The Economics of Wellbeing at Work

Understanding data and building the business case for wellbeing.

I have heard so many conversations on the economics of wellbeing recently. As a workplace wellbeing strategist, this is a thrilling development in the narrative of wellbeing at work! I believe we will look back on 2023 as a turning point in the evolution of the measurement of workplace wellbeing. The business case for investment in workplace wellbeing is often focused on the costs of ill health or sickness absence, or return on investment data for specific interventions, but we are at an exciting juncture where various disciplines of health and wellbeing, and their measurement, are starting to combine. Public health, occupational health, employee rewards and benefits, health and safety, personnel and demographic data, engagement and culture surveys, workplace health and wellbeing interventions, health and wellbeing apps, developments in the measurement of wellbeing in buildings through environmental quality and occupant satisfaction surveys, and the list goes on. So many potential streams of data to consider, but where to start? Developing the business case can be an overwhelming task. In this newsletter I will reflect on my own journey with wellbeing data, how I have seen the changes in practice, and my top tips for organisations.

Wellbeing is serious business. How satisfied we feel with our lives can impact our health, how productive we are, the stability of our family lives, educational outcomes, and even how we vote¹. So it is no wonder economists, policymakers and governments are interested in the topic, and workplaces show greater awareness of potential commercial benefits. The growing body of research in this area offers significant insights to practitioners of workplace wellbeing. Think tanks such as What Works Wellbeing² have been focused on the synergies across disciplines for years but it’s only recently I’ve noticed the discussion become mainstream.

When I started out in my health and wellbeing career I assumed that companies would want to support their employees simply because it was the right thing to do. I never anticipated a key part of my job would be writing proposals; persuading, negotiating, and justifying wellbeing spend. This may seem slightly naive given the 1.5 years of an economics degree I completed, before switching to a sport science degree; I was certainly aware of the importance of a good business case. My favourite modules, Sustainable Development, and Environmental Economics, did cover elements of health, but at that time workplace wellbeing did not feature in any of the modules. Incidentally, the Econometrics module on that degree course was not good for my own wellbeing (too many equations for my liking) and I dropped out to pursue a career in health and wellbeing. It wasn’t until years later that the interest that led me to pursue an economics degree in the first place was reignited through the work of Professor Sir Michael Marmot on health equity and Lord Richard Layard on the economics of wellbeing.

Working as a personal trainer I met so many people from a range of different jobs, many of whom set fitness goals to address issues caused or made worse by work. Those who were office-based were trying to counteract sedentary lifestyles and many had tight hips and shoulders from sitting all day, others in more manual jobs had knee or back issues from being on their feet. Many were overwhelmed and just wanted to talk or work off frustrations in the gym. My work at that time was focused on supporting individual physical health but as my career evolved and became focused on holistic health and wellbeing in community groups and organisations, I quickly learned, that while many organisations do want to support their employees, they often don’t know where to start or where to invest their often limited budgets. It became, and still is, my job to take individual employee experiences, overlay quantitative data to demonstrate risks and opportunities, and present the business case to organisations. Fortunately, the MSc in Workplace Health and Wellbeing I studied at the University of Nottingham provided a good grounding in evidence-based practice in health and wellbeing.

We are in a boom time for research on workplace health and wellbeing. Researchers, and organisations, are looking at a variety of different health and wellbeing drivers and associated interventions to see what the issues are, what works, and what we should be doing more of, as well as striving for the financial returns data organisations crave. For my Occupational Health Psychology and Management Ph.D., I was fortunate enough to join a team of researchers analysing a large dataset from the Northern Ireland Civil Service, called The Stormont Study, led in the organisation at that time by Professor Ken Addley OBE. This was a workplace wellbeing survey (and psychosocial risk assessment) that looked at a huge range of factors in the workplace. This was not a one-off survey but one that was repeated over the years allowing for longitudinal analysis of the data. So not only did the organisation gain insights each year, it was possible to look at change over time. My Ph.D. supervisor, Professor Jonathan Houdmont, and the team carried out a fascinating variety of research on the data set including extensive investigations on psychosocial factors in the workplace.

