In today’s rapidly evolving work environment, employee health and well-being are no longer a nice-to-have but a must-have for businesses that aim to succeed. A recent study conducted by McKinsey reveals that lower employee well-being is associated with higher rates of disengagement and attrition. This, in turn, could result in a median-sized S&P company experiencing annual losses in productivity ranging from $228 million to $355 million. According to Gartner’s recent research, only 31% of Employees Report They Are Engaged, Enthusiastic and Energized by Their Work. At the same time, HR departments are becoming increasingly data-driven.
This brings us to a critical intersection: How can People Analytics be utilised to track, improve, and maintain employee mental health and overall well-being?
The Urgency of the Matter
The importance of prioritizing employee health and well-being has become even more critical in a world that has moved past the pandemic. According to the World Health Organization, during the first year of the COVID-19 pandemic, there was a 25% rise in the global prevalence of anxiety and depression, underscoring the heightened urgency. This is further supported by financial indicators, as indicated in McKinsey’s recent report, which demonstrates that companies boasting strong employee well-being outperform the market by a factor of 2.8x. Consequently, the focus has shifted beyond mere human resources concerns; it now centres on delivering tangible business value.
Key Measures to Track
So, what should you assess? Beyond the typical productivity and engagement Key Performance Indicators (KPIs), here are some recommendations:
- Conduct a psychological risk assessment to evaluate employees’ exposure to psychosocial hazards and identify and address psychosocial risks in the workplace.
- Keep an eye on absenteeism and presenteeism rates.
- Track workplace injury and illness including Lost Time Injury Rate’s (LTIR), to evaluate workplace safety and its impact on employee well-being and performance.
- Collect quantitative and qualitative input through Employee Climate/Engagement Surveys, focusing on factors such as perceived stress levels, workload, job satisfaction, flexibility, work-life balance/conflict, energy management, and available support. This helps in monitoring and nurturing a positive and supportive organizational climate and culture. But note these surveys are distinct and NOT the same as psychological risk assessments!
- Examine employee turnover and retention, complemented by insights from exit surveys and interviews.
Leveraging Predictive Analytics
With the power of predictive analytics for good, you can proactively tackle issues before they escalate and provide more personalised and targeted insights and interventions as opposed to a one-size-fits-all approach. For example, analysing trends in these metrics can help forecast potential burnout risks, identify potential vulnerable groups, or show likelihood/risk of people leaving the organisation over the next 6-12 month’s to enable better support and early intervention.
Insights from McKinsey’s recent paper on re-framing employee health
McKinsey has recently published a paper following their health institute survey across 30 countries where they propose reframing employee health, by moving beyond burnout to positive holistic health. The paper indicates that fostering holistic health in employees not only improves their overall quality of life but also significantly impacts economic factors. It is noted that improving employee well-being could add substantial value to national GDPs and reduce costs associated with lost productivity due to employee disengagement and attrition.
The study explored the relationship between workplace demands (factors requiring cognitive, physical, or emotional effort) and enablers (aspects that provide positive energy and offset job demands) in influencing employee health. The findings revealed that workplace enablers, like meaningful work and psychological safety, are more influential in determining an employee’s holistic health compared to demands. Additionally, the research suggests that demands are more predictive of negative outcomes like burnout. This re-framing of employee health moves away from traditional approaches of viewing ill-health as a business cost to viewing good health as a business benefit.
GSK’s adaption of the Williams (1994) Pressure vs Performance Curve (see image below) comes to mind as a useful toolkit to self-assess and measure where people are and ensure they are not rusting or burning out.
It illustrates the strong correlation between pressure levels and performance outcomes and emphasizes that most individuals require some level of pressure (e.g., when facing deadlines), as it drives them to accomplish tasks. The curve also underscores that productivity reaches its peak when individuals are operating within the “stretch zone.” However, it is important to note that there is a point at which increased pressure yields diminishing returns, akin to athletes who may injure themselves through overtraining. To maintain health and sustainable performance over time, it is necessary to transition or oscillate between these various levels of pressure. A high degree of self-awareness is crucial for recognizing when one is under excessive strain and needs to recalibrate. Ultimately, personal growth often occurs when individuals are positively stretched beyond their comfort zones. Nevertheless, it can sometimes be challenging to distinguish between healthy stretching