WELLBEING AND THE IMPORTANCE OF WORKPLACE … · have a moral obligation to make ... shows that around 15% of the UK population suffers from ... Managing sickness absence is a key

WELLBEING AND THE IMPORTANCE OF WORKPLACE CULTURE

© 2016 Great Place to Work® Institute UK. All rights reserved.2

About Great Place to Work®

Great Place to Work® UK is a consultancy specialising

in workplace culture, helping organisations to create

exceptional, high performing workplaces where

employees feel trusted and valued. We help employers

improve recruitment, retention and productivity by

putting employees at the heart of the organisation,

analysing what they think and feel and identifying the

real issues that need to be addressed. Part of a global

organisation, we apply data and insights from over

7,000 organisations across the world to benchmark

individual performance and advise employers on how

to continuously improve employee wellbeing and

engagement and so help build and sustain business

performance. We run the Best Workplace awards to

enable the organisations we work with celebrate their

achievements, build their employer brand and inspire

others to take action. We share our learnings through

our research and publications at national, regional and

global level, as well as through conferences and events.

Acknowledgements: Charles Fair, Consultant

Helen Wright, Great Place to Work®

December 2016

© 2016 Great Place to Work® Institute UK. All rights reserved. 3

Wellbeing and the importance of workplace culture

SUMMARY

There is growing awareness of the impact wellbeing can have on individuals, businesses,

the economy and society, along with growing interest from the investment community

in wellbeing as a leading indicator of financial performance and market value; research

shows that organisations with effective wellbeing programmes outperform the market.

Wellbeing includes people’s physical and mental health and the social/relationship

aspects of their work environment. It is a key driver of engagement so for many ‘employers

of choice’ focusing on employees’ wellbeing is a conscious business decision. But to

be effective wellbeing doesn’t always mean spending money. Recognising people as

individuals, showing appreciation and trusting people by providing flexible working are

no-cost ways of addressing work-life balance, a key driver of wellbeing.

Organisational culture is critical to wellbeing as a culture where people feel trusted,

valued and respected will in itself engender feelings of wellbeing. Organisations where

the culture is poor are more likely to suffer lower levels of wellbeing so, whilst wellbeing

programmes are important, they will be less effective if the organisation’s culture is poor.

The average UK organisation has wellbeing scores of just 53% compared to 84% at

best-in-class organisations like the UK’s Best Workplaces, whose cultures are more

positive and supportive.

What is wellbeing?

Wellbeing goes beyond just ‘wellness’, important as that is. It’s a complex blend of

the physical, psychological, social and relationship aspects of employees’ working

lives. It includes factors such as their working environment and how they get on with

their manager and colleagues. Wellbeing affects not only the lives of individuals but

businesses, the economy and society. There is increased societal awareness of the

non-financial aspects of wellbeing or ‘happiness’ and the impact wellbeing has on

engagement. A number of government initiatives have been launched to try and

tackle the growing issue of the effect poor working environments have on employees’

lives and the cost to the economy through lost working days and increased sickness

payments. These include guidelines published in June 2015 by the National Institute for

Health and Care Excellence (NICE)1 for employers to help improve employees’ health

and wellbeing and the government’s desire to measure how ‘happy’ or satisfied people

are through the national wellbeing survey (launched in 2010). More recently, the LSE

has launched a happiness mapping app called mappiness2 which shows work comes

second in a list of 40 activities that make people unhappy. The first is ill health.

1 https://www.nice.org.uk/guidance/ng13

https://www.gov.uk/government/collections/national-wellbeing

2 www.mappiness.org.uk

‘We believe we have a moral obligation to make the workplace great for people who spend much of their lives at work.’Nick Stace CEO Royal College of Veterinary Surgeons UK Best Workplace

https://www.nice.org.uk/guidance/ng13

https://www.gov.uk/government/collections/national-wellbeing

http://www.mappiness.org.uk


These measures serve as a reminder that when an employer takes on an

employee, he takes on their physical, emotional and psychological baggage as

well as their skills and experience and so has a duty of care for their welfare.

