Traditionally, perks of the job were salary-based incentives. These straightforward methods of reward and encouragement for employees functioned on the assumption of money as the greatest catalyst of wellbeing. These days, it’s not so straightforward.

What purely financial incentives overlook is the relationship between health and wellbeing, and productivity. Not only does an increasing body of evidence demonstrate how improving employee wellbeing offers business untapped financial opportunity, workers’ awareness and expectations of their own health and wellbeing is increasing.

Realising this, a growing coalition of progressive companies are implementing non-traditional employee perks and initiatives. This shift in thinking is earning them the status as the “Best Places to Work,” from not only an employee’s perspective, but financially as well.

The Best Places to Work

Conducted by the Great Place to Work Institute (GPTWI), the annual Business Review Weekly Best Places to Work list ranks the top companies around the world as reported by their employees.

Why was ranking from employee perspectives so significant? Because the new school is in: employee satisfaction equals better business.

The most recent Australian edition of the Best Places to Work list – surveying 16,930 employees from 160 companies of all industries and sizes – found an 11 per cent increase in “unique” (read: non-traditional) benefits offered to employees.

Investigating this trend, the GPTWI discovered overwhelmingly “a positive relationship between training, motivating, and empowering employees and improvements in productivity, employee satisfaction and financial performance.” Put plainly, the non-financial incentives were creating financial results.

In fact, 20 years of GPTWI research shows that the Best Places to Work “consistently outperform” their peers in financial returns. The fact that these highly competitive companies have boldly invested in non-traditional perks and benefited, clearly defies any misconception that investment in health and wellbeing initiatives is an uncertain game.

The GPTWI reports on some of the major benefits that these initiatives bring:

• Lower levels of turnover;
• Higher productivity and profitability;
• Reductions in health care costs;
• Greater innovation, creativity and (beneficial) risk-taking;
• Higher levels of customer satisfaction and loyalty; and
• A greater number of job applicants for open positions.

From better to best

The best companies understand that investment in employee health and wellbeing not only improves employee satisfaction and financial return, but safeguards against losses attributable to a range of factors springing from employee ill-health and disengagement.

While we have previously reported that there are no comprehensive cost-benefit analyses of investment in Australian workplace health and wellbeing, UK statistics warn that:

• 30 million working days are lost annually due to occupational illness and injury and this costs the British economy £30 billion (3 per cent of British GDP);
• Work-related stress, anxiety and depression were responsible for 13.8 million lost working days in 2006/7 (absenteeism), costing the British economy £3.7 billion annually;

All of these risks can be addressed and significantly controlled for by the implementation of well-designed workplace health and wellbeing initiatives.

Good, but not great

While an increasing number of industries catch on to the benefits of offering progressive employee wellbeing initiatives, the gap between the best – and the rest – shows we’ve got some way to go before everybody is on the same page.

Quoted in the June 2010 BRW, Professor Barbara Pocock from the Centre for Work + Life observes that “the majority of workplaces” still favour rhetoric about great workplaces over action. This suggests that many executives and managers may be somewhat aware of the benefits of providing great places to work, but don’t recognise the risks posed by remaining inactive. “Unhappy workers have higher levels of absenteeism and leave jobs more frequently – both of which have bottom line impacts," warns Pocock.

One element of these costs is attributed to presenteeism (the reduced performance and productivity in the workplace of a worker whose health is impaired). Various studies found that presenteeism cost:

• Two to three times more than the direct costs of worker illness; and
• Two to seven times more than the costs of absenteeism.

Brass tacks

Executive buy-in won’t occur without reliable cost-benefit evaluation of proposed initiatives. The UK’s Black report details the projected investment ratios of workplace wellbeing initiatives:

• Medical costs –2.3:1 on investment;
• Absenteeism – returns of 2.5:1, 4.9:1 and 10.1:1 for differing programs;
• Absenteeism and presenteeism (employees showing up sick to work and having a lower output) combined – 1.81: 1, 3.42:1 and 8.81:1; and
• Musculoskeletal injuries: 15.4:1, 24.6:1 and 84.9:1.

Additionally, the Black report shows that workplace wellbeing programs cut:

• Absenteeism by an average of 30-40%;
• Staff turnover by around 20-25%;
• Accidents and injuries by an average of 50%; and
• Reduction in time spent on managing sickness absence (i.e. employee discipline or injury investigation).

Despite the overwhelming evidence, Pocock concedes that currently, the “best” workplace practices remain likely to be driven by individual senior managers’ personal values, despite the proven incentive of lower costs and higher profits.

Pocock’s research, however, identifies that even two of the typically "most conservative" industries of law and construction - "full of people who say it's not possible to conduct their business differently" - have become far more progressive under a "values-driven" leader, enabling “radical things, with positive bottom-line outcomes.”

Initiative-initiative

BRW reported that, “the most widespread high-value perks are related to health and training opportunities.” The GPTWI found health and wellbeing initiatives to be the most common, including such schemes as:

• Influenza vaccinations offered to staff by more than 50 per cent of “best” companies; and
• One-third of “best” companies subsidised membership to an off-site gym, while 4 per cent provided on-site fitness centres.

Flexible work options also routinely featured, with results showing that:

• 78 per cent of employees have flexible start and finish times;
• 72 per cent permit working from home and telecommuting; and
• 52 per cent offer maternity benefits beyond the minimum standard.

Training opportunities were another major element of best business, with:

• Employees receiving an average of 66 hours of training per year;
• 28 per cent of businesses offering subsidised non-job specific training in areas of employees’ special interest; and
• 30 per cent of companies allowing staff to perform voluntary work – for a charity – in paid time (not annual leave).

The next Best Places to Work list is soon to be released and will be published in BRW magazine on 30th June, 2011. Why not enter your company for next year?

Further cost-benefit analyses of actual companies’ successful health and wellbeing initiatives can be found in our article, Health and wellbeing in the real world.