Employee Well-Being: You Don't Just Need Happy Employees, You Need Productive Ones

Employee Well-Being

Employee well-being is more than just another wellness program — it's a way to improve workforce profitability and drive value for businesses everywhere.

The concept of employee well-being sprang initially from the employee wellness program — an initiative aimed at lowering insurance premiums by encouraging positive, healthy behaviors among the workforce. At some point, the definition of wellness expanded to include financial and emotional wellness, too.

When you're buying a machine or training a new worker, it's fairly easy to look at the investment and the output to determine a return on investment. Trying to calculate the ROI of employee well-being, however, is inherently challenging because well-being is an intangible aspect of employment.

Connecting Well-Being to Engagement and Productivity

According to the Harvard Business Review, high stress actually lowers productivity and performance — an issue that affects virtually every person in the workplace today. This isn't limited to stress strictly related to work but applies to stress regarding finances, emotional health or other aspects of life.

Financial stress and strain is a challenge for many workers, since the majority of Americans live paycheck to paycheck: CNBC reported last year that nearly eight out of every 10 workers is one paycheck away from serious financial troubles. Anyone who has ever faced this particular issue knows how challenging it can be to focus on work or other activities while digging out of a financial hole.

Sleep is another area where a lack of well-being can affect productivity. According to a recent Yahoo article about FitBit's 6 billion data points on sleep, researchers showed that the average person sleeps approximately six and a half hours a night. Considering the gap between this number and the recommended eight hours, it's safe to say that sleep may be impacting job performance on a large scale.

Having workers who are healthy and well is critical to performing optimally on an organizational level.

Calculating Return on Investment for Engaged Workers

Supporting employee wellness creates employees who have engagement on the job, and engagement is a key factor in calculating the ROI of employee well-being. As outlined by the U.S. Chamber of Commerce Foundation, data from Gallup shows that businesses with highly engaged employees are up to 21 percent more productive, have 25 percent less turnover (in high-turnover industries) and have up to 37 percent lower absenteeism rates. From there it's fairly simple to estimate the impact of increasing employee engagement.


If the average worker contributes $10,000 of value to the business, increasing that by 21 percent and multiplying it across a workforce of 1,000 is a net benefit of more than $200,000. And that's not even the end of the positive return.


If those workers are more likely to stick around, that means the employer saves on turnover costs like hiring and training. TLNT estimates this cost at $19,000 for an employee making $50,000 per year. A reduction in turnover of 25 percent means fewer unplanned $19,000 checks written to replace and retrain staff in the event that employees leave the organization. This is impressive because those engaged workers not only stay longer, but they're more productive as well. The benefits are cumulative.


People need time off for a variety of legitimate reasons, but engaged workers take less unplanned time off to binge on Netflix or play hooky. Less absenteeism naturally leads to improved customer experiences and reduced overtime costs to fill in for unexpected absences, further boosting the bottom-line impact of engaged workers.

The story is clear: Employee well-being is more than just a "nice to have" — it's a must for employers that need to remain competitive in today's hot market for talent.