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The (new) working world: promoting workplace well-being

This is the third part of a four-part series on SDG 8 – decent work and economic growth. In our first two instalments, we demonstrated how we are engaging with companies on their hiring practices and efforts in the shift towards fairer pay outcomes. Today, we progress to the issue of employee benefits.

Workplace benefits play a key role in helping to retain and engage employees. Indeed, evidence shows that investing in employee well-being leads to higher productivity and boosts the bottom line1.

What’s more, three of the key human capital challenges confronting many businesses – talent shortages, ageing demographics and non-communicable diseases – are intricately connected and workplace wellness is a key element in the solution.

In our view, wellness (physical and mental) is likely to become ever more important to companies as we collectively spend more years of our lives at work than ever before.

Job perks: the value of employee benefits

Despite the increasing number of exotic staff benefits on offer (such as massage services) – influenced largely by the high-tech sector – companies will seemingly get the best employee satisfaction result by focusing on just three core offerings:

  • Health insurance (by a distance the most valued benefit)
  • Paid holiday allowance
  • Pension plans

However, there is plenty of scope for businesses to tailor bespoke employee benefit plans around a number of further areas that both could increase labour market participation and help meet other health-focused Sustainable Development Goals (SDGs) (see below).

According to the OECD, mental ill-health knocks 4% of GDP in the UK through lost working days, lower productivity and increased healthcare spending2.

The main responsibility for worker well-being – both mental and physical – will continue to fall on employers, not least given the degree to which causes are under their control, such as repetitive work, a lack of control, pressure to meet strict targets and relationships between colleagues and supervisors.

Healthy workers cost employers less – a fact coming into sharp focus for those countries and industries with ageing workforces.

Interestingly, while the price of employee illness is most often counted in days off work, there is another less obvious, but possibly more significant, cost in the form of ‘presenteeism’ – where workers turn up for work but underperform due to sickness or stress.

Childcare services are a much-valued employee benefit, reducing many family-related employee stresses while also contributing to the long-term health of the wider population.

Improved childcare options should create a better-skilled, more employable and productive population over the long term, significantly reducing wasted human potential with obvious spin-off benefits for corporate profitability.

Help with pension plans is one of the top three employee benefits people value in prospective employers, Glassdoor3 research shows.

Evidence suggests that the defined contribution pension generation are facing a looming savings crisis. According to a 2018 study by the US National Institute on Retirement Security, two-thirds of millennials – loosely defined as those born from the early 1980s through to the early years of this century – have no retirement savings.

Engaging on workplace benefits

Since the inception of Hermes SDG Engagement Equity, we have been encouraging companies to play a more active role in addressing the issue of workplace benefits – both financial and non‑financial.

To find out more, read the full report.

  1. 1“It’s official: happy employees mean healthy firms,” published by the LSE Business Review in July 2019.
  2. 2“Mental illness costs UK £94bn a year, OECD report says,” published by The Guardian in November 2018.
  3. 3Glassdoor is a website where employees and former employees anonymously review companies and their management.
Risk profile
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