7 mins. read

How employee health affects business performance

Employee health and performance Perci Health

Key takeaways

  • Employee health impacts various aspects of business performance: Productivity, job satisfaction, presenteeism, motivation, recruitment, sickness and profitability are all affected.
  • Employee health refers to more than physical status: Employee mental health has a significant correlation to business performance and costs UK businesses up to £56 billion a year.
  • Employers can support employee health and wellbeing to improve performance: A comprehensive employee wellbeing strategy that utilises employee wellbeing initiatives such as cancer care and mental health support can help achieve this.

An increasing number of employers are taking steps to support health and wellbeing in the workplace, with 72% placing greater priority on this since of COVID-19. While this is the right thing to do from a people-centric perspective, businesses also hope to see an improvement in employee and business performance as a result.

So, how does employee health affect business performance? In this article, we discuss the relationship between the two and consider how employee health impacts aspects of business performance.

What is the relationship between employee wellbeing and performance?

The relationship between employee health and business performance is significant and well-documented. Broadly speaking, good employee health improves business performance and vice versa. However, looking at this correlation more closely, specific aspects of employee health have been shown to link to different aspects of business performance.

For example, research suggests that good mental health can improve an employee’s cognitive flexibility and their ability to problem solve. It also indicates that a more positive mental state enables employees to build better interpersonal relationships, which enables them to seek support and knowledge from others more effectively.

Another study examined cancer patients returning to work and their productivity in the first year after cancer treatment. It found that physical symptoms, mental health issues and negative illness perceptions related to cancer were linked to higher levels of presenteeism and lower productivity.

Which aspects of business performance does employee health affect?

Employee health has a direct and indirect impact on various aspects of business performance. For example, poor employee mental health costs UK businesses up to £56 billion a year, up 25% from 2019. Presenteeism is the biggest contributor to this cost, however, it is employee turnover that is responsible for the overall increase.

There are many other ways employee health affects business performance, but some of the most widely recognised are:

Productivity

The link between employee health and productivity has been widely studied. When employees are physically and mentally healthy, they are more likely to have higher energy levels, focus and cognitive abilities. Good health also allows employees to perform at their best, leading to increased productivity.

Motivation

When employees are healthy, they generally feel better and have higher levels of wellbeing. Good health enables employees to approach their work with enthusiasm, energy and a positive attitude. Conversely, poor health can result in low motivation and reduced commitment to tasks.

Sickness

Employee health directly impacts the frequency and duration of sickness. In 2022, approximately 185.6 million working days were lost due to sickness, injury or employee health issues. When employees are in good health, they are less likely to experience frequent illnesses, resulting in fewer sick days. This, in turn, contributes to maintaining productivity levels and minimising the costs associated with sick leave. This is significant given the estimation that 2 to 16% of an employer’s annual salary bill is attributable to employee absence.

Presenteeism

Presenteeism refers to employees being physically present at work but not fully engaged or productive due to health issues. Up to 80% of British employees say they continue to work when unwell. Poor employee health can lead to increased presenteeism, where employees may struggle to perform at their best due to illness, chronic conditions or mental health challenges. This can significantly impact overall productivity and performance. It also has financial implications, with presenteeism as a result of poor mental health alone costing the UK economy £15.1 billion annually.

Recruitment

Employee health can influence recruitment efforts. Organisations that prioritise employee health and wellbeing are often viewed as attractive employers. Candidates are more likely to be drawn to companies that demonstrate a commitment to promoting and supporting employee health. A positive reputation in this regard can enhance recruitment efforts and help attract top talent.

Job satisfaction

Employee health is closely linked to job satisfaction. When employees are in good health, they tend to experience higher levels of job satisfaction. Good health enables employees to perform their tasks effectively, experience less stress, and have a better work-life balance. All these factors contribute to higher job satisfaction levels. The link between job satisfaction and health appears to be cyclical. Some studies suggest that employees who have better job satisfaction feel healthier and are less likely to experience health deterioration.

Profitability

Employee health can have a significant impact on an organisation’s profitability. Healthy employees are generally more engaged, motivated and productive. Reduced absenteeism, fewer sickness-related costs, and improved overall performance contribute to increased profitability. Moreover, organisations that prioritise employee health and wellbeing often foster a positive work environment, which can lead to higher employee retention rates and attract customers who appreciate socially responsible businesses. Studies also reveal that companies that prioritise employee health, wellbeing and safety experience better stock performance.

How to support employee health and wellbeing

Knowing how to support employee wellbeing isn’t always easy, especially given that employee health and wellbeing are multi-faceted. However, you should always let the demographics of current employees and their unique needs guide you. Creating an employee health and wellbeing strategy will help determine the support you provide and how you deliver it. There is a huge range of employee wellbeing initiatives that can you can implement, all of which cater to different aspects of employee health and wellbeing, examples of which include:

  • Physical: gym membership, health insurance, cancer care, dental and eye care, health screenings
  • Mental: counselling, CBT, app subscriptions, support groups
  • Financial: debt advice, retirement planning, discounts and vouchers, cost of living support
  • Social: meet-up groups, paid volunteering opportunities, community initiatives

You can join the ever-increasing number of employers supporting employee health and performance with carefully considered employee benefits. Perci Health helps organisations provide cancer support to employees affected by cancer. Our virtual support clinic offers an on-demand service where users who sign up can connect with specialists including dieticians, psychotherapists and cancer nurses. See how it works by booking a demo.

References

‘A brief history of the 8-hour workday, which changed how Americans work’, cnbc.com, July 2023, https://www.cnbc.com/2017/05/03/how-the-8-hour-workday-changed-how-americans-work.html

‘Employee wellbeing in a changing working world’, cbi.org.uk, July 2023, https://www.cbi.org.uk/media/3tib0vfs/12791_cbi_economics_vitality_report.pdf

‘Relationship between Employee Mental Health and Job Performance: Mediation Role of Innovative Behavior and Work Engagement’, ncbi.nlm.nih.gov, July 2023, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9180763/

‘Return to Work and Work Productivity During the First Year After Cancer Treatment’, ncbi.nlm.nih.gov, July 2023, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9039203/

‘Poor mental health costs UK employers up to £56 billion a year’, deloitte.com, July 2023, https://www2.deloitte.com/uk/en/pages/press-releases/articles/poor-mental-health-costs-uk-employers-up-to-pound-56-billion-a-year.html

‘Mental health and employers: The case for investment – pandemic and beyond’, deloitte.com, July 2023, https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consultancy/deloitte-uk-mental-health-report-2022.pdf

‘Sickness absence in the UK labour market: 2022’ ons.gov.uk, July 2023, https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/sicknessabsenceinthelabourmarket/2022

‘Costing Sickness Absence in the UK’, employment-studies.co.uk, July 2023, https://www.employment-studies.co.uk/system/files/resources/files/382.pdf

‘Presenteeism: 80% of UK employees work when sick’, workinmind.org, July 2023, https://workinmind.org/2019/10/17/presenteeism/

Managing presenteeism: a discussion paper, centreformentalhealth.org.uk, July 2023, https://www.centreformentalhealth.org.uk/sites/default/files/2018-09/managing_presenteeism.pdf

‘Does job satisfaction improve the health of workers? New evidence using panel data and objective measures of health’, pubmed.ncbi.nlm.nih.gov, July 2023, https://pubmed.ncbi.nlm.nih.gov/18311856/

‘Wellbeing Positively Impacts Firm Performance’, forbes.com, July 2023, https://www.forbes.com/sites/colleenreilly/2020/06/09/wellbeing-positively-impacts-firm-performance/