How to overcome leadership resistance to investment in wellbeing

Article Summary

Securing funding for employee wellbeing has never been easy but in today’s challenging economic environment it is more difficult than ever. Many leaders are sceptical about the tangible benefits of wellbeing programmes, perceiving them as non-essential and costly. Moreover, organisations face competing priorities and tight budgets, making it hard to justify investments in areas not directly linked to immediate business performance.

Workplace wellbeing, however, is critical to employee performance and organisational success. Environments that support and nurture employees foster high performance while toxic environments hinder productivity and engagement. The importance of developing and embedding a culture of health and wellbeing cannot be overstated. So how can HR leaders persuade their CEOs that wellbeing is worth the investment, especially when competing with other business areas for funding?

Understanding leadership resistance

Leadership resistance to investing in wellbeing often stems from several sources:

1. Scepticism about tangible benefits

Many leaders, especially in traditional male-dominated industries, view wellbeing as a “nice-to-have” rather than a “must-have.” They perceive it as fluffy and not directly linked to business performance.

2. Financial constraints

In the face of financial pressures leaders prioritise immediate, controllable factors such as cash flow and sales performance. In such an environment wellbeing is not an easy lever to pull. It requires more thought, time and resources, which are in short supply when leaders need to make tough financial decisions quickly.

3. Competing priorities

Business leaders juggle numerous urgent demands, from innovating products to expanding markets. Investing in employee wellbeing can seem less pressing compared to these priorities.

Translating wellbeing into business language

To overcome resistance, HR leaders should present wellbeing as a concrete driver of business performance. Here’s how:

Demonstrate return on investment (ROI):Use data to highlight the financial benefits of wellbeing programmes. For example, according to a Deloitte study, poor mental health costs UK employers £51 billion each year. For every £1 spent on supporting the mental health and wellbeing of their workforce Deloitte says employers get (on average) about £4.70 back in increased productivity.¹ When you tell a CEO they will be getting a return on their investment of over 400% you’re talking their language!

Link wellbeing to business outcomes: Show how a positive work environment leads to better performance and reduced turnover. A study by the American College of Occupational and Environmental Medicine found that companies promoting a culture of health outperformed the market by 2% annually, achieving a 264% return on equity compared to the S&P 500’s 243% over a decade.²

Use hard data and case studies: Present concrete examples and success stories from other organisations. McKinsey reports that disengagement and attrition, more common among those with lower wellbeing, could cost a median-size company $228 million to $355 million annually in lost productivity.³

Building a strong business case

To build a compelling business case for wellbeing, HR leaders should follow these steps:

Start with solid evidence: Gather data on the financial impact of wellbeing initiatives, including employee turnover, absenteeism and engagement levels. A meta-analysis by Harvard University School of Public Health in 2010 showed that for every dollar spent on wellbeing programmes the company saved $2.73.⁴

Align wellbeing with strategic goals: Connect wellbeing initiatives with the company’s strategic objectives. For example, if the goal is to drive innovation or customer satisfaction, explain how a healthy, engaged workforce is essential for achieving this.

Emphasise long-term benefits: Highlight the long-term gains of wellbeing investments, such as improved employee loyalty, performance and reduced healthcare costs. The World Economic Forum reports that companies investing in employee wellbeing have a competitive advantage and higher profitability, while leaders who prioritise a healthy, happy workplace can increase employee engagement and motivation.⁵

Address common objections: Be prepared to counter objections with data and success stories. If leaders argue that wellbeing is too costly, provide examples of cost savings from reduced turnover and absenteeism.

Present the moral argument: Emphasise the ethical responsibility of creating a safe and supportive work environment. As a good employer there is a moral obligation to create a safe environment. An evidence review by the University of Birmingham notes that a healthy working population is an ethical priority for businesses. The paper also points out that organisational factors are hugely influential when it comes to stress, saying: “The implication is that organisational and management changes should be targeted rather than individual distress since morale within an organisation is an important protective factor.”⁶

In summary

In the words of our own Paul Devoy – CEO of Investors in People “A leader once told me: ‘You can’t out-yoga a bad boss.'”This highlights the fundamental issue that effective leadership and a positive culture are crucial for the success of any wellbeing initiative. Organisations must adopt a holistic approach to wellbeing, focusing on creating a supportive and healthy work environment.

At Investors in People we have developed a Wellbeing Standard and We Invest in Wellbeing framework, which includes a maturity model for organisations. This framework helps organisations of all sizes and sectors to develop, implement and sustain a culture of health and wellbeing, ultimately driving better business performance and employee satisfaction.

In difficult times it is easy for leaders to take knee-jerk reactions and pull back spend in areas such as wellbeing. Overcoming leadership resistance requires presenting a compelling, data-driven business case. By translating the value of wellbeing into business language and aligning initiatives with strategic goals, HR leaders can secure the necessary investment to create a thriving workplace where employees feel valued and supported, driving long-term success and sustainability.

Practical tips for overcoming leadership resistance

• Use hard data to demonstrate ROI: Present statistics and case studies that show the financial benefits of wellbeing programmes.
• Draw clear correlations with business outcomes: Link a positive work environment to improved performance, retention and productivity.
• Use compelling analogies: Help leaders visualise the impact of wellbeing on employee performance.
• Build a strong business case: Base your argument on solid evidence, align wellbeing with strategic goals and emphasise long-term benefits.
• Address scepticism directly: Be prepared to counter objections with data and success stories.
• Share personal stories: Humanise the issue by sharing anecdotes about employees who have thrived thanks to wellbeing initiatives.

Sources

1. 1.Deloitte: Mental health and employers: The case for employers to invest in supporting working parents and a mentally healthy workplace, May 2024 Deloitte https://www2.deloitte.com/uk/en/pages/consulting/articles/mental-health-and-employers-the-case-for-employers-to-invest-in-supporting-working-parents-and-a-mentally-health-workplace.html
2. 2.Fabius, Raymond MD; Phares, Sharon PhD. Companies That Promote a Culture of Health, Safety, and Wellbeing Outperform in the Marketplace. Journal of Occupational and Environmental Medicine 63(6):p 456-461, June 2021. | DOI: 10.1097/JOM.0000000000002153 https://journals.lww.com/joem/Fulltext/2021/06000/Companies_That_Promote_a_Culture_of_Health,.2.aspx
3. 3.McKinsey: Some employees are destroying value. Others are building it. Do you know the difference? September 2023 https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/some-employees-are-destroying-value-others-are-building-it-do-you-know-the-difference
4. 4.Baicker, K., Cutler, D. and Song, Z., 2010. Workplace wellness programs can generate savings. Health affairs, 29 (2), pp.304-311 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2009.0626
5. 5.World Economic Forum: A healthy workforce is good for business. Here’s why, July 2023 https://www.weforum.org/agenda/2023/07/business-benefits-of-boosting-employee-health-and-well-being/
6. 6.Workplace wellbeing programmes and their impact on employees and their employing organisations: A scoping review of the evidence base. A collaboration between Health Exchange & University of Birmingham. Fenton, S-J., Pinilla Roncancio, M., Sing, M., Sadhra, S. & Carmichael, F. 11/27/204 https://www.birmingham.ac.uk/documents/research/ias/wellbeing-at-work-review-jan-31.pdf