In today's fast-paced, competitive business landscape, the health and well-being of employees have emerged as critical factors influencing organisational success. A healthy, engaged workforce is more productive, innovative, and loyal. Conversely, an unwell workforce is costly, impacting productivity, morale, and the organisation's bottom line. While some of these costs may be clear to any HR manager or CEO, some may pass unnoticed.
Absenteeism: The Obvious Cost
Absenteeism, the most obvious indicator of an unhealthy workforce, is a costly problem. Employees who are sick (or feeling overly stressed) don’t come to work. This seems straightforward, the company is paying for an employee who is not delivering any output for a certain length of time. However, beyond the direct loss of productivity, there is a ripple effect which magnifies the expense to the company. Absenteeism disrupts workflow, and the redistribution of tasks can lead to missed deadlines, disgruntled customers or compromised project quality.
Additionally, there is sometimes a knowledge gap left by the absent employee which can potentially lead to inefficiency and costly errors. Finally, replacing absent workers, whether through overtime, reduced output, temporary staff, or new hires, incurs additional financial burdens.
While many business owners, CEOs and HR managers generally attribute absenteeism to physical sickness, such as the flu, stomach upsets and so on, what they may not realise is the substantial impact mental health has on the workforce. Studies have shown that “68% [ of employees] have taken time off work because of a mental health condition,” and according to WHO, mental health, most notably depression and anxiety, result in the loss of approximately 12 billion working days every year worldwide, which costs around $1 trillion per year in lost productivity.
Luckily there is a solution a study by Zippia found that “56% of employees who participate in company wellness programs say they have fewer sick days due to these programs.”
Presenteeism: The Hidden Drain
It's not just about the days employees miss; it's also about the days they're there but not fully functioning. This phenomenon, known as presenteeism, is a silent killer of productivity. Employees who come to work sick, stressed, tired or burnt out often underperform and underproduce. When surveyed by the Anxiety Disorders Association of America (ADAA) more than 50% of employees stated that stress or anxiety was affecting their workplace performance.
This reduced cognitive function, physical discomfort, or potential for spreading illness can create a drag on overall team performance. It can result in errors, decreased output, and an overall decline in morale. When discussing the negative effects of poor mental health, 41% of employees told ResumeLab that making workplace mistakes is the most common adverse effect of mental health deterioration.”
Presenteeism or the “quiet quitters” can also begin to create a corporate culture of unengaged employees and an overall negative attitude towards work, this negativity can spill over into relationships and correspondence with clients, co-workers or other stakeholders.
The Vicious Cycle of Overwork
Absenteeism and presenteeism often create a vicious cycle. When employees are out sick or underperforming, their workload is typically redistributed among the remaining staff. This increased workload can lead to burnout, decreased job satisfaction, and, ironically, increased health risks for those picking up the slack. It's a domino effect that can undermine the overall health and well-being of the workforce.
Furthermore, on an individual level, poor health, whether physical or mental also encourages a downward trend. Mental health can negatively affect physical well-being with more depressed or anxious people not having the energy or inclination to exercise, or indulging in binge or ‘emotional eating.’Occasionally it can result in employees attempting to ‘self-medicate’ or compromise their long-term health for short-term relief. This comes in the form of alcohol, substance abuse, overuse of medication or high levels of caffeine consumption. This is substantiated by the Anxiety Disorders Association of America (ADAA) survey which concluded that the ways people cope with work-related stress include “drinking caffeine more often (31%), smoking (27%), taking medication (23%), and consuming alcohol in larger quantities than usual (20%).”
Conversely, poor physical health, being sick frequently or contending with chronic conditions or constant pain can have a draining and detrimental effect on one's mental health, thus re-engaging the negative cycle.
Burnout: The Ultimate Cost
Burnout, a state of emotional, physical, and mental exhaustion caused by prolonged or excessive stress, is a growing concern in the workplace. It's often linked to too many tasks, unrealistic deadlines, lack of control, and insufficient reward. Burnout can lead to decreased productivity, increased absenteeism, and higher turnover rates. It also has a significant impact on employee morale and engagement.
