All businesses have to keep a close eye on their costs, especially with high inflation and uncertainty following the Covid-19 pandemic. Whilst investing in employee health and wellbeing is a positive step, it will require some initial investment which could be viewed as a risk.
In practice, an effective health and wellbeing strategy can help reduce business costs, particularly those associated with absenteeism, presenteeism and employee turnover.
With Deloitte reporting that poor mental health costs UK employers up to £56 billion a year, positive steps to improve workplace wellbeing can have a clear impact on your business’ bottom line.
How your health and wellbeing strategy can reduce costs
Decrease absenteeism and presenteeism
Poor mental and physical health is a major cause of absenteeism. By promoting healthy lifestyle habits, providing access to wellbeing programmes and offering mental health support, you can reduce the number of sick days taken by employees, thereby reducing costs.
Increase productivity
Research has shown that happy employees are up to 20% more productive than unhappy employees. By investing in wellbeing, businesses can improve employee engagement, job satisfaction and motivation, which can lead to increased productivity.
Reduce employee turnover
With ‘brain drain’, high recruitment costs and the added administration, employee turnover can have a significant impact on your business. Improving employee wellbeing can help to reduce turnover by increasing employee satisfaction and loyalty.
What is the cost of employee turnover?
It’s important to understand the true cost of employee turnover to your business to establish the impact wellbeing could have. To calculate the costs, you should consider:
Direct costs, such as job site listing fees, agency commission, purchasing new equipment and any training fees.
The indirect costs include all the internal resource needed to provide training and any potential loss of productivity while the new team member gets up to speed.
For your retention rate, calculate the average length of time each person has been employed. Segment it by seniority and/or department. This should highlight any areas of concern. Some turnover may be expected, but frequent changes to leadership, for example, could highlight a more fundamental problem.
The average cost of recruitment in the UK is around £6,400 per employee, however the total cost can be up to half their annual salary.
Although you may be convinced of the benefits of employee wellbeing, it can sometimes be tricky to convince other stakeholders within your business. Our consultants will work with you to better understand the specific needs of your business and employees and identify the areas a health and wellbeing strategy could have the greatest impact.
Our recommended solutions to get started with your wellbeing strategy
Webinars, workshops and training
Access 1:1 support, live, on-demand or in-person webinars and workshops and Mental Health First Aid (MHFA) courses to support mental health and wellbeing.
Find out more
Health cash plans
With 24/7 GP consultations, money back on regular healthcare and quick diagnosis, health cash plans give employees access to valuable health and wellbeing services.
Find out moreWhat do our customers think?
“The main purpose of joining Westfield Health was to provide our employees with financial support towards some of their medical costs during the cost of living crisis. However, we got so much more than that; from working with MHFA England and introducing Mental Health First Aiders across the group, the implementation of a Wellbeing Policy, as well as having access to thousands of discount codes and cashback offers to allow us to continue to do the things we love, Westfield Health has certainly helped us through unprecedented times.”
Steel Dynamics Ltd
