The majority of organisations today are still operating benefit and reward structures that simply do not fit with the modern workplace. There is a greater focus on pension schemes at the expense of supporting employees’ immediate financial needs or problems. Insurance products, such as private medical insurance and income protection policies, kick in only when something has already gone wrong and flexible benefit schemes have very disappointing take up rates. It’s clear the current model is not working. Change is not only needed, it is inevitable. Modern reward and benefit schemes need to ensure employee wellbeing is front and centre.
Defining wellness or wellbeing is an interesting challenge. The World Health Organisation defines wellness as ‘a state of complete physical, mental and social wellbeing, and not merely the absence of disease or infirmity’. However, there is a significant omission – there is no mention of an individual’s financial wellbeing. Banding it under mental or emotional wellbeing simplifies a very complex area.
There is now significant research into financial wellbeing and the impact of not understanding its implications as an organisation. Research in 2017 conducted by payroll lending provider Neyber found that nearly half of all employees borrow money each month just to meet their basic needs. In the same research, employees aged between 18 and 54 cite financial worries as their number one concern when compared with general health, career or work-life balance – yet it it did not figure in the top three concerns perceived by employers. The great news based on our own research ‘Thinking Beyond Reward’ is that employers are in a unique position of trust to help people.
Is there an impact to organisational performance? ‘Wellbeing’ and ‘wellness’ as buzzwords in reward have been around for a number of years. However, there is an impression that employers offering workplace wellness solutions are simply paying lip service to the concept, without introducing the behavioural changes needed to effect real change for the individual. But if a change actually happens then the positive outcomes for the organisation are hard to ignore. Our partners in our recent research, business psychologists Robertson Cooper, have previously found that organisations that can create a sense of positive psychological wellbeing and behaviour see a 28 per cent increase in productivity and a 31 per cent increase in creativity, and find individuals are 70 per cent more likely to recommend their organisation.
Productivity is something executive boardrooms place an importance on. Reduction in absence rates is something executive boardrooms can understand. A growing understanding of the power employee advocacy can have on an organisation’s brand and ultimately revenue is also getting boardroom attention. Creativity may be a step too far for some board members – but this should not be dismissed either. In futurist Daniel Pink’s 2005 book ‘A Whole New Mind’ the author cited the movement from the ‘information/knowledge age’ – an era all of the readers of this article will and are living through – to the ‘conceptual age’, an age when creative thinking will be the difference in company and individual performance.
A radical rethink is needed however if organisations are to realise these potential returns. Simply offering more flexible benefits, pension seminars, free fruit on the corner desks, or ‘Mindful Monday’ classes is not the answer. A responsibility exists to effect the behavioural change needed in people to support them in making better wellbeing decisions. At the heart of this is a rethink in how benefit programmes are designed and communicated. Greater personalisation is the key but our own research points to the fact that traditional views of the demographic information used to segment the workforce do not have a significant impact on individuals propensity to save money or looked at another way, do the right thing. The individual, their key motivators and most importantly, their personality all play a more significant role than whether they are a millennial or Generation X.
Understanding of the links between employee wellness and business performance is clear. To move forward an analysis on the returns is needed to ensure buy-in at board level. But in a world where the cross-over between work and personal lives is greater than ever, perhaps a simpler argument has more poignancy – investing in your people’s wellbeing is simply the right thing to do.