3 reasons why you need to invest in creating a healthy organization

We get it: Running a business is a series of tough decisions about where to allocate limited resources, whether those resources be people, time, money, or anything else. So there needs to be a compelling business case for why you should invest those precious resources in creating a healthy organization. I’ll give you three reasons (and advice) to get started this year.

To start, let’s talk about what a “healthy organization” really is. The Josh Bersin Company published its Healthy Organization Maturity Model in 2021 and identified four different types of organizations.

Level 1 was the most common amongst the organizations they surveyed – these organizations view employees as “workers” and provide little to no leadership support in areas of employee well-being beyond the minimum health and safety measures required by law. I’m sure we’ve all worked for an organization like this at some point in our careers.

The majority of organizations fell into either Level 2 or Level 3. In Level 2, organizations were putting mental health training for leaders and employees in place, adding different types of practitioners to their mental health benefits coverage, and maybe providing mindfulness lunch and learns or subsidizing gym memberships. These are traditional downstream initiatives designed to help employees cope with the stress, depletion and burnout they are already experiencing.

As organizations move into Level 3, they begin to think more about the impact that work is having on employees. Rather than providing employees with tools to manage their stress, these organizations are attempting to remove or change the stressor at the source. These are the upstream solutions that combat stress and burnout before they emerge.

Level 4 organizations are those that have embedded the value of employee well-being deeply into their organizational culture, where that value frames each decision the organization makes. Their well-being strategy is integral to, not separate from, the organizational strategy. These organizations have all leaders actively involved in modelling and supporting healthy employee behaviours.

Our latest YMCA WorkWell Workplace Well-Being Report emphasizes that upstream solutions need to be our focus. Seventy-three per cent of employees are reporting experiencing burnout “sometimes” to “very often” with a concomitant reduction in mental health and overall well-being scores; in other words, the more often someone experiences burnout, the worse their mental health and overall well-being.

When asked what they needed to support their well-being at work, employees identified the following:

1. better work-life balance
2. a more manageable workload,
3. to feel personally appreciated,
4. clearer communication from leadership. Note that all of these needs would fall under levels 3 and 4 in the Maturity model above.

So what is the business case for investing in creating a healthy organization?

1. There is a significant cost to doing nothing

Our YMCA WorkWell Workplace Well-Being Report identified widespread and pervasive mental health challenges across all demographic groups. Nearly every group had an average mental health score within a 5-point spread between 55 and 60 – scores that fall within the “unhealthy” category of mental health. This is how your employees are feeling when they are showing up to work each day.

Workplace stress is the leading cause of employees’ mental health issues. A Deloitte Insights report highlighted the rising costs of doing nothing to address this issue: The proportion of days lost due to mental ill health is increasing rapidly and is the fastest growing disability claim type. Mental health claims account for approximately one-third of claims but 70% of disability costs, according to Deloitte, as mental health leaves tend to last longer and are more likely to result in a subsequent leave.

Furthermore, presenteeism – where employees are present at work but aren’t capable of performing at their best – is also growing rapidly, and may cost more than three times as much as absenteeism, by Deloitte’s estimates.

Doing nothing may also be costing you in terms of employee retention, especially in the era of the Great Resignation. Thirty-four percent of our respondents had started a new job during the pandemic, and another 25% of respondents were seriously considering leaving their current employer in the next six months. The number one reason for leaving (37% of respondents) or thinking about it (56% of respondents)? Personal well-being! This category included things like unmanageable workload, feeling burnt out, lack of appreciation, and desire for more workplace flexibility.

We can’t ignore employee well-being if we want to be able to recruit and retain top talent.

2. Show me the money!

It’s natural to want to see a return on your investment (ROI) and to know that the money you’re spending is making a difference. The good news is that research has shown a positive ROI for mental health workplace programming; however, it takes some time for programs to show that positive return. The Deloitte study indicated that achieving positive ROI can take three years or more, but median yearly ROI for programs in place for 3+ years is $2.18 for every dollar invested. In this study, ROI was measured as absence-related savings over cost of programs plus increased benefits costs. Since the benefits of mental health programming go beyond addressing absenteeism and disability claims, it is likely the positive return on impact in terms of employee well-being, retention, engagement, and other key factors is even greater.

Benefits of wellness programming also increase when those programs support employees from the promotion of well-being and identification of psychosocial risk factors to intervention and care.

Finally, The Josh Bersin Company found that companies at Levels 3 and 4 of the Maturity model significantly outperform their peers. They report these companies are:

• 11x more likely to have low levels of absenteeism
• 220% more likely to be meeting financial targets
• 2x as likely to be ranked as “great places to work”
• 540% more effective at attracting top talent

3. (but really, the most important one): It’s the right thing to do!

We’ve talked about the cost of doing nothing, and we’ve shared data that supports ROI. But, really, none of that should be what drives your decision to invest in employee well-being. We can talk about the benefits of creating a healthy organization all day long, but it is 2022. Employees expect their employers to care about them as human beings – and they should! The days of transactional employment relationships are over; the pandemic has simply sped up that trend towards obsolescence.

Are your employees truly your most valuable resource? Does your behaviour as an organization match your beliefs? We need to show our employees that we authentically care about them as human beings first and as employees second. We do this by making every effort to ensure work itself and the environment in which it is done are as healthy as possible. If your employees don’t feel that you authentically care about them, you lose your ability to truly engage them.

I hope this post has inspired you to think deeply about your investment in creating a healthy organization. It is well worth the time, money and energy spent. If you’re ready to get started, we are ready to help. Book a free 30-minute consultation today.