The issue of psychological or mental wellbeing is a growing one. A 2016 NHS study3

shows that around 15% of the UK population suffers from depression or anxiety-related

disorders and this would appear to be on the increase. In 2007, one in four adults

in England (24%) aged 16-74, with conditions such as depression or anxiety, were

accessing mental health treatment. In contrast in 2014, the figure was one in three

adults (37%) aged 16-74. In 2015 a record 17 million working days were lost, costing

the economy at least £2.4billion, according to the UK Statistics Authority. Figures taken

from the Labour Force Survey show that such absenteeism has increased by 25% over

the previous year. Anxiety UK claims many more suffer because they are under pressure

to do so or because they feel they have to for financial reasons – indeed, ‘financial

wellness’ itself is another growing area of concern. Despite growing awareness of the

issues and their impact in the workplace there is still a huge stigma around mental

health. Managers are ill-equipped or lack training to deal with it so people suffer in

silence which affects their productivity and often colleagues around them.

Managing sickness absence is a key responsibility for line managers yet according

to a recent CIPD survey3, most employers are not giving them the tools they need

to manage absence effectively. Less than half train managers to handle short-term

absence, a drop from 52% in 2015. And just 38% said managers are trained to manage

long-term absence (45% in 2015). The survey also found decreases in the provision

of tailored support for line managers. Just a fifth of employers provide tailored support

to manage short-term absence, a drop from a quarter in 2015. Only a quarter offer

tailored support for long-term absence.

Wellbeing is a key driver of engagement. Unlike engagement, it is more likely to be

influenced by local issues (people, policies) and is strongly linked to an employee’s

intention to stay or leave. So if the work/life balance isn’t right, or employees don’t

feel respected, valued or that they are treated fairly, they are more likely to become

demotivated, disaffected and eventually leave the organisation. At best-in-class

organisations like the UK’s Best Workplaces, wellness is more than just a programme.

Best Workplace organisations achieve high levels of wellbeing through three elements

of the employee ‘deal’ or contract:

• A values-driven culture

• Wellness benefits and programmes

• The physical work environment

According to the same CIPD survey4 more than a third of respondents said their

organisation has a wellbeing strategy or programme in place, either standalone or as

part of their wider people strategy. This is compared to 57% who don’t have a formal

strategy, but have either individual wellbeing initiatives in place or act on an ad-hoc basis.

3 https://digital.nhs.uk/article/813/Survey-shows-one-in-three-adults-with-common-mental-disorders-report-using-treatment-services-

4 2016 CIPD and Simplyhealth Absence Management Survey

‘There is a very high focus on individual employee assistance, for those in need of emergency support. As an individual, I am told in no uncertain terms that my family at home always comes first.’ Employee UK Best Workplace

https://digital.nhs.uk/article/813/Survey-shows-one-in-three-adults-with-common-mental-disorders-report-using-treatment-services-

https://digital.nhs.uk/article/813/Survey-shows-one-in-three-adults-with-common-mental-disorders-report-using-treatment-services-


‘We think our culture is possibly the single most important contributor to our success’.Ceri Assiratti Head of People Services Admiral Group Plc. UK Best Workplace

Nearly half of the employers surveyed reported that their organisation has increased

its focus on wellbeing over the last 12 months. When asked the reasons for this, 63%

of respondents said they want their organisation to be a great place to work, 47%

said their organisation believes employee wellbeing is linked to business performance,

and 43% said their organisation believes it’s the right thing to do. Additionally, nearly

two-fifths (37%) of organisations that invest in wellbeing say they have increased

their wellbeing spend over the last twelve months and almost two-thirds (64%) have

improved communications to staff about the wellbeing benefits on offer and how to

access them.

Figure 1. The three elements of the wellbeing employee/employer contract

Measuring wellbeing

We measure wellbeing through our Trust Index© employee survey. This measures the

levels of trust and engagement in an organisation, and what drives them. We use a

number of key statements to measure wellbeing, two of which are:

• ‘This is a psychologically and emotionally healthy place to work’

• ‘People are encouraged to balance their work life and their personal life’.