My doctoral research looked at the relationship between socioeconomic status (using job type, income, and education from the survey) and various eating behaviours³. At the same time, I began working as Head of Health and Wellbeing for the Royal Mail, with its 140,000 employees. Being involved with the Stormont Study, and my review of the academic literature for my thesis, really brought home to me the need not only for the measurement of wellbeing in the workplace but the need to tailor approaches appropriately so they are accessible to all. Food choice, and access to nutritious foods, may be very different for someone earning £150,000 a year to someone on £25,000 a year, and it may also vary depending on where someone lives. Obesogenic environments and food deserts come up frequently in the research. This is even more relevant with the current cost of living crisis. One-size-fits-all wellbeing strategies and communications, even with the best of intentions, have the potential to alienate groups of employees or not reach their potential. I highly recommend taking a look at the Institute of Health Equity, founded by Sir Michael Marmot, for more information on health equity and the workplace⁴. I read so many of his Whitehall Study papers, for my thesis, looking at social determinants of health in British civil servants. His more recent work on health equity and the cost of living, and his recommendations for business in the report ‘The Business of Health Equity’ provides useful guidance in this area⁵.

It was in the early 2010s that I first heard Lord Richard Layard speak about happiness. He was promoting the reissue of his book, Happiness: Lessons from a New Science, after its first publication in 2004⁶. I had never heard an economist talk so clearly and passionately about the importance of happiness. In fact, I had become incredibly self-aware of how I spoke about wellbeing as I worked to get myself and the wellbeing agenda taken seriously. So often I felt wellbeing was dismissed as not being a business priority, as an add-on or a nice to have rather than a fundamental business priority. To some managers, I was the person they expected to come into the office with a fruit basket and offer an exercise class to tick a box to say we had ‘done wellbeing’! Mentioning happiness as a goal to some leaders could have resulted in eyebrow raises and sniggering! But Lord Layard and his team at the London School of Economics were looking at the economics of happiness and wellbeing, and the research on happiness and work was compelling. The development of this science, alongside other academic research on workplace wellbeing, offers more evidence (not that many of us working in wellbeing needed it) that workplace wellbeing matters.

In 2019 I was invited to present at the All Party Parliamentary Group on Wellbeing Economics by What Works Wellbeing on my work on wellbeing measurement as Director of Health and Wellbeing at Mace Group⁷. The APPG was set up to gather evidence-based practice on wellbeing from diverse groups across government, industry, and communities. I presented at the ‘wellbeing, work, and business’ meeting, and I was a little star-struck to be questioned by members of the parliamentary group which included Lord Richard Layard. At Mace, I was fortunate that wellbeing had become a Boardroom issue. We were working with Robertson Cooper on our data collection, using their academically validated psychosocial risk assessment questions along with other health and wellbeing driver data, productivity, turnover, inclusion, sustainability, and other business metrics. Robertson Cooper is a university spin-off company set up by Professor Sir Cary Cooper and Professor Ivan Robertson and I liked their grounding in academia. The data gave us insights into the drivers of health and wellbeing at global, departmental, and team levels so we could be more targeted in our support and interventions. One size most definitely does not fit all. It enabled us to develop key performance indicators for wellbeing, and identify areas of the business needing support as well as areas of good practice.

I shared a brief overview of our work at the APPG (and I emphasise the word 'our' as I was part of a great team who put this together), alongside speakers from BT, Kellogs, Anglian Water, and a couple of BCorps. We all answered questions from the panel. Lord Layard, and Professor Jan-Emmanuel De Neve from the University of Oxford who was presenting his work measuring wellbeing and productivity at BT, both questioned whether I was able to benchmark our organisational wellbeing data with Office of National Statistics data. This was a useful challenge. We were benchmarking our approach with other global businesses, but not with UK national data through the ONS measures of wellbeing (see below), so in the next survey we added ONS wellbeing questions into the survey so we could gain further insights. I had always found population health data from Public Health England (as it was then known) useful when building business cases. Broadly understanding health trends in a particular area can help inform wellbeing activities if you don’t have internal health data to help you. The national measures of wellbeing offer a similar opportunity, how are employees feeling in comparison with national and local norms? There is also the opportunity to make comparisons with the Global Happiness Index⁸. I think most of us use trend data and headline statistics, such as the 1 in 4 statistic of experiencing a mental health condition in any given year and the Health and Safety Executive's annual trends on work-related ill health and injury when putting together business cases. Adding in wellbeing trend data from the ONS adds another interesting layer to the case.

