Why healthy staff mean healthy profits

Look at the colleague beavering away opposite. Are they a little green around the gills or perhaps they’ve been sniffling all day despite getting in for a 7:30 conference call? Hardly an unusual scenario as more than 90 per cent of workers routinely come into the office when they’re not feeling up to a day’s work…. hindering productivity and inflicting germs on their (previously) fit colleagues. Or perhaps that person isn’t even in the office, having called in sick for the second week in a row. Again, this wouldn’t be anything out of ordinary for the UK workforce.

According to data from the Health and Safety Executive, the cost of illness to the economy is approximately £9.4 billion and the bill for employers is £8 billion. On an individual level, the median cost of accidents is £554, according to the Chartered Institute of Personnel and Development (CIPD).

Burning questions
“If you treat people like machinery, you are going to burn them out, and in a knowledge-based economy driven by people’s innovative thoughts and experiences, you have to create the right environment so people feel willing to share their experiences,” insists research adviser in human capital and metrics at the CIPD Edward Houghton. When people are at a premium, it’s surprising that many companies (both across the UK and globally) struggle to establish strategies to adequately cater for the health and wellbeing of their employees.

But what’s the angle for FDs? From the perspective of financial reporting, employees fall into the category of ‘human capital’ – one the intangible assets that don’t necessarily appear on its balance sheet, but make a huge contribution to a company’s profits. “The main value of an organisation is tied up in these intangible resources, but we have many difficulties in accessing it,” says Houghton.

The stress test
Stress and mental health are perennial questions for professionals invested in employee wellbeing. Despite more than half of people having had a recurring mental health issue in the past 12 months, “we’re not so good at managing people’s mental health,” says marketing director of Canada Life, Paul Avis. “There is a spectrum of causes that could be work-related or non-work-related, but we’re not very good at dealing with these when they arise.”
So, prevention versus a cure? “When people talk about health and safety, they immediately think of stopping staff falling off ladders or slipping on banana skins,” says Avis. “The changing demographic of UK PLC means we’re not in that world anymore and many people have sedentary white-collar jobs with tight deadlines.”

So what should a company do if it wants to retain top talent and avoid being hit by the costs of staff absence? Begin by consulting the workforce, says Houghton. But, this process needs to go beyond the annual survey that ends up sitting in a database. It should involve activities such as ‘lunch and learns’ in which experts visit the office to share their views.

If you are planning to overhaul your absence management strategy, it also makes sense to take a forensic look at data surrounding staff sickness – not just the level of illness, but also the type. “Your workforce is entirely unique to your organisation and you need to understand the needs of that workforce before putting together any strategies.

Diversity and inclusivity is another topic high on the agenda in boardrooms across the UK – particularly in light of the aging workforce and shifting pensions regulations requiring staff to work until much later in life than previous generations.

This is the subject of PwC’s Golden Age Index, which measures companies’ success in harnessing the potential of older workers. Among its main conclusions, it found the UK could boost annual GDP by approximately £100 billion (5.4%) if it matched employment rates for 55-69 year olds to those of Sweden – the best performing EU country in its treatment of older workers.

“Businesses could gain from job redesign and role shifts to enable longer careers and manage the health issues of older workers,” the report states. “Training and development should not stop at 50. Family crisis leave, career breaks and alumni programmes could all help to utilise the skills of older workers at a time when customer bases are also aging. Age should be included in diversity audits for companies.”

When employees do call in sick

The relationship between the line manager and the employee is at the centre of this process, but its success relies on equipping managers with the skills they need. To ensure managers understand the correct protocol for dealing with absence, a transparent absence procedure is essential. Many companies now enforce a telephone questionnaire on the first day the member of staff calls in sick. The next step is to request a sick note on the seventh day of absence and a face-to-face visit on the 14th.

“We often take technical managers and promote them to people managers without equipping them with the skills they need, which, in itself, causes people to go off with stress,” says Avis. For line managers and FDs struggling to cope with long-term absence, the difficulties are understandable. But the health of employees will have a very real impact on the health of the bottom line.

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