When we compare the results of best-in-class organisations – those who were ranked

as Best Workplaces in 2016 – with the benchmark of average organisations, we see

a difference of over 30 percentage points in one key measure of wellbeing which is to

have an emotionally and psychologically healthy work environment.

VALUES-DRIVEN CULTURE

PHYSICALWORK

ENVIRONMENT

WELLNESSBENEFITS &

PROGRAMMES


Figure 2. Wellbeing – the difference between Best Workplaces and the average

organisation

Source: Great Place to Work® 2015/2016 survey data and Research Now population survey data 2015

What drives wellbeing?

Our research shows that the top four drivers of wellbeing are:

• Values-aligned and ethical behaviour

• Teamwork

• Work environment and processes

• Recognition

Figure 3. Key drivers of wellbeing

Source: Great Place to Work® 2015/2016 survey data

Values-aligned and ethical behaviour (i.e. by leaders andthe organisation)

TOPDRIVER

Teamwork(i.e. feeling part

of a team)

2NDDRIVER

Work Environmentand Processes

3RDDRIVER

Recognition (i.e. being recognised

and appreciatedby line manager and

the organisation)

4THDRIVER

‘I can be the person I want to be. I suffer from both depression and anxiety. Unlike other places I’ve worked before, this is not an issue. I have the full support of all my colleagues.’Employee UK Best Workplace

0% 20% 40% 60% 80% 100%

Trust Index©

I am able to take time off from work when I think it's necessary

This is a psychologically and emotionally healthy

place to work

People are encouraged to balance their work life and their

personal life

UK’s 101 Best Workplaces 2016

UK National Average


UK National Average


UK National Average


UK National Average

86%

55%

90%

62%

82%

50%

79%

48%

30+ point difference


1. Values-aligned and ethical behaviour

Values and their corresponding behaviours shape an organisation’s culture. A poor cultural fit

or inappropriate, weak or non-existing values can all affect employees’ sense of belonging,

job satisfaction and personal wellbeing. Again, we measure an organisation’s values and

ethics through our Trust Index© employee survey. As Figure 4 below shows, there is a 40+

point difference between Best Workplaces and the average organisation in two key ethical

metrics – managers delivering on their promises and managers keeping their word.

Figure 4. Values-aligned and ethical behaviour – the difference between Best

Workplaces and the average organisation

Source: Great Place to Work® 2015/2016 survey data

2. Teamwork

Teamwork fosters collaboration and co-operation which, as well as being good for

productivity and innovation, can help break down silos, increase employees’ sense of

worth and create stronger bonds between colleagues.

3. Work environment and processes

Having the right tools and efficient supporting systems and processes makes it easier for

employees to do the job they’ve been tasked with and removes or reduces some of the

everyday irritations and barriers they face. These can lead to frustration and stress and

make employees feel undervalued as the perception is the business is not prepared to

invest to make improvements – or doesn’t understand or appreciate the issues they face.

4. Recognition

Feeling valued is a key part of recognition. One of the most common criticisms we

hear from employees about their managers is the lack of recognition they receive,

from the simplest thanks for a job well done to managers not taking an interest in

them as people. Showing simple but sincere recognition costs nothing but the impact

can be invaluable. Examples include a personal note to the employee from the

organisation’s head, or dinner for two for the employee and their partner – which also

tacitly acknowledges that the employee has a life outside work which may have been

disrupted if, for example, the employee has to work long hours or away from home.

0% 20% 40% 60% 80% 100%

Trust Index©

Management is honest and ethical in its business practices

If I am unfairly treated, I believe I’ll be given a fair hearing if I appeal

Management’s actions match its words

Management delivers on its promises

People avoid politics and backstabbing as ways to get things done

Managers avoid favouritism

UK’s 101 Best Workplaces 2016UK National Average







86% 55%

91%53%

86% 52%

82% 41%

82% 40%

79% 40%

75% 38%



‘It’s a great place to work due to the flexibility that the company can offer – for example, if for any reason we need to be sorting out a personal situation at home, we have the ability to work from home without questions due to the level of trust the management and team have for each other.’Employee UK Best Workplace


How line managers affect wellbeing

An employee’s relationship with their manager is a key factor in their wellbeing.

