Making

 

the

 

business

 

case

 

for

 

employee

 

wellbeing

In today’s competitive business landscape, organisations increasingly face the constant battle to attract and retain top talent.

To succeed in meeting these demands, they must go above and beyond the traditional offering of competitive salaries and perks.

Employee Wellbeing has subsequently emerged as a strategic differentiator, and companies are recognising its power to not only attract the best talent but also save substantial costs associated with employee turnover, writes Sam Browning – Recruitment Operations & Employee Wellbeing Lead – Mediclinic Middle East, and judge for ‘the mentl awards 2023‘.

In this article, we explore not only the importance of employee wellbeing but also, how it can be used as a magnet to attract talent, and the significant cost savings it can bring when retaining employees. Supported by global data and real-world examples, we demonstrate the transformative impact of prioritising employee wellbeing in organisations.

The Link Between Employee Wellbeing and Business Success:
There is a wealth of research available in the market that demonstrates how employee wellbeing can directly improve business performance – but I want to focus only on two:

All figures are in AED	Average Monthly Salary	Annual Salary	Estimated Cost to replace	Cost of Employee Wellbeing	Potential Savings
Junior Staff	10,000	120,000	39,600	12,000	27,600
Mid -Management	30,000	360,000	118,800	36,000	82,800
Senior Management/C-Suite	50,000+	600,000	1,386,000	60,000	1,326,000

Improved Productivity and Performance: Research consistently shows that employee wellbeing positively correlates with productivity and performance. A study by the University of Warwick (2018) found that happy employees are 12% more productive than their unhappy counterparts. Companies that choose to invest in wellbeing initiatives, such as wellness programs and work-life blend support, witness higher employee engagement, lower absenteeism rates, and increased overall performance.

Enhanced Talent Attraction and Retention: In a talent-driven market, attracting and retaining skilled employees is a key priority. According to a survey by LinkedIn (2021), 70% of professionals would reject a job offer from a company with a bad reputation, even if they were unemployed. By prioritising employee wellbeing, companies create an attractive employer brand and differentiate themselves from competitors, making them more desirable to potential candidates.

Using Employee Wellbeing as a Talent Magnet:
My favorite statistic currently is that in 2022 (according to Glassdoor) 75% of all job seekers in the US looked at a company’s reputation for wellbeing before applying for a job there. Again, here are 2 key aspects of employee wellbeing that can differentiate a company in a crowded market place:

Comprehensive Wellness Programs: Offering comprehensive wellness programs can significantly impact talent attraction. A comprehensive wellness program may include physical fitness facilities, mental health support, nutrition counseling, stress management workshops, and mindfulness training among other things. A study by Willis Towers Watson (2019) found that organisations with well-executed wellness programs are 2.7 times more likely to be seen as an employer of choice.

Flexible Work Arrangements: Flexible work arrangements, such as remote work options, flexible schedules, and job sharing, are highly valued by employees. A survey by Global Workplace Analytics (2019) revealed that 80% of U.S. workers consider flexible work arrangements a significant factor in choosing a job. Companies that embrace flexible work policies can attract top talent, particularly among the millennial and Gen Z workforce who prioritise work-life balance.

The Cost Savings of Employee Wellbeing:
This is what it all boils down to – the part that most of the C-Suite will skip to – how can Employee Wellbeing save us money. I could give you fantastic examples from leading organisations around the world, some of whom estimate that for every $1 spent on Employee Wellbeing there is an ROI of $4. But sadly for some that isn’t tangible enough – so I’ve got 3 more for you:

Increased Employee Engagement: High employee engagement has a direct impact on financial performance. In 2022, Gartner for HR found that engaged employees are 87% less likely to leave their organizations, resulting in significant cost savings. Engaged employees also contribute to higher customer satisfaction levels, increased sales, and improved innovation.

Health Care Cost Reduction: Prioritizing employee wellbeing can lead to lower healthcare costs for companies. A recent study by the World Economic Forum (2020) revealed that for every dollar invested in employee wellness, medical costs decrease by about $3.27, and absenteeism costs decrease by about $2.73. These cost savings result from reduced healthcare utilization, lower rates of chronic illnesses, and improved overall health. On average a company in the UAE will spend anywhere from AED 5000-8000 annually per employee for healthcare insurance – think of the potential savings you will make by reducing your premiums through supporting your workforce in being healthier.

And finally THE BIG ONE, and one that I think will change the way people view Employee Wellbeing:

Reduced Turnover Costs: Employee turnover is a costly affair, a Gallup study in 2022 revealed that engaged and well-supported employees are 59% less likely to seek a different job in the next 12 months.

A report from Centric HR (2021) sheds light on the substantial financial implications that accompany employee turnover. The study reveals that the average cost of replacing an employee is estimated to be approximately 33% of their annual salary. This figure encompasses not only direct expenses such as recruitment, onboarding, and training but also indirect costs associated with reduced productivity, knowledge loss, and the time it takes for a new employee to become fully proficient.

This is an average across an entire organisation – but the scary thing is that once you look at the Senior/Executive Leadership level – this figure jumps dramatically up to 213% of an employee’s annual salary.

To put that into perspective if you spent 10% of an employee’s annual salary on their wellbeing (depending on the size of the organisation) it is next to nothing when, as illustrated below, you could end up spending 2.5 times a person’s annual salary replacing them because you weren’t willing to spend a fraction of that cost supporting them to keep and stay well? It’s a no brainer in my opinion!