The financial impact of Covid-19 on the UK economy has been significant. A second quarter of economic decline in August signalled that the UK was in a recession for the first time in 11 years. And in addition to this, the Office for Budget Responsibility puts the nation’s coronavirus bill at more than £192bn so far, as it protects the NHS and gives financial support to businesses and workers.
Fortunately, the Bank of England and several other indicators are suggesting that a v-shaped recovery is becoming increasingly likely. However, while this news is positive, the economic recovery will not be a success if there is not one in wellbeing too.
A healthy recovery
As the UK recovers, a critical element in how well businesses respond over the coming months – but one that is often overlooked – is the role of employees and how workforces are supported from a wellbeing perspective going forward.
The pandemic has put heavy pressure on mental and physical health and companies have an opportunity to stop a dangerous deterioration in these areas. The Office for National Statistics reports that one in five adults have experienced some form of depression since Covid-19 appeared and that 84 per cent of adults admit to feeling stressed or anxious.
Remote working, mounting job fears, home schooling pressures and ongoing health concerns have combined to create new employee wellbeing-related worries that business owners must be attuned to and fix.
During the recession of 2008, the number of businesses wanting to create wellbeing strategies started to increase. These strategies, as a recent study from London School of Economics found, can really help motivate teams, increase productivity, and improve retention. And in turn, these areas boost the balance sheet.
With productivity linked to absence and our research finding that 74 per cent of HR leaders attribute greater physical health and wellbeing to a fall in absence, improving physical wellbeing is highly important. The average UK company with 150 employees spends £120,000 a year on absence. However, when combined with presenteeism – a growing issue where employees are working but are not happy and struggling to concentrate – the cost to the UK economy is £81bn a year.
The other key area is staff retention. Oxford Economics estimated that the cost of replacing an employee is more than £30,000 per person.
With these costs it is clear that employee wellbeing must become a central and strategic business priority so that companies and employees can work together to overcome the extraordinary circumstances we are in.
Those already taking action will benefit
Thankfully, we are already seeing evidence that organisations are reacting to the current challenges by proactively navigating their response. Research undertaken by Westfield Health for our report, Divided Together, shows that 35 per cent of HR leaders across the UK have increased their wellbeing budgets in the last few months, with the same percentage planning to continue investing into the future.
The pandemic has tested companies in all areas of their operation including workplace wellbeing. Some have embraced this challenge, altered their approach and will benefit as a result.
With the financial advantage of better retention rates and higher productivity there is a powerful argument for seeing wellbeing as a core, strategic element handled across all departments, and not just leaving it to the HR department, to help strengthen a company. With the deep connection between wellbeing and business performance, a v-shaped economic recovery will be more successful if there is also a v-shaped wellbeing recovery.
Vicky Walker is head of people at Westfield Health