Part of a manager’s role is to encourage an environment where people can flourish,

both personally and professionally. Managers usually have the dual responsibility of

technical and people performance and it is often the people aspect of their role they

fall short on. This can make life for employees difficult or even unbearable, leading to

staff turnover and the inevitable impact this has on the business. It’s no surprise then

that top performing organisations have better managers. Great workplaces have a

high proportion of managers who can balance the technical and ‘soft’ skills and build

trusting relationships with their teams. We see this in the UK’s Best Workplaces where

87% of employees trust the senior management compared to only 47% in average

organisations.

Does size matter?

There is often debate about whether it’s easier for large or small organisations to have

better wellbeing outcomes. Large organisations are seen as having the resources to

fund benefits such as health care, generous maternity and paternity packages and

attractive work spaces for relaxing or socialising. Conversely, small organisations,

while they may not be able to fund such facilities, are more likely to have the kind

of emotionally and psychologically healthy environment where wellbeing can flourish.

This includes the ‘softer’ aspects of the workplace such as team spirit or a sense of

‘family’, where employees feel valued and supported and where flatter management

structures offer more scope for getting involved in decisions and projects. Indeed, not

being involved in decisions that affect them and their working environment can be

stressful for employees. This is one particular area that we measure in our survey. In

response to the statement ‘Management keeps me informed about important issues

and changes’ 87% of employees at Best Workplaces agreed, compared to just 47%

of employees at average organisations.

What are the people and financial outcomes of wellbeing?

Organisations with positive cultures and high levels of wellbeing enjoy:

• Better attraction and retention of talent

• Lower levels of absenteeism

• Higher engagement levels

• Better organisational and financial performance

The average UK organisation has scores of just 53% for wellbeing compared to 84% at Best Workplaces

‘…the support, through difficult times, which I have had personally, along with the encouragement and care that the directors and colleagues take in individual and group wellbeing, is exceptional.’Employee UK Best Workplace


Figure 5. Number of days absence per year – Best Workplaces v. average

organisations

* Source: CIPD Absence Management Survey 2016

** Source: Great Place to Work® 2015/2016 survey data

Why is culture so important to wellbeing?

Culture is an organisation’s greatest sustainable competitive advantage – it’s the

character and personality of your organisation and what makes it unique. It’s the sum

of its values, traditions, beliefs, interactions, behaviours and attitudes. It attracts and

retains talent, drives wellbeing and engagement and ultimately impacts performance.

Business management guru Peter Drucker was believed to have claimed that ‘strategy

eats culture for breakfast’ meaning that an organisation’s culture would undermine

any attempt to create a strategy that wasn’t compatible with it. A culture which is built

on values such as trust, honesty and openness provides the foundation for wellbeing

and engagement to flourish. Many organisations credit their business success to their

culture. As Figure 6 on page 10 shows, best-in-class organisations such as Best

Workplaces outperform the average organisation when it comes to culture, values and

ethics, wellbeing and engagement.

Putting a price on wellbeing

Workplaces with great cultures and high levels of wellbeing and engagement

outperform their peers. Research carried out by Prof. Alex Edmans of the London

Business School5 on Great Place to Work® data showed that Best Workplaces,

organisations with high levels of employee wellbeing, outperformed the stock market by

around 2%-3% per year over a 25 year period. In addition, the importance of wellbeing

to the financial performance of a business is increasingly recognised by investors, who

are looking at wellbeing and engagement levels as leading indicators of performance

and market value.

5 Sources: Professor Alex Edmans http://alexedmans.com/ TEDx talk on “The Social Responsibility of Business”: http://bit.ly/TEDxCSR https://agenda.weforum.org/2015/01/why-happier-workers-matter/

