The hidden productivity gap

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To increase productivity is a challenge for government, business and organisations, public and private. The latest figures show a less-than-healthy picture, with the UK economy losing an estimated £81 billion each year through ill health-related absence and presenteeism.

However, productive solutions to presenteeism are possible.

It is often poorly understood that having a workforce not only present at work, but performing at maximum capacity gives considerable gains in productivity.  Employees not performing at their best are displaying ‘presenteeism’, which is a greater contributor to poor productivity than absence.  Presenteeism has many causes including poor mental health, poor organisational culture and, indeed, external causes which arise outside of the workplace.

Presenteeism is a challenging concept because it is difficult to quantify – you can only really assess whether individuals are operating at less than optimal levels by asking them. That is precisely what Britain’s Healthiest Workplace (BHW) does through a carefully-calibrated national survey of employee wellbeing in the UK.

The findings are important for employers because they highlight both the magnitude of the problem and the potential for targeted interventions, especially in the area of mental health support and improvements in workplace culture.

Widespread, but modifiable

BHW, founded by Vitality, has now been running for seven years. The work involves a broad partnership of academic and industry experts – the results are analysed by RAND Europe and the initiative is overseen by an independent advisory board and the Financial Times, which publishes the results. It has surveyed more than 158,000 employees in 430 companies and other organisations, generating more than 20 million data points on the work environment, employee health and work performance across a broad and representative spectrum of sectors, regions, organisational sizes and levels of employer sophistication around employee health.

Corporate conditions may exacerbate health issues in the first place. Photograph: iStock/fizkesCorporate conditions may exacerbate health issues in the first place. Photograph: iStock/fizkes

The data showed that the equivalent of 23 working days were lost per employee in the UK in 2014 due to health-related absence and presenteeism; by 2018, this figure had risen to a staggering 35 working days. Put differently, if all work impairment was incurred at the start of the year, employers would have to wait until February 19 before any productive activity began!

This trend is alarming, but most striking is the fact that presenteeism is the most significant driver of productivity loss, accounting for 55 minutes of every lost productive hour in 2018. Thankfully, this is something employers can change. The BHW research suggests that almost three quarters of productivity loss is determined by factors which are at least partly modifiable, driven largely by workplace stress, lifestyle choices and their associated risks. In the survey, companies which made targeted investments in the health and wellbeing of their employees show 30 per cent to 40 per cent higher productivity as a result.

A function of workplace culture

The impact of workplace culture on health and mental wellbeing cannot be underestimated. The National Institute for Health and Care Excellence (NICE) guidance of 2015, looking at workplace policy and management practices to improve health and wellbeing of employees, made recommendations that focused on organisational culture, leadership support of health and wellbeing, and line manager support and training to achieve healthy and effective employees. These recommendations were supported by a study by Nicholas Baer assessing the physical and mental health of 1,540 Swiss middle managers in relation to the mental and physical health of the employees they managed, which found that employees managed by healthy managers had better health.

Presenteeism requires a multi-pronged approach in which a healthy workplace leads to healthier and more productive employees. Photograph: iStock/sertsPresenteeism requires a multi-pronged approach in which a healthy workplace leads to healthier and more productive employees. Photograph: iStock/serts

But have we made enough progress? Research in 2016 by Stanford University’s Graduate School of Business paints a bleak picture. It concluded that workplace stresses are associated with 120,000 annual deaths, making it the fifth leading cause of death in the United States.

Companies need to understand that they are communities, and the health and wellbeing of their employees are central to organisational success. This means tackling challenging questions not only concerning the mental and physical health of employees, but the corporate conditions that may be exacerbating such health issues in the first place.

New thinking for the 21st century

Presenteeism is detrimental not only for employers, but also the employees who trudge through each day feeling unable to perform at their peak. It is a challenge that shows no sign of abating, with an increasing number of employees suffering: 42 per cent of employees in BHW reported being affected by presenteeism in 2018, up from 29 per cent in 2014.

Our research has demonstrated both that targeted workplace health and wellbeing programmes can make a difference, and that there is a clear economic case for employers to invest in such approaches. Well-performing companies identified in the BHW initiative benefit from 19 fewer lost productive days per employee per year compared to their poorer-performing counterparts.

What are the common features of these successful programmes, which can help other businesses make a difference? Our research points to: an authentic culture of health and wellbeing created by the board and executive team, delivered through capable line managers; and workplace programmes and interventions tailored to the unique and complex needs of each employee population, with the use of incentives (supported by data collection and evaluation) to boost employee participation.

By making the programmes relevant to the needs of the employee, employers can naturally support higher rates of awareness and participation with the interventions they offer.

In the 20th century, occupational hazards centered on the dangers of the physical environment, such as from plant and machinery, and on the physical illnesses caused by the workplace. In the 21st century, our greatest occupational hazard is instead mental ill health in the workplace, driven by culture and leadership.

Just as occupational safety standards emerged to protect vulnerable employees in decades past, the health and wellbeing of employees today necessitates robust – and eminently more complex – defences. Presenteeism in the 21st century requires a multi-pronged approach, in a virtuous cycle in which a healthy workplace leads to healthier and more productive employees. This is the gold standard to which we all need to commit.

Professor Dame Carol Black is advisor on Health and Work, NHS Improvement and Public Health England

Shaun Subel is director of corporate wellness strategy, VitalityHealth in the UK


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