Poor mental wellbeing and its effect on businesses is a major and fast growing challenge facing the modern workplace. Whilst most decisions are informed by financial targets and measures in business, opinion is divided on whether the impact and outcomes of wellbeing investment – a relative newcomer to the corporate table – should also be judged on financial terms.

From the (mostly) bygone days of considering it a just a ‘nice to have’ benefit, corporate wellbeing has come a long way in recent years. Increasing requirements for ESG (Environmental and Social Governance) and cultural change has seen CEOs understanding wellbeing as a  lever to drive greater business outcomes and remain relevant in the current market.

But in these testing times of the economic uncertainties, The Executive and the Board are faced with hard decisions around what would benefit the business and its shareholders, customers and people the most. Sometimes, striking the balance between these stakeholders is easy and fair, other times it can come at the cost of one of them, which more often is the employees. This is in spite of the recent IIRSM report, which revealed that the cost of poor mental health has surged by 25% in the last two years, despite the growing awareness and abundance of solutions in the wellbeing landscape.

Deloitte’s seminal white paper, Refreshing the case for investment, calculated the financial returns of a well-run wellbeing programme at up to 11:1, a figure still widely quoted by many wellbeing providers. But for many organisations, wellbeing ROI is still an abstract concept, and certainly not the basis for strategic decision making. This puts wellbeing at a firm disadvantage, in a business world driven by decisions made on  a cost versus benefit basis.

If we viewed wellbeing investment as we do IT infrastructure, recognizing people as the essential ‘infrastructure’ of the business, the organisational landscape would undergo a significant transformation. Just as IT is critical for the effective functioning of an organisation, prioritising and measuring wellbeing would be fundamental for sustainable success.

It’s important to point out that ROI is by no means the sole measure of wellbeing success, far from it. Measurement and reporting should not be the primary focus. It’s a mechanism that can unlock internal support and access to a wide variety of initiatives and approaches that provide nourishing experiences, more supportive cultures, and happier (and more productive) staff. If approached strategically, calculating ROI also does not have to mean spending all your time buried in analytics and not focusing on the activity itself, which is another common objection. 

But whilst the impact of solutions are yet to be widely assessed in fiscal terms, there is at least industry consensus around the financial cost of the problem.  You will struggle to find a wellbeing provider who doesn’t quote Deloitte’s £56B figure (annual cost of poor mental health to UK economy) somewhere on their website. So If we are judging the issue in fiscal terms, then why not the solution?

The problem is by no means limited to larger organisations. How do we ensure that the smaller companies don’t slip through the net? How might  a cash-and-time-strapped SME (who make up around 60% of the workforce) decide which course of action is best to solve their high turnover rate? Are they destined to make decisions based on gut feeling and testimonials? By what measure would they then be able to gauge whether the initiatives they implement were having any impact on the wider organisation? These are the types of challenges that smaller companies often face in order to compete with their larger counterparts.

Wellbeing also lacks recognised standards and consistency. In health and safety there is the All Injury Frequency Rate (AIFR) calculator, which brings standardisation, and allows effective comparison, consensus and benchmarking. In lieu of any other standardised impact metrics, consensus around how ROI is calculated might allow the industry to regulate itself a little better. But, for standardisation you need regulation, a separate can of worms that is not for this article!

As a final thought, it is worth looking at other industries to understand the impact that ROI assessment has provided. In marketing, the widespread adoption of sophisticated ROI measurement systems were introduced in the early 21st century. These systems had a profound impact on the industry by enabling marketers to assess the efficiency of their strategies, optimise spending, and allocate resources more effectively. This led to greater accountability, improved decision-making, and generally improved overall performance. Just imagine if we were able to say the same thing about the wellbeing market, how different might the working landscape become?

ROI and wellbeing might be uncomfortable bedfellows, a meeting of the human and the business. But in a time when the workforce is facing fundamental shifts and challenges, and with current wellbeing programmes in the spotlight for falling short, increased awareness of ROI can be an excellent driver of a more considered, informed and effective approach. It’s time we were a little less squeamish of measuring wellbeing return and move into the 21st century.