Stephen Bevan: Workforce health as a business asset?

The health and work landscape in the UK is changing rapidly. Compared with a decade ago, more employers have come to recognise that they need to provide support for employees who experience poor health. This has had a number of consequences.

First, what gets defined as a health issue has undergone something of a transformation with a recognition that a narrow medical model might not be sufficient to embrace the wider family, domestic and financial challenges, which life in general throws at working-age people.

Second, there is more of an appetite for supporting individuals to take more control over their health and wellbeing, as well as a shift away from wholly paternalistic interventions towards those that promote lifestyle and behavioural change.

Third, more organisations are looking to develop both a moral and business case for investing in workplace health interventions, informed by a recognition that supporting employees in these ways is the right thing to do and that a sound business investment is an appreciating asset.

This is not to say that the business case for investing in workforce health has become any less important, especially among those organisations that still need to be convinced that the investment can ever yield a worthwhile return or those that retain the conviction that, beyond their legal duty of care, the health of their employees is none of their business.

Sadly, even employers that do take workforce health seriously enough to dedicate resources to promoting it still find it hard to evaluate the impact of their efforts and to establish whether they get any kind of return on their investment (ROI). So how should we try to persuade senior managers in the more recalcitrant organisations that they will benefit from investing time and resources in workforce health?

Well, the old arguments still carry a lot of weight. For example, sickness absence is still a cost that most organisations would like to reduce and, although the headline rate of absence has been falling, the proportion of sick days that fall into the long-term category is growing at the same time as the workforce is ageing. This means that, in addition to coughs, colds and other minor illnesses, more absences in the next few years will be attributable to chronic illnesses.

We also know that ill health reduces worker productivity, not just when they are off ill but also while they are ill but still at work. This so-called presenteeism or reduced work effectiveness is widespread and can, in some circumstances, be more costly than absence.

A business factor that has received less attention until recently is the investor perspective. Serious work is now being done, especially in the US but now in Europe, to develop employee health metrics that show potential investors the extent to which an organisation has a competitive advantage or is sitting on a latent risk of poor health that might affect its performance or sustainability. This means that workforce health and employers’ efforts to improve it can be recognised by investors as a tangible asset that will register in an investment appraisal. In knowledge-intensive businesses, where human capital is a differentiating factor, it is not hard to see that investors would like some insight into the state and sustainability of the physical and psychological wellbeing of the workforce. It would be unhelpful, of course, to focus exclusively on the mitigation of risk and it seems to me that an asset-based view of workforce health will soon become one of the standard metrics that thoughtful investors will ask for. Now is the time to get ready.

Professor Stephen Bevan is head of HR research development at the Institute for Employment Studies (IES)