DAYS OFSICKNESS ABSENCEPER YEAR

THEAVERAGE

WORKPLACE

6.3DAYS/FTE*

101 BEST WORKPLACES

IN THE UK

2.7DAYS/FTE**

‘Our profit growth since I joined in 2008 mirrors the trend in the growth of our engagement levels – proof that employee engagement is directly related to business performance!’Daksh Gupta CEO Marshall Motor Holdings

http://alexedmans.com/

http://alexedmans.com/

http://bit.ly/TEDxCSR

http://bit.ly/TEDxCSR

https://agenda.weforum.org/2015/01/why-happier-workers-matter/




Figure 6. Difference between best-in-class and average organisations in key

workplace categories

Best Workplaces 2016 – Top 101

Average UK organisations

Culture 90% 59%

Values and ethics 83% 44%

Wellbeing 84% 53%

Engagement

(pride, advocacy, discretionary

effort, intention to stay, sense

of mission and purpose)

87% 59%

Source: Great Place to Work® 2015/2016 survey data and Research Now Population Data 2015

‘If we leave the human factor out of our business calculations, we shall fail every time’

This could be a quote from any number of today’s business leaders. In fact it comes

from Victorian industrialist William Lever who, along with fellow business leaders Joseph

Rowntree and John and George Cadbury, recognised that providing employees with

not just good working conditions but housing and education for their children would

help them flourish and be good for business. Fast forward a few hundred years and we

see employers offering similar support to employees at key stages of their lives such

as helping them buy a home through preferential mortgage schemes or easing women

back into work after maternity leave through 1:1 coaching or buddy schemes.

Employers who put their employees’ wellbeing at the heart of their organisation will

not only reap the benefits themselves, but will also help create a better society for

everyone.

‘I joined this organisation from a large Big 4 type firm. This year is the first year I received a birthday card from my employer, a bottle of champagne to celebrate my decision to join and a company funded and organised festival. For the first time in years, I work for a company that treats me like a person, a person with feelings, opinions and emotions’. Employee UK Best Workplace


‘…genuine care for staff wellbeing, a focus on helping people to accomplish their goals and dreams both in and out of work and a sense of equality at all levels of the business. Examples include health benefits and exercise/yoga/Pilates classes, the Dream Ball initiative where staff are entered into a draw where the winner has a ‘bucket list’ style ambition fulfilled by the company, and the bonus scheme that gives the same bonus to every member of staff, regardless of position.Employee, UK Best Workplace

‘Improve the work-life balance. There is an expectation that [the company] comes first. Remove the underlying, unspoken expectation that you have to be available 24/7, 365 days a year.’

Employee at one of the UK’s average workplaces

‘The working environment is always supportive. The company leads as a group and listens to the staff input. It creates a sense of pride for your job which encourages people to work harder and feel more satisfied in their personal and professional lives.’Employee, UK Best Workplace

‘[some] managers need to understand staff have issues outside the workplace; sometimes staff need sympathy instead of being spoken to in a rude manner!’Employee at one of the UK’s average workplaces

Gowling WLG (law firm)

Gowling WLG recognise that flexible working is not just about childcare needs but about people achieving the work-life balance they want. Therefore they consider all requests for flexible working including job share, part-time hours, working fewer days, home-working and career breaks. The request form doesn’t ask for the reason – this is seen as irrelevant. What’s important is whether the business needs will allow them to accommodate the request. They also recognise that there are occasions when employees may need to change their working arrangements on a one-off/temporary or permanent basis because of things that are happening in their personal life and, again, try to be flexible.

Kuehne & Nagel (transport and logistics company)

Kuehne & Nagel devised a concept for a fully funded Debt Resolution Service. All staff were informed through a communications road show and the service explained in detail, along with its confidentiality. In the interests of confidentiality staff members who want to use the service are encouraged to go directly to the Financial Advisor. However, it can also be accessed through the Employee Assistance Program (EAP).

Taff Housing

Dr. Bike – a free bike servicing scheme that promotes the use of bicycles to travel to work and for pleasure.

McDonald’s

People who have been working for McDonald’s for more than 10 years can enjoy eight weeks of paid leave. The sabbatical gives employees the chance to take some personal time to regenerate, away from work stress. The employee’s email account is switched off and an ‘out of office’ email is sent.

What some of the surveyed employees think

Examples of best practice in wellbeing at Best Workplaces


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WELLBEING AND THE IMPORTANCE OF WORKPLACE … · have a moral obligation to make ... shows that around 15% of the UK population suffers from ... Managing sickness absence is a key