Is workforce wellbeing the third factor of production?

Stephen Bevan and Cary Cooper argue that UK plc needs to see the workforce’s physical and mental health as a major contributor to productivity

One of the most pressing post-pandemic challenges faced by UK plc will be to restore our flagging labour productivity performance. Traditionally this has meant investment in skills and technology although, even here, the UK record in recent years has not been up to much. But productivity is about much more than equipping well-educated workers with smart IT. We believe that now is the time to harness the physical and mental wellbeing of the workforce as the third ‘factor of production’. This means seeing health as an appreciating asset rather than a burden, and investing in wellbeing as a major contributor to the productive capacity of the UK workforce. Not everyone is persuaded of this argument, of course.

At the height of the pandemic, for example, we heard a senior executive of a large UK employer say that stress at work is a much more effective driver of productivity than any so-called wellbeing programme. We know that he is not alone in this view and that, for a minority, a focus on wellbeing is tantamount to pandering too much to the needs of employees and paying insufficient attention to the impact that ‘stretch targets’ and financial incentives can have on driving up performance. 

It has been known for years, of course, that a certain amount of stress or pressure can enhance work performance, especially if the job holder has control and autonomy in their job and works in a supportive environment. It is when job demands and work intensity become unbearable, and the culture is toxic that performance and productivity starts to decline. Clear targets and high expectations are completely compatible with a mature and, dare we say, compassionate approach to wellbeing at work.

Our recent book, The Healthy Workforce, makes the case that the health of our workers is a bigger driver of productivity than it is a drain on it. In a knowledge-based economy, this does not just mean that traditional measures of industrial output per hour can be improved by investing in workforce health. It also means that the ingenuity, creativity, resourcefulness and energy which a healthy workforce offers can be harnessed to make work both productive and fulfilling. We argue that there are five areas that need to be prioritised to make this happen.

First, we need to invest more in line management capability. Virtually every ‘touch-point’ an employee has with their employer is mediated through their relationship with their boss. A great line manager can unlock any employee’s productive capacity, but a poor one can stifle growth and disengage even the most motivated. Line managers occupy the ‘sweet spot’ where wellbeing and productivity meet. To get the best from it they need to have highly developed emotional intelligence and empathy. They need to recognise that managing people is not a chore but an essential part of managing for high performance, sustainability and health.

Second, employers need to make better use of occupational health (OH) expertise. The specialist knowledge and experience of OH doctors and nurses has come out of the shadows during the pandemic. In a speech in 2020, Professor Dame Carol Black called upon OH professionals to “seize the moment” presented to them by Covid-19 to raise the profile and contribution of the discipline to become a more central part of high-level decision-making. This means having chief medical officers (CMOs) giving regular and unvarnished advice to CEOs and boards. It also means OH expertise being made available to GPs so that they can support effective sickness certification, triage, return to work planning and vocational rehabilitation.

Third, prevention and risk assessment should be given higher priority. It’s time for organisations to embrace the concept of ‘weak signals’ to help mobilise the power of prevention. In a traditional health and safety setting – perhaps in a safety critical sector such as air traffic control, oil exploration, construction or shipping – risk assessment protocols which identify the early signs of a potential accident or catastrophic mechanical or engineering failure are common and rigidly adhered to. The same principles can apply to spotting the early signs of stress at work.

Fourth, we should embrace the lessons of the pandemic. Most employers displayed an impressive level of agility, flexibility, risk-taking, pragmatism and imagination which could never have been harnessed without the workforce being psychologically engaged. It could not have happened without line managers leading by example and without a unifying sense of purpose and trust binding people together. There is an alchemy to the agility and change-readiness of the workforce which enabled organisations to adapt and thrive in a crisis, and physical and mental health have been central to its success.

Finally, we should recognise that inclusiveness and productivity are linked. Living with a chronic illness should not imply that an employee is inherently less productive. Indeed, if we focus more on capacity than on incapacity when thinking about the health and job performance link then it is often the case that those with health challenges are among our most resourceful and conscientious colleagues.

So, if we are serious about harnessing the productive potential of a healthy workforce, it is time to ditch the false dichotomy which says that businesses have to choose between high productivity work practices and those which foster wellbeing.

Stephen Bevan is head of HR research development at the Institute for Employment Studies, and Sir Cary Cooper is professor of organisational psychology and health at ALLIANCE Manchester Business School. They are co-authors of The Healthy Workforce