Indicators of employee stress, burnout and unhappiness are higher than ever  before (refs. 1/2/3). With approximately 60% of the world’s population in work, employers have a huge  opportunity to be a part of the solution to the mental health crisis. Not only is it the right  thing to do for the health of your people, but there is also a growing body of high- quality evidence demonstrating that a focus on employee wellbeing is good for the health of your business too.

What is the research telling us?

The latest research indicates that improved wellbeing among employees is reflected in:

• improved productivity,
• better talent attraction and retention,
• reduced absenteeism,
• and benefits for the bottom line and stock market performance of an organisation.

Productivity

Research published in Management Science (ref.4)  reveals that a one-point increase in employee wellbeing on a 0-10 scale can lead to an average 12% increase in productivity. The study, led by Professor Jan-Emmanuel De Neve, focused on workers at a BT call center, where employees reported their wellbeing weekly over a six-month period. The researchers compared these self-reported scores with detailed performance data and found a strong correlation between employee happiness and enhanced customer satisfaction, i.e. customers’ perceptions of the quality of the job being done.

The headline finding – the 12% productivity boost – used sales as a proxy for productivity. However, for tasks requiring higher levels of social and emotional intelligence, the productivity gain was even more significant, approaching 20%.

Talent attraction and retention

Workplaces with better wellbeing are more likely to attract prospective talent. In a study by Dr George Ward (ref. 5) , the behaviour of 24 million jobseekers on the Indeed recruitment platform was examined. The study involved an A/B test where some candidates were shown traditional job ads, while others saw job ads enhanced with the company‘s ‘Work Wellbeing Score’, based on employee feedback. The findings revealed that jobseekers were over 14% more likely to apply to positions at companies with an average or above-average wellbeing score compared to those with a low score.

Moreover, happier organisations are better equipped to retain their existing talent. Employees with higher wellbeing scores are not only less likely to take mental health-related absences – which cost UK employers up to £51 billion a year (ref. 6)  – but are also less likely to seek employment elsewhere. A related study by Dr Ward (ref. 7)  on the Glassdoor platform found that employees who rated their current employer as ‘poor’ were twice as likely to apply for another job within a week.

Financial and stock market performance

Happy employees often lead to happy shareholders. Researchers from the Wellbeing Research Centre at the University of Oxford (ref. 8)  analysed financial data from US publicly-traded companies alongside employee wellbeing data from the recruitment platform Indeed. They discovered a strong correlation between employee wellbeing and key performance indicators such as firm value, return on assets, and gross profitability.

The researchers further simulated an investment portfolio consisting of companies with the highest work wellbeing scores, finding that it outperformed traditional stock indices like the S&P 500, Nasdaq-100, and Dow Jones by approximately 20% during the study period.

This research indicates that companies with high workplace wellbeing not only perform better but also deliver superior returns to investors.

To effectively implement a work mental wellbeing strategy that benefits both employees and employers, organisations should adopt a holistic approach guided by the three Strategic Pillars outlined in this Framework.

This is an extract from the MindForward Alliance Thriving at Work Framework - a guide to building a mentally healthy workplace.
Download the Framework here

References:

1. Brassey et al., (2022). Addressing employee burnout: Are you solving the right problem? McKinsey Health Institute. https://www.mckinsey.com/mhi/our-insights/ addressing-employee-burnout-are-you-solving-the-right-problem
2. CIPD (2022). Health and wellbeing at work. CIPD. https://www.cipd.org/uk/ knowledge/reports/health-well-being-work
3. Gallup (2022). State of the Global Workplace 2022 Report. Gallup. https://www. com/workplace/349484/state-of-the-global-workplace-2022-report. aspx%22%20/l%20%22ite-393248
4. Bellet, C.S., De Neve, J-E., & Ward, G. (2023). Does employee happiness have an impact on productivity? Management Science. https://doi.org/10.1287/ 2023.4766
5. Ward, G. (2022). Workplace Happiness and Job Search Behavior: Evidence From A Field Experiment. MIT Sloan School of Management Working Paper 6607-22. org/10.5287/ora-bpkbjayvk
6. Deloitte (2024). Mental health and employers: the case for employers to invest in supporting working parents and a mentally healthy workplace. https://www.deloitte. com/uk/en/services/consulting/research/mental-health-and-employers-the- case-for-employers-to-invest-in-supporting-working-parents-and-a-mentally- health-html
7. Ward, G. (2023). Workplace Happiness and Employee Recruitment. In Academy of Management Proceedings https://doi.org/10.5465/AMPROC.2023.132bp
8. De Neve, J-E., Kaats, M., Ward, G. (2023). Workplace Wellbeing and Firm Performance. University of Oxford Wellbeing Research Centre Working Paper 2304. http://doi.org/10.5287/ora-bpkbjayvk