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Office of National Statistics Measures of Wellbeing⁹

Each of the questions is measured on a scale of 0 to 10, where 0 is “not at all” and 10 is “completely”.

1. Life satisfaction - Overall, how satisfied are you with your life nowadays?

2. Worthwhile - Overall, to what extent do you feel that the things you do in your life are worthwhile?

3. Happiness - Overall, how happy did you feel yesterday?

4. Anxiety - On a scale where 0 is “not at all anxious” and 10 is “completely anxious”, overall, how anxious did you feel yesterday

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It is clear why Lord Layard and Professor De Neve recommended we consider these questions in our survey given the wealth of evidence they have been reviewing. If you haven’t yet read Wellbeing: Science and Policy by Richard Layard and Jan-Emmanuel De Neve then I highly recommend it. Especially if you are building a business case for the investment in wellbeing in your organisation. So many organsations have lagging data such as sickness absence, health insurance claims data, and Employee Assistance Programme usage. These can amount to huge financial losses in organisations so it is understandable why they become focal points. They can be useful to help us understand what people are off sick with or predominant health issues, but they don’t tell us about the overall wellbeing of the workforce. Demographic data is also critical in understanding wellbeing experience. Engagement and culture surveys can add useful insights but very often they are specifically focused on the individual’s feelings about their job and company but they don’t offer insights into why people feel that way or the impact it may have on health. Inequality and discrimination in workplaces can have a significant impact on employee wellbeing, so data on these areas is important as a health and wellbeing driver. When organisations measure psychosocial risk they begin to gather information on the impact of work design and organisation on employees and can gain insights to enable positive change. Other work psychology measures offer even further insights.

The boom in mental health and wellbeing apps and devices for individuals also offers further information on health behaviours and real-time feelings. When this data is combined with occupational health data and the other metrics mentioned above a broader picture forms of the health and wellbeing of the organisation. With national and international health trends from the World Health Organisation, International Labour Organization, Office National Statistics, and many other national and international sources, even further insights are on offer for an organisation. All of this can come together as a comprehensive health and wellbeing dashboard that can offer meaningful insights to the organisation to direct its spend and activities on health and wellbeing. Clearly, if you include every data source I have mentioned above, and all the others I haven’t included, this could become one sizeable dashboard! But the key here is picking what is appropriate and meaningful for the business. A note of caution. We can often become overexcited with numbers and forget to take a critical view - correlation does not imply causation and just because a relationship isn’t found in the data doesn’t mean there isn’t one there, we just might not be asking the right questions or the data may not capturing everyone. For example, underreporting of sickness absence or employees unconvinced by the wellbeing culture of the organisation who may not engage with surveys or programmes.

If the health and wellbeing dashboard is aligned with the organisational structure and other data sources that’s when things become even more exciting! Linking wellbeing and productivity is deemed the pinnacle of success, and it has certainly been done (take a look at the Layard and De Neve book) but what if productivity is not easily measured in an organisation. In a factory or call center, there may be obvious output measures to use. But in many industries, such as professional services or creative industries, outputs may be based on projects or billable hours. In these companies striving for return on investment data that links wellbeing investment with improved productivity (as defined by outputs) may be challenging. This is where customer satisfaction data, sales data, employee attrition and attraction, or other people metrics important or unique to the organisation come to the fore. That’s why organisations must measure what is meaningful to them. It’s great using industry benchmarks to make comparisons with peers and learning from activities across industries but wellbeing needs to be translated, and expressed, in the language and culture of the organisation. Off-the-shelf surveys can be a great start but tailoring these for use allows for more meaningful outputs. The latest Business in the Community report ‘Prioritising People: Unlocking the value of a thriving workforce’, released this week provides a fantastic economic value proposition framework for organisations to use when looking at wellbeing¹⁰.

