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Less than half of Australian employees are reporting high levels of wellbeing in 2023, a new report showed, posing a growing risk for businesses’ bottom line.
Gallagher’s latest edition of Workforce Trends Report found that only 48 per cent of 2,600 surveyed employees reported a high level of workplace wellbeing which was defined as “feeling good and experiencing fulfillment and purpose at work”. The figures represent a decline from the 52 per cent recorded in 2022.
Concerningly, younger workers also showed “significantly lower“ levels of wellbeing compared to older employees (5 per cent) according to the report, which also showed that employees above 65 had the highest level of wellbeing.
While some may be quick to label this as a “generational trend”, the report offered a “more practical explanation”.
“[Younger] employees are earlier in their careers, experiencing more life transitions and the events of the last two years have had a disproportionate impact on this population as they navigate starting and establishing a career in an unstable environment,” the report said.
In April, a separate report from University of Melbourne and YouGov showed burnout is on the rise particularly among prime aged workers or those aged between 18 and 54 in the labour force, with 50 per cent reporting they feeling exhausted at work.
While 75 per cent of those surveyed by Gallagher said wellbeing is one of their highest priorities over the next month, the report showed Australians aren’t taking enough time off despite knowing that they need a break.
Findings showed 46 per cent of employees continued working even when they should take time off.
Beyond the personal impact, the report highlighted low wellbeing, mental health burnout and workplace stress has a “significant impact on an organisation’s bottom line”.
With absenteeism due to wellbeing up 46 per cent in 2023 from 31 per cent 2022, the report argued there is a “strong economic case to take action on workplace wellbeing”.
Based on ABS data of average weekly earnings and estimated daily earnings, the report estimated that if 46 per cent of a 100 person workforce only take one day off per month, this equates to a monthly cost of $16,630.84 and an annual cost of almost $200,000.
“Importantly, this is not only the direct cost of absenteeism and does not consider the indirect costs such as manager or human resources time spent dealing with absenteeism, temporary staff, time spent training temporary staff, loss of production, quality loss or overtime,” the report added.
In addition to absenteeism, the report highlighted the situation could impose a “significant problem” in the future, as there is a higher risk of burnout among employees with lower wellbeing.
This comes as the portion of mental health-related claims increased to 9.3 per cent in 2020 to 2021.
“Australian Life Insurance companies cite mental health as one of the biggest and increasing causes of claims on disability insurance policies,” the report said.
These types of claims are also the “costliest” form of workplace injury, the report noted, as they lead to more time off work and higher compensation paid when compared to physical injuries and diseases.
What can employers do?
While the deteriorating employee experience of wellbeing poses a significant risk to businesses, the report noted it also represents “a massive opportunity for organisations”, adding “the ones who make a concerted effort to improve employee wellbeing stand to reap strong business performance outcomes”.
“Faced with the need to compete in a challenging market, increasing public awareness of wellbeing and the emergence of policies to protect employees, employees need to understand and prioritise workplace wellbeing to attract and retain top talent.”
For starters, the report called employers for the evaluation of the five factors that predict employees’ workplace wellbeing, which included mental health, sense of purpose in life, physical health, the extent to which you can be yourself at work, and psychological safety.
While listening to employees’ experiences are vital, the report highlighted the importance of taking “targeted, meaningful action”.
The report also noted that offering robust wellbeing benefits to employees makes “good business sense” for organisations, as people with high wellbeing report 2.3 times higher engagement at work, 1.7 times stronger intentions to say, 1.4 times higher self-rated performance and 1.5 times more willingness to “go above and beyond”.
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