Surely it’s just common sense to know that happier workers are more productive and profitable?
This was a question I was asked by an audience member recently, when talking at an event about the sustainable business case for investing in employee health and wellbeing.
(Charlotte will be launching her white paper “The Business Case for Wellbeing and the Mindful Business Charter” at the free-to-attend Watercooler Event on 7th & 8th May in London, see foot of this article for more information).
While instinctively most people can see the innate truth in the link – especially readers on this site – it does seem that for some decision makers there is often a significant disconnect. This is between 1) what is perceived to be the best way to run a profitable business and 2) what research – real world, reliable, and replicable research – tells us.
Risky business: pressure to remove programmes
Over the past few months it has been clear that many professionals in HR, especially those with responsibilities for DEI, have been looking at developments on the global political stage with concern.
Pressure to reduce, or even remove programmes that promote diversity and inclusion, seem to focus on the idea that they cause increased business risk, are a distraction from hard work and are somehow holding businesses back.
But these ideas do not have any basis in fact.
Throwing the baby out with the bathwater…
Conversely, it seems that organisations that follow them could end up “throwing the baby out with the bath water.”
This is why looking at the research that shows how much better businesses do financially when they reduce employee stress is so important.
Especially when viewed through a risk lens, the evidence is very clear: positive employee wellbeing can reduce needless expenditure and increase revenue when done correctly.
Legal duties and costly mistakes
Employers who want to avoid costly employee tribunals should be careful to heed advice from the Health and Safety Executive, which states that:
“Employers have a legal duty to protect workers from stress at work by doing a risk assessment and acting on it. You should assess the risk of stress, and its impact on mental and physical ill-health, in the same way as you assess other work-related health and safety risks.”
In the UK employers can be held liable for the negative impacts of stress due to the workplace in the same way as they would be for a physical workplace injury.
Stress can lead to costly mistakes
Of course, risk to the business doesn’t come just from employees who have been made unwell. Consider mistakes made by overly-stressed employees. A recent report showed that highly stressed employees are eleven times more likely to make mistakes that “miss deadlines, compromise quality or compliance standards and put their organisations at risk.”
Stress also causes lapses in ethical judgement, perhaps due to it creating a reduced ability to analyse information, or self-regulate. Almost half of respondents to a study conducted by The American Society of Chartered Life Underwriters, The Chartered Financial Consultants, and The Ethics Officer Association, admitted to unethical or even illegal acts being carried out due to job pressure.
Avoiding risky exhaustion
Business indemnity insurers are certainly taking note of these issues and making it clear that employers can “avoid significant claims by working to change its culture in ways that discourage employees from working at times when they are more prone to being exhausted or distracted.”
Considering not only the costs of rectifying mistakes, increased premiums and potential court cases, there is also the risk of reputational damage to contend with, both in terms of your reputation as an employer, and as a provider of services, if mistakes are being made that are seen to be a result of inadequate concern for wellbeing.
How to improve things
Having studied over 120 sources in a white paper that will be launched at the MAD World Watercooler event on this topic, it’s clear that businesses that prioritise employee wellbeing—by improving workplace practices, implementing preventative measures to safeguard employees, and reducing avoidable stress—not only foster healthier and more productive environments but also achieve greater profitability.
By undertaking systemic change that reduces unnecessary stress, as well as avoiding the costs outlined above, we can reduce absence, presenteeism, and burnout, while also increasing productivity, collaboration, creativity and revenue – with businesses who follow these models outperforming the stock market by 57%.
We have the “common sense” and the data to support it. We have the figures to show what happens when we don’t take employee wellbeing seriously, and the evidence to show how we can excel when we do.
All we need to do now is to join it up to make it happen.
About the author
Charlotte Clegg MSc. is a BACP registered psychotherapist with experience of wellbeing and therapy provision in many sectors including retail, corporate, and charitable sectors. She has a keen interest in research, bringing an evidence based approach to her work both in private practice, and in her work as Community Engagement Executive for The Mindful Business Charter, a charity looking to reduce unnecessary stress to create healthier more productive workplaces.
You can hear Charlotte speak more on this topic at The Watercooler Event, on 7th and 8th May 2025at ExCeL in London, which is Europe’s leading trade show, with free-to-attend content, dedicated to creating workplaces that empower both people and business to thrive. She will be launching her white paper “The Business Case for Wellbeing and the MBC” at the Watercooler Event.
You can find out more and register to attend here.
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