Economists are predicting another year of sluggish growth in the UK, but an increasing number of businesses think that they may have a solution to the ‘productivity puzzle’: a renewed focus on their employees’ wellbeing. The IoD invited a group of experts in the field to discuss what this entails in practice
We have seen that unlocking discretionary effort can lead to a 20% uptick in productivity
Around the table
Meet the panel of business leaders and wellbeing experts
It’s hard to argue with the premise that a healthy, happy workforce is a productive one. A growing body of evidence suggests that when employees feel that they are being properly looked after, and when they believe that senior managers are truly considering their needs, they will tend to work harder, going above and beyond the basic requirements of their employment contracts. It’s what HR people call discretionary effort.
The importance of motivating people to go the extra mile was highlighted by the Office for Budgetary Responsibility’s recent downward revision of its GDP growth forecast, pointing to another disappointing year ahead for the UK economy. How the nation gets the best out of its human capital is truly a perennial puzzle. Yet behind the gloomy macroeconomics there are signs that businesses are improving their output by refining how they manage their employees’ health and wellbeing.
“We’ve seen that unlocking discretionary effort can lead to a 20 per cent uptick in productivity,” said Bev Messinger, CEO of the Institution of Occupational Safety and Health (Iosh). Messinger was speaking at a recent roundtable discussion at the IoD’s London headquarters entitled “How responsible employers are scaling up UK productivity”.
The institute’s director general, Stephen Martin, hosted this meeting of leading figures from business and the health and safety profession to talk about how they are using health and wellbeing to improve profitability. Welcoming the delegates, he said: “Business is definitely waking up to the fact that better health and safety performance can have a real impact on productivity in the long term.”
Community, not commodity
The discussion began with Messinger describing her vision of how businesses can, through the sensible adoption of wellbeing policies, make real strides towards improving both employee engagement and productivity. But the first thing an organisation needs to do is look at its culture and ask whether the conditions are right for this, she stressed.
“The importance of culture cannot be overestimated. I coined a phrase recently. It’s one that I’ve been developing in our own organisation: the workforce is a community, not a commodity,” Messinger said. “So I’ve been thinking about what that means, whether it’s referring to a family-style, smaller workforce or to a large global workforce. For me it’s about whether the community has a shared vision and common behaviour.”
It was clear that her argument resonated with those present as she continued: “Yes, we’ve got to make a profit, but it’s about how that community makes that profit. Does it do so ethically, safely, responsibly? If it does, we know that this increases morale, motivation and productivity. We all know that it’s not about what people do to meet the terms of their contract of employment that makes a business successful – it’s about what they do beyond that. And having a shared sense of values in an ethically sensitive organisation is more likely to achieve this.”
Change, the only constant
For Nitin Patel, the need to unite the business around a shared vision of the future has come into sharp focus recently. His company, shower manufacturer Redring, is going through a period of significant change, with a relocation and a restructuring that will entail some job losses.
Patel explained that Redring, like most industrial businesses, had always taken a logical, evidence-based approach to health, safety and wellbeing: do this and reduce insurance premiums; do that and cut absence rates. “That’s great, but over the years we’ve needed to add to it,” he said. “So we’ve spoken to people and asked them what they need as part of the changes, what they’re worried about and what we can do to help.”
Redring’s employees – many of whom have been with the firm for years – now face the prospect of more upheaval. “One of the topics we’ve focused on the most has been wellbeing and dealing with workers’ anxieties about change,” Patel said. “The change we’re making is huge. Lots of people who have been with us for a long time will be affected. We’re restructuring the business, so from an early stage we have been communicating with people.”
This, he said, had been critical in calming fears, maintaining morale and keeping people focused throughout the upheaval. “As part of that we’ve created a set of workshops to provide more info and support. These have covered some basic things like retraining, but also things such as managing free time that you might not have had before – how can you cope with that change of lifestyle?”
This programme, which the company has been running for most of the past year, sits alongside the classic health and safety agenda.
“Right now we can see a lot of benefit from this scheme, because absence rates normally go up when such change is in the air,” Patel said. “Whether we continue depends on how well it goes, but it’s the first time we’ve put this sort of thing in place. It’s interesting that the most popular workshops don’t tend to be the practical ones; people are more interested in the other ones. This is an older workforce, some of whom won’t find a similar job to the one they’re leaving, so they are worried about what’s coming next.”
Adapt or die
The theme of change – preparing for it, adapting to it, mitigating its impact on employees – cropped up throughout the discussion. For another business leader, whose whole sector is being transformed, it has become the catalyst for some serious reflection.
“Our industry has gone through a lot of disruption in the past few years, mainly because of shipping-line consolidation,” said Kevin Furniss, vice-president of health, safety, environment and sustainability at port operator APM Terminals. “A number of carriers are suffering significant losses. We have already seen one major liner business go under, while government-owned businesses in this sector have struggled across the world. There is a lot of excess capacity in the supply chain.”
As a result, the company’s employees have had to adjust to near-constant change. For Furniss, the question was simple: “How do you keep morale up and motivate people to do more when they are faced with such uncertainty? How do you do that when the price of oil drops from $100 to $28 a barrel and all the value in the company is falling?”
