Beyond the bottom line: Why employee wellbeing should be a P&C budget priority

For years, People & Culture (P&C) teams, or human capital teams as they are sometimes known, have been challenged to do more with less. Stretching budgets to cover everything from effective recruitment strategies and extensive training programmes to Employee Benefits and employee engagement initiatives is a constant juggling act. But what if I told you that prioritising employee wellbeing isn't just a nice-to-have, but a strategic investment that can positively impact your bottom line? It's time to shift our thinking and recognise that employee well-being is intrinsically linked to financial health, particularly when it comes to spend management. This requires a balanced people strategy that aligns culture with business goals.

The wellbeing-retention connection

The link between employee wellbeing and retention is undeniable. The 2024 Gallagher Australian Edition Workplace Wellbeing Index report paints a clear picture: individuals with high wellbeing are 3.4 times more likely to stay with their current employer. Conversely, those with low wellbeing are 2.5 times more likely to have resigned in the past year. These figures are not mere statistics; they represent a significant financial impact for organisations.

Think about the costs associated with employee turnover: acquisition costs, onboarding, lost productivity, and the intangible cost of losing valuable knowledge and experience. High turnover creates a cycle of reactive spending, making it difficult for P&C teams to strategically plan and manage their budgets. For example, a company with a high turnover rate might find itself constantly scrambling to fill vacancies, leading to rushed hiring decisions and potentially costly onboarding processes. This reactive approach can strain resources and hinder long-term growth. Strategic workforce planning and retention strategies become critical in this dynamic market.

The underutilisation of wellbeing programmes

While many companies offer employee wellbeing services and employee assistance programmes (EAPs), a significant gap exists between availability and employee uptake. Gartner research reveals that while 87% of employees have access to mental and emotional wellbeing offerings, employee usage rates are low, with only 23% actually using them. This disconnect is often attributed to programmes being too time-consuming, confusing, or difficult to access, as highlighted by Deloitte's survey where 68% of respondents admitted to not fully utilising their company's wellbeing resources. This lack of activity among employees highlights the need for practical strategies to boost engagement.

This underutilisation represents a wasted investment. Companies are pouring money into programmes that fail to deliver the desired return on investment (ROI) - a healthier, more engaged workforce. It's like buying a gym membership with all the best intentions and then letting it gather dust. Imagine a company invests in a comprehensive mental health programme, but employees are unaware of how to access it or find the enrolment process cumbersome. The result? Low participation rates and, consequently, productivity and retention rates.

Reframing the EVP: wellbeing as a financial strategy

So, how can P&C teams bridge this gap and leverage wellbeing to drive better financial outcomes? The answer lies in a robust Employee Value Proposition (EVP) that prioritises employee wellbeing and is supported by streamlined processes. This EVP should be a key component of your talent acquisition strategy and Employer Branding, contributing to a culture of excellence that attracts top talent and positions the company as an employer of choice.

Your EVP is more than just a list of benefits; it's the overall experience you offer employees. By embedding wellbeing into your EVP, you're sending a clear message that you value your employees' holistic health and are committed to supporting their overall wellbeing. This, in turn, can lead to:

Increased retention

As we've established, happier employees are more likely to stay, reducing turnover costs and allowing for more predictable budgeting. For instance, offering flexible work arrangements can significantly contribute to employee wellbeing and work-life balance, leading to increased job satisfaction and reduced turnover intentions. This contributes to a thriving workplace culture and a dynamic culture that adapts to the evolving needs of its workforce.

Enhanced productivity

When employees feel supported and valued, they are more engaged and productive, contributing to a healthier bottom line. A study by the University of Warwick found that happy employees are 12% more productive. Imagine the impact this could have on a company's overall performance and profitability. This aligns with the need for an approach to team management that fosters high-performing teams and a balanced team environment.

Improved employer branding

A strong EVP attracts top talent, reducing recruitment costs and ensuring you have the best people in the right roles. In today's competitive job market, companies with a reputation for prioritising employee wellbeing have a distinct advantage in attracting and retaining top talent, particularly in leadership positions and executive positions.

Better financial planning

With lower turnover and more predictable spending patterns, P&C and finance teams can collaborate on strategic, long-term financial planning. This collaboration can lead to more accurate budget forecasting, optimised resource allocation, and improved financial stability. This allows for forward-looking decisions and defensible decision-making based on Evidence-based decision frameworks.

