“Actively disengaged employees erode an organization’s bottom line while breaking the spirit of colleagues in the process. The cost in the US is estimated to be more than $300 billion in lost productivity alone.”
~Gallup.com Q12 Meta-Analysis

“The two most effective business tools for twenty-first century executives are meditation and intuition.”
~Harvard Business School and INSEAD, Europe’s leading business school

“75% of healthcare costs are directly related to lifestyle and therefore, preventable.”
~National Institute for Occupational Safety and Health

Poor Wellbeing Is Killing Your Business

But companies can boost their bottom lines by helping their employees thrive. Here’s how.

A Q&A with Tom Rath and Jim Harter, Ph.D., authors of Wellbeing: The Five Essential Elements.

What does your employees’ wellbeing have to do with your company’s performance? Plenty. First, some facts:

• Employees who are thriving in their overall wellbeing have 41% lower health-related costs compared with those who are struggling and 62% lower costs compared with those who are suffering.
• Overall wellbeing relates to illness, which is associated with lower employee productivity and missed work.
• People who have thriving wellbeing have a 35% lower turnover rate than those who are struggling.

So report Tom Rath and Jim Harter, Ph.D., authors of the bestseller Wellbeing: The Five Essential Elements, the result of decades of research into wellbeing. Their study revealed that wellbeing encompasses five distinct, interrelated elements – Career, Social, Financial, Physical, and Community -- and all of them affect the bottom line.

In this interview, Rath, who leads Gallup’s workplace research and leadership consulting practice, and Harter, Gallup’s chief scientist for workplace management and wellbeing, tell how companies can improve employee wellbeing and boost company performance.

Gallup Business Journal: How are most companies promoting wellbeing among their employees?

Rath: The most important thing executives can do is send a very clear message to their employees that they care about each person’s overall wellbeing and that they want to be a part of helping it improve over time. I’ve been encouraged by seeing the way some large employers have said, “We’re going to start a dialogue about each of the five elements and help each person know why it’s important that they spend a little time on [all five].”

Gallup Business Journal: That could make for quite a recruitment message: Take a job here, and we’ll help improve your whole life.

Jim Harter, Ph.D.: Only 12% of employees strongly agree that they have substantially higher overall wellbeing because of their employer. We’ve got a lot of work to do.

Rath: If our economy, or the relationship between individuals and employers, was working correctly, that number would be at least 50%. Of course, employee engagement plays a part in this. Only 29% of Americans are engaged in their jobs, and only 11% are engaged worldwide. Those 11% who are thriving in Career Wellbeing are also more than three times as likely as actively disengaged employees to be thriving in their lives overall.

Dr. Harter: I think the long-term goal is that when you join a company, you should expect your life to be better in many areas. After joining an organization, the reality of the experience needs to live up to the expectation. Many new employees find that the reality doesn’t align with their expectation once they get past the six-month honeymoon period.

Gallup Business Journal: What happens if it doesn’t?

Dr. Harter: Then your engagement drops, and that affects all kinds of other things. It certainly affects your productivity, it can affect your physiology, and we’ve got plenty of evidence that it affects your daily mood. Then you bring that home, and it affects your family. So there are many consequences.

The companies that have been working on engagement over the years have set themselves up well as it relates to wellbeing. They’ve built up some trust. Engaged workers can say, “I can trust what’s going to happen.” Or, “I’ve got someone looking out for my future.” All these kinds of things build trust, and trust allows people to open up a little bit more and allow the organization to help them improve their wellbeing.

Rath: That’s part of what we need to turn around as well: increasing the number of people who trust their employer. We need to get to a point where employers and employees can say, “We’re in this together because high wellbeing is good for both of us, for personal and financial and emotional reasons.”

Gallup Business Journal: Isn’t that a stretch for many employees and employers?

Rath: I don’t think it’s as much of a stretch as it may seem. I’ve spoken with a few employers who have moved away from what has to be some of the least attractive language you could use about health risk to start talking about wellbeing. As soon as they do, their participation rate goes up dramatically simply because they’re reframing the conversation and how they want employees to be involved in a workplace. For wellbeing to take hold, it’s got to be something that individual team members are getting excited about in their own lives. It can’t be something that a company is forcing top-down through hierarchical structures.

Dr. Harter: When we studied great managers, it was clear that they were working on improving overall lives while they were improving performance. They weren’t just improving the workplace; they were thinking about the whole person. Now we can quantify the difference that wellbeing can make for an organization. Wellbeing becomes much more than what you put on your mission statement – it becomes an important part of what the organization practices with its employees every day.

Copyright © 2012 Gallup, Inc. All rights reserved.