Messinger believes that being as honest and open as possible with the workforce is crucial in such situations. “In the first 12 months in my role, I’ve said that I’ll tell our employees the truth, whether it’s good or bad. I won’t dress it up and I won’t shy away from it. For the most part, people want that,” she said.
A question of trust
Furniss agreed that transparency is the key to building trust throughout the organisation – a vital ingredient of employee engagement, but he added: “I think trust is disappearing rapidly. That’s a real problem. In my view, your organisation performs a lot better when there’s trust. Far too often I’ve seen it eroded. It takes years to build but it can be lost very quickly.”
A “trust deficit” can, among other things, harm morale and productivity, while making it harder to recruit and retain talent. If employers can get the trust piece right, it was generally agreed, they stand a better chance of improving employee engagement and mitigating such problems.
For John Green, director of health, safety and environment at construction giant Laing O’Rourke, addressing this issue requires business leaders to remember what motivates people further down the organisation. If you know why your people behave in certain ways, you can adapt your policies to ensure they are engaged, he argued.
“People come to work because they want to be successful, not to be safe. One aspect of that is going home safely, of course, but it’s also about doing the job the way they want to do it. We have factories producing stuff and a lot of the people simply follow the rules, but we’re also giving them the opportunity to contribute to the debate if they want to. We have a low churn rate in part because we empower our people.”
Power to the people
The theme of empowerment – of making employees a central part of corporate strategy and giving them the chance to influence the wellbeing agenda – ran strongly through the conversation, with several guests revealing how they have approached this issue.
For Paresh Davdra, CEO of fintech firm Xendpay, letting his employees take the initiative is key. “We know that people want to be involved in improving not only the company’s performance, but also their own work environment. It’s good management to allow them to do that as much as possible,” he said.
Michael Reece, group operations and asset director at the Aster Group, an ethical housing developer, agreed. “We have a big trade workforce. Something that holds things back is the management perception that trades teams want to do only what’s required of them and don’t want to engage with the business beyond that,” he said. “But, when you talk to them, you often find that they are much more engaged than you might think. They want to see changes that will improve their jobs and deliver a better service.”
The challenge, Reece said, lies in how to engage site-based trade teams and supervisors to the same degree as office staff. “How can we tailor things to reflect their day-to-day experience on the ground? There’s a danger that we can take a simplistic view and fail to think carefully enough about what motivates different parts of the workforce. Flowery communications about ‘the corporate purpose’ don’t connect well with the trade teams, for instance.”
While some employees want no more than to do their jobs, most are more invested in their organisation, he said, so the senior management owes them the chance to get involved with setting the direction of the company when it comes to its wellbeing priorities.
“As safety professionals, we come in for criticism and we have to move with the times,” Reece said. “At Aster we have started to build a framework to give us a better understanding of the links between wellbeing and productivity. We’re taking the first few steps on that journey and we’ve done some things that are largely led by HR. What we haven’t yet done is engage the front-line staff to take ownership and challenge the business.”
This point was echoed by Ian Graves, director of European business development at National Grid, who said: “In the UK the focus is too much on the output, but we need to ask: ‘What did it take to get to that point?’ Why would you not invest more in systems that can measure the right things to help us get better?”
All for one
There’s no question that each organisation has its own unique set of strengths, weaknesses, opportunities and threats, of course. This means that there is no one-size-fits-all wellbeing and performance solution that employers can simply take off the shelf.
As Graham Hopkins, group safety, technical and engineering director at Network Rail, said: “You can’t take a foreign culture and impose it on your business. It has to be native to you.”
Shaun Davis, global director of health, safety, wellbeing and sustainability at the Royal Mail Group, agreed, stressing that “the key is to ensure that your wellbeing programme is right for your business”. Having led “Feeling first class”, a culture-change programme promoting wellbeing as a business improvement tool, he believes in involving not only employees but also external stakeholders.
“Nobody’s got a monopoly on good ideas – you can also learn a lot from your suppliers. Some of the things I have done focused on getting the supply chain on board, using workshops and the like,” Davis said.
Green picked up on the theme that good ideas can come from anywhere. “In fact, wellbeing should be driven from the bottom up – led by employees with a real operational understanding of the business,” he said. “Anyone can take the lead, as long as they are asking the right questions: ‘What’s working and what isn’t? What can we do to improve?’ Concentrating power in a few people simply won’t work in this context. And, really, engagement isn’t enough – you have to focus on empowerment. Giving power to the people is the key. They can manage the risk and give the senior team a better idea of what they need in order to be more productive and engaged.”
It was an apt sentiment on which to end the session. “The contributions were wonderful,” said Bev Messinger, who thanked the attendees before issuing a rallying cry for change in how wellbeing is seen as a performance driver.
“As professionals in this field, we know what the link is, but the challenge now is to take that back into our businesses to make that link stronger,” she said. “I’m heartened by what we can do. It needs people who, like us, are determined to embed health and wellbeing into all aspects of strategy, from the boardroom to the shopfloor.”
Stephen Martin agreed. “We’ve had a great reaction from the people in this room. It’s been useful to discuss the link between productivity and health and safety. We’ve focused on the need for energy to come not only from the top, but also from the grass roots of the organisation,” he said. “It’s so important that companies get their culture right. This is not just about box-ticking. It’s actually about ensuring that everyone’s voice is heard and about making a difference. I think we did that today.”