Burnout, which is linked to employees' overall mental health and resilience, is a concerning topic. Many employees may not feel comfortable verbalising struggles with mental health or their feelings of being overwhelmed with work. Frighteningly, according to a study by Sapien Labs “twenty-two per cent of respondents in a study of over 45,000 people avoided getting help for mental health symptoms because they were afraid of the social stigma,” while ResumeLab found that “68% felt disclosing a mental health condition would harm their professional reputation”.
With employee wellness programs managers can begin to tackle the growing issue of mental health in a safe and inclusive environment. Opening the doors for those who need more substantial help, while allowing others the chance to avoid complete burnout with some simple tricks and tools.
Healthcare Costs
An unhealthy workforce often translates to higher healthcare costs. Increased absenteeism or frequent healthcare claims can lead to higher medical aid premiums. Moreover, chronic illnesses and injuries, often linked to poor employee well-being, result in higher workers' compensation claims.
Beyond direct costs, consider the indirect expenses associated with healthcare. These include administrative costs, lost productivity due to time spent on healthcare-related tasks, and the cost of replacing employees who leave due to health-related concerns.
There is however, light at the end of the tunnel, according to the same study by Zippia, “Seventy-two per cent of employers saw a reduction in healthcare costs after implementing a wellness program.”
Turnover and Recruitment
A workforce plagued by health problems is more likely to experience high turnover rates. High turnover rates are often linked to employee dissatisfaction, which includes concerns about health and well-being, workload and work-related stressors. As mentioned in other points above it is easy to see how having an unwell workforce can contribute directly to employee stress and workload.
Additionally, when employees feel their health is not prioritised or that management is not considering their physical or mental well-being, they are more likely to seek employment elsewhere. Conversely, it appears from studies, that employees who feel that their well-being is considered a priority are more likely to remain in their current employment. Up to “ eighty-nine per cent of employees who work for companies with wellness programs report being happy with their job and would recommend it to others.”
Maintaining an engaged and loyal workforce should be a top priority for most companies. Replacing employees is costly, involving recruitment, onboarding, and training expenses. Additionally, there's the intangible loss of institutional knowledge and productivity during the transition period. Furthermore, high turnover can disrupt team dynamics, negatively impact morale, and damage a company's reputation as an employer of choice. Ultimately, the costs associated with employee turnover far outweigh the investment in creating a healthy and supportive workplace.
Decreased Morale and Engagement
Beyond financial implications, an unwell workforce suffers from decreased morale and engagement. A climate of illness and stress creates a negative atmosphere that can impact job satisfaction, teamwork, and innovation. Gallup identified that around “sixteen per cent of employees are actively disengaged at work”, a statistic that carries significant risks. Disengaged employees can exhibit low productivity, poor customer relations, and even pose safety hazards in high-risk environments.
A decline in morale and engagement can lead to a downward spiral, affecting productivity, customer satisfaction, and the company's overall reputation. While it’s clear that an unwell workforce or one that is not supported in their health and well-being becomes less productive and less engaged, studies have shown, in comparison that, “companies with employee wellness programs see a 5% increase in productivity compared to those that don’t focus on employee wellbeing.” This highlights the positive correlation between employee health and organizational success.
The Ripple Effect
The costs of an unwell workforce extend far beyond the balance sheet. A healthy workforce is a cornerstone of a thriving business. It contributes to a positive company culture, attracts top talent, and enhances the company's reputation.
By investing in employee well-being, businesses can reap significant long-term benefits. It's not just about reducing costs; it's about building a stronger, more resilient organisation.
It's evident that investing in employee well-being is not just a philanthropic endeavour; it's a sound business strategy. A healthy workforce is more productive, creative, and resilient. By prioritising employee health, companies can reduce costs, improve morale, and enhance their overall performance
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