The business case for wellbeing

What’s the real ROI on investing in employee wellbeing?

The growing emphasis on wellbeing initiatives has sparked discussions globally about their effectiveness and tangible benefits.

88% of companies in the US are investing more in mental health support (Wellable, 2021). Across the pond, the trend is similar, with over 80% of UK companies increasing expenditure on stress management and resilience resources. Additionally, more than half of the companies surveyed by the BBC are introducing new mindfulness and meditation programmes (BBC, 2021).

Many are wondering: is investing in employee wellbeing simply a corporate buzzword, or does it genuinely impact the bottom line?

Let’s dive in.

The business case for wellbeing strategies

According to McKinsey's March 2024 report, globally, improving employee health and wellbeing could generate a staggering $3.7 trillion to $11.7 trillion in economic value (McKinsey, 2024).

That’s not the only perk.

1. Improved employee engagement and retention

   Wellbeing initiatives play a pivotal role in fostering employee engagement and retention. HR leaders globally emphasise the significance of wellbeing programs, with 79% considering them vital for retention and 78% for talent acquisition (Newsweek, 2023).

   Additionally, research from McKinsey shows that employees who are facing mental health and wellbeing challenges are four times more likely to contemplate leaving their organisations (McKinsey, 2023).
   

2. Increased morale, job satisfaction, and work-life balance

   Prioritising employee wellbeing correlates with higher morale, job satisfaction, and a healthier work-life balance. This not only boosts productivity but also reduces absenteeism and associated costs significantly.

   And those costs are not negligible…

   Mental health problems on average cost companies £56 billion per year (Deloitte, 2022) and, in 2023, UK employees were apparently absent for an average of 7.8 days per year for mental health reasons (CIPD, 2023).

   In 2024, it’s been suggested that mental health issues will cost a single employer an estimated £1,230 per employee per annum in an average office-based environment (People Management, 2024).

3. Positive impact on mental health and work productivity

   It’s found that investing in mental health and wellbeing leads to tangible productivity gains.

   In joint research by the University of Oxford and British telecoms firm BT, ‘happy workers’ were found to be 13% more productive (University of Oxford, 2019). Similarly,at a global level, McKinsey found that better health also correlated with higher workforce participation, reporting that every 1-3% increase in workforce participation yields between $1.4 billion to $4.2 billion in additional revenue (Mckinsey, 2024).

4. Positive employer brand and reputation

   In McKinsey’s recent report, they also reference a lawsuit that resulted in a large fine for an organisation that tolerated a toxic workplace culture.

   McKinsey commented, “As employees develop higher standards for what is tolerable in the workplace, more pushback and litigation may be possible.” (McKinsey, 2024).

   Companies that prioritise employee wellbeing not only mitigate legal risks but also enhance their brand reputation. Investors are increasingly considering Environmental, Social, and Governance (ESG) factors, making wellbeing initiatives a crucial aspect of corporate sustainability. But how do we get there? 

So, what’s the bottom line?

This is all just the tip of the iceberg - there are numerous studies and evidence that explain why organisations should invest in their wellbeing strategy.

It’s not just a trend - it’s a strategic business move for any organisation looking to thrive.

 To fully capture the economic benefits, employers must transition from merely mitigating risks to actively promoting optimal health among their workforce. By fostering a culture of wellbeing, businesses can embark on a journey of positive change, benefiting employees, and organisations alike.

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I’m Miriam and I run Reasonful - we offer support to small and medium-sized businesses that are typically facing challenges of rapid growth, talent retention, fast-paced work and constant pressure to deliver results, all whilst wanting to support long-term employee mental health and wellbeing.

We offer mental health workshops, mindfulness classes, wellbeing strategy support and bespoke programmes.

Sign up for our FREE Guide to Building and Sustaining a Culture of Wellbeing to get started today. Click here to find out more.

Or, book a no-obligation 20-minute call to learn more about unleashing your team's potential through strategic mental health initiatives here.