 employees and would, therefore, be expected to be heading toward the higher end of the absenteeism spectrum. Yet, on average, they enjoy absenteeism rates approximately 25 percent lower than other companies of a comparable size, at 6 days a year.**
Multiplying absence percentage rates by workforce size an estimated daily cost per employee for absence of £83^, suggests that the attendance benefit enjoyed by Top Employers translates into a cost saving of approximately £750,000 per year.
How is this achieved? In large part it comes down to these companies regarding expenditure on wellbeing practices as an investment, rather than a cost.
Certified Top Employers offering wellness programmes reap the benefits.
At first glance, an HR Director asking a Financial Director to fund wellbeing programmes for employees may seem like mollycoddling. After all, aren’t we all grown-ups who can take of ourselves? However, we all know that between work, commuting, child care and general life admin, opportunities to look after ourselves often take second place. Companies recognising this and taking practical steps to address it do seem to reap the benefit: their wellbeing expenditure becomes an investment which, in the long run, pays back handsomely.
So what practical steps are Top Employers taking which reduce their absenteeism costs?
Our previous blog on this issue identified the lead causes of absenteeism: stress, acute health conditions, mental health problems, musculoskeletal issues and back pain. A high percentage of Top Employers offer in-house, discounted and/or incentivised programmes to help employees prevent/reduce/combat these problems.
83 percent have a defined, organisation-wide wellbeing programme. This increased from 73 percent the previous year. Among the top five Top Employers it’s a 100 percent clean sweep.
On top of implementing a wellbeing programme, 95 percent of Top Employers actively promote it around their organisation and 71 percent regularly evaluate its effectiveness. Again, it’s 100 percent among the top five.
Our previous Absenteeism blog identifies more of the practices Top Employers use.
And the future? A recent survey of millennials by Gallup found that 6 out of 10 regard workplace wellbeing as ‘very’ important to them. If the £83 a day hadn’t got our attention, no forward-looking company should ignore this kind of statistic.
As wellbeing becomes more intertwined with our workplaces, and more expected by our workforce, the paradigm shift in how employers look after their employees will continue. Make sure you are shifting with it.
More information of wellbeing practices among Top Employers is available from Top Employers UK.
Our working out:
*CIPD Absence Management Survey 2016
**Certified Top Employers recorded absenteeism average of 6 days versus CIPD Absence Management Survey 2016 average absenteeism for companies of 1000 to 4999 employees of 8.1 days)
^Daily cost of £83 calculated by Top Employers from CIPD Absence Management Survey 2016 data: Average cost per employee due to absence of £522p.a. divided by CIPD estimate of UK-wide average absence per employee of 6.3 days per year).