The ROI of Well-being: What Investing in Workplace Happiness and Well-being Yields

16 May ‘23
5 min
Work performance
Lisanne van Marrewijk
Gecontroleerd door Psychologist Paul Hessels
werkgeluk-verband-winstgevendheid
There has been much discussion around mental well-being and job happiness in the workplace, and for good reason. There is a strong link between the profitability of an organisation and the well-being of the people who work there. Investing in mental well-being will take your organisation forward on many levels.

 

A healthy organisation acts in a way that benefits everyone, from employees and customers to shareholders and the world around us. It is a place where the culture, environment and way of working benefit well-being.. What does this look like in the everyday working world? 

 

Work happiness and profitability

 

Employees who are happy and feel good both mentally and physically are the linchpin of your company. Professor Graham Lowe also underlines this in his book Creating Healthy Organisations

 

There exists a reciprocal relationship between individuals’ well-being and job satisfaction and the performance and profitability of an organisation. When individuals are content, the organisation thrives, and conversely, it is easier to experience happiness when things are going well.

 

Consider a scenario where the business is facing difficulties, struggling to hire sufficient staff, facing tight schedules, and mounting pressure. In such circumstances, maintaining high morale becomes more challenging.

 

Thus, it works both ways: happy employees contribute to the success of the organisation, and a thriving organisation fosters happiness among its people.

If the organisation is in a slump, it is crucial to be vigilant. Adjust expectations regarding productivity, output, and energy levels. Failure to do so increases the risk of entering a downward spiral that will only produce the opposite results.

 

External pressures and internal resilience

 

As an organisation, you want to find that sweet spot; the point where challenge (external pressure, which a company imposes on an employee) and carrying capacity (internal resilience, the amount of pressure someone can handle) are balanced.

 

On the one hand, it is important to increase employees’ resilience and, on the other, to ensure that external pressure remains manageable. Finding the link between people, pressure and performance is the key to success.

work happiness-connected-profitability

The ROI: Well-being impacts work performance and happiness

 

McKinsey research shows that over 60 per cent of employees face mental challenges at some point. This means that a large proportion of your employees will also struggle with this, directly or indirectly. 

 

And how someone feels goes hand in hand with how someone performs. Someone who, for whatever reason, struggles with mental challenges is not as energetic, sharp or productive as someone who feels better about themselves. Our well-being impacts our work happiness, engagement, and performance. 

 

👉 Also interesting: Why investing in mental well-being attracts talent (and how to do it

 

Those mental challenges can ultimately lead to lost productivity, absenteeism and employee turnover. Deloitte research shows that 30 per cent of total absenteeism is related to mental well-being and that 70 per cent of employees go to work despite reduced mental well-being, which, in turn, leads to a loss of productivity (presenteeism).

 

Over half of the employees eventually leave the company they work at  because of their mental well-being and lack of proper guidance

 

The cost of reduced mental well-being 

 

These statistics don’t lie. Reduced mental well-being affects organisations’ work performance and profitability and costs organisations money. As much as 25 per cent more in 2021 than in 2019.

 

Deloitte research shows that a company spends an average of €1,500 to €2,500 per employee per year on the consequences of poor mental well-being. That amounts to an annual total of €59 to €63 billion.

 

 

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Investing in mental well-being

 

People with mental challenges do not experience their work in a positive way. McKinsey’s research shows that employees are four times more likely to leave as a result of a negative work experience.

 

Half of employees also report feeling burnt out and, according to Deloitte, they expect to see changes in how their work is organised. Investing in mental well-being as well as a positive work experience is thus essential to keep employees engaged, happy and motivated, and prevent long-term turnover. 

 

American Jacob Morgan, consultant and best-selling author on the future of work, emphasises the importance of a positive employee experience on employee happiness at work.

 

Expert research shows that organisations that invest in a positive environment, culture and approach not only experience 40 per cent less turnover, but also make four times more profit than those that do not. The key aspects of that positive experience? Humanity, passion, fun and challenge.

 

Getting started with mental well-being

 

Investing in mental well-being pays off. It makes all the difference to talent acquisition, retention and performance. Make sure you have the right programme solutions in place to guide your employees in their mental well-being and work performance and open the conversation on mental well-being.

 

Give your employees room to develop themselves and build mental resilience with OpenUp. Book a 20-minute demo.

 

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