ESG (Environment, Social, Governance) is an area that many companies are talking about. It is this development that I see as being the turning point for discussions on wellbeing at work. If investors and shareholders start to hold organisations to account, alongside pressure from customers and employees, a proactive and measured approach to wellbeing will become the norm. When I worked at Royal Mail Group we reported on wellbeing activities in our annual reports and through the Dow Jones Sustainability Index. Now there are many more indexes and industry benchmarks that allow companies to demonstrate publically what they are doing on health and wellbeing. In years gone by this reporting was very much outputs based for example how many people engaged with a certain programme or how many people attended training; but some indexes are now interested in impact. What difference are these programmes making? How are you as a company making a measurable impact on your employees, customers, and community? The International Well Building Institute, creators of the WELL Building rating system, have led a great campaign on responsible investment. There is so much information on their website and you can get more information on various indexes and organisational approaches to reporting on health and wellbeing through ESG¹¹. Likewise there is valuable information from the World Economic Forum¹². I will cover this area more in future newsletters as there is so much more to say.

At the start of my blog, I spoke of the individual health experiences I encountered working in a gym. It is important when building a case for wellbeing that these are not forgotten. As a wellbeing professional, I can’t tell you how powerful it is when someone comes to you and says how thankful they are to work in an organisation that cares about them. They may have been able to get an operation quicker because they had access to private medical insurance, rather than waiting for months on the NHS. This may have saved the organisation money in reduced productivity or absence cost, but it also saved that employee pain and distress. Likewise, the employee who tells you how they have improved their health after attending an annual medical or onsite health check. The employee who felt supported returning to work after a long illness. The employee who heard a colleague share their experience of mental ill-health and felt empowered to ask for help. Unfortunately, it is often the negative experiences that find their way to us as wellbeing practitioners, but capturing both sides of the workplace experience is important. These are just a fraction of the stories that sit behind the data but they are an important part of any business case.

Here are my top tips when thinking about measuring wellbeing at work:

1. Audit. Before you rush off to buy in an exciting wellbeing survey or dust off your Excel survey creation prowess, take a look at what you have at the moment. What data do you have available to you? Do you have regular reviews with your health and wellbeing suppliers? Are you acting on the health insights provided by these suppliers or data sources?

2. Contextualise. Health and wellbeing has many layers. Take advantage of external data sources and insights, and how these relate to your workforce. There are many industry, national and international benchmarks available. Consider what matters to your organisation.

3. Talk to people. While I have spent most of this article talking about quantitative data don’t forget to ask employees what matters to them. Focus groups, interviews, and feedback forums are all useful ways to capture experience and often provide insights that quantitative data alone won’t give.

4. Think long-term. To really understand the value of wellbeing investment, you need to be measuring over time. One off surveys can be useful to present an initial business case to the Board for investment. But that business case may be to ask the Board for long-term investment to allow for measurement, monitoring and evaluation over time.

5. Key Performance Indicators - while there might be lots of areas that interest you, work with the business to identify a handful of meaningful measures to monitor performance. This could be a metric that captures improving manager confidence in having conversations on wellbeing, the number of people who attend a specific training course, or improvements in overall wellbeing measured through a psychological measurement scale. Sometimes you need to focus on the quick-wins as well as the long-term goals.

If your organisation needs support presenting the business case for wellbeing and developing your wellbeing strategy do get in touch with me at email@thewellbeingexchange.co.uk.

The Wellbeing Exchange offers consultancy and coaching to support organisations and individuals maximise their wellbeing at work. Find out more at www.thewellbeingexchange.co.uk.

1. Layard, R. and De Neve, JE. 2023. Wellbeing Science and Policy. Cambridge University Press.

2. Whatworkswellbeing.org

3. Eating behaviours and the workplace: the role of socioeconomic and sociodemographic characteristics - Nottingham ePrints

4. instituteofhealthequity.org

5. The Business of Health Equity: The Marmot Review for Industry - IHE (instituteofhealthequity.org)

6. Layard, R. 2011 (2nd Edition). Happiness: Lessons from a New Science. Penguin Group.

7. Wellbeing, Work and Business – All Party Parliamentary Group on Wellbeing Economics. wellbeingeconomics.co.uk/2019/10/17/wellbeing-work-and-business/

8. https://worldhappiness.report/

9. Surveys using our four personal well-being questions - Office for National Statistics

10. Prioritise People: unlock the value of a thriving workforce - Business in the Community (bitc.org.uk)

11. Investing for Health & ESG | IWBI (wellcertified.com)

12. https://www.weforum.org/agenda/2022/04/why-esg-must-include-health-equity/