Building a wellbeing-centric EVP

Creating a successful wellbeing-centric Employee Value Program (EVP) requires a multi-faceted approach:

Listen to your employees

Conduct surveys, focus groups, and one-on-one conversations to understand their needs and preferences. Are they looking for more mental health support, financial wellness programmes, or perhaps opportunities for professional development? Gathering this information is crucial for tailoring your wellbeing initiatives to meet the specific needs of your workforce. Culture professionals can play a vital role in facilitating these conversations and gathering actionable insights.

Offer diverse programmes

Provide a range of options to cater to different needs, from mental health support and financial wellness programmes to flexible work arrangements and fitness initiatives. This could include offering subsidised gym memberships, access to mindfulness apps, or even on-site yoga classes. The key is to offer a variety of options that cater to different interests and needs, including app-based programmes that cater to the demand technology of today's workforce.

Make access easy

Simplify programme enrolment and access through user-friendly platforms and clear communication. Avoid complex enrolment processes or confusing jargon that might discourage employees from participating. Instead, opt for intuitive platforms and clear, concise communication about programme offerings. Technology Enhancements can play a crucial role in simplifying access and improving the overall employee experience.

Promote utilisation

Regularly communicate the value of wellbeing programmes and encourage participation through incentives and leadership involvement. Highlight success stories, share testimonials, and encourage leaders to actively participate in and promote wellbeing initiatives. This can contribute to a culture of adaptability where employees are encouraged to embrace new programmes and initiatives.

Measure and iterate

Track programme utilisation and gather feedback to continuously improve your offerings. Regularly evaluate the effectiveness of your wellbeing programmes and make adjustments based on employee feedback and participation data. This data-driven approach can provide critical insights and practical insights to inform future people strategies.

Streamlining EVP processes with wellbeing spend management solutions

To further optimise your wellbeing investment, consider leveraging spend management solutions. Tools like Weel offer features such as:

Dedicated wellbeing allowance cards

Provide employees with a designated budget for wellbeing expenses, empowering them to choose the programmes and services that best fit their needs. This promotes autonomy and simplifies expense tracking for both employees and P&C. For example, employees could use their Weel card to pay for gym memberships, fitness classes, or therapy sessions, all while staying within their allocated budget. This provides a measurable impact on employee engagement and empowers employees to take control of their own wellbeing.

Automated reimbursements

Streamline the reimbursement process for eligible wellbeing expenses, eliminating manual paperwork and reducing administrative burden. This not only saves time for both employees and P&C but also reduces the risk of errors and delays.

Real-time budget visibility

Gain insights into wellbeing programme spending, allowing for better budget allocation and informed decision-making. With Weel's real-time reporting features, P&C teams can track spending patterns, identify areas where budgets might be over or underutilised, and make data-driven decisions to optimise their wellbeing investment. This provides actionable insights and supports forward-looking decisions that align with a balanced people strategy.

Addressing potential objections

It's important to acknowledge that some may view wellbeing initiatives as an added expense. However, it's crucial to emphasise the long-term return on investment (ROI) and the potential cost savings associated with reduced turnover and increased productivity. By investing in employee wellbeing, companies are investing in their most valuable asset: their people. This investment can lead to a more engaged, productive, and loyal workforce, ultimately contributing to business success. In a buyer-friendly market, where cost of capital goes down, investing in employee wellbeing can be a convincing business strategy that sets companies apart.

A collaborative approach

Ultimately, effective spend budget management for P&C requires a collaborative approach between P&C, finance, and employees. By fostering open communication, shared goals, and a commitment to employee wellbeing, organisations can create a win-win scenario: a healthier, more engaged workforce and a healthier bottom line. This collaborative approach should extend to industry experts, such as those in the construction industry, to gain APAC Insights and develop comprehensive well-being programmes tailored to specific industry needs.

Investing in employee wellbeing is not just an expense; it's an investment in your organisation's future. It's time to move beyond the traditional view of P&C budgets and embrace a holistic approach that recognises the intrinsic link between employee well-being and financial success. A resilient workforce is a key determinant of success in today's dynamic market, and prioritising wellbeing is essential for building a culture with business goals and achieving a measurable impact on overall business success.

Ready to take your wellbeing initiatives to the next level?

Take a product tour of Weel and see how it can help you streamline your wellbeing programme management or book a demo with our team to discuss your specific needs and learn how Weel can help you achieve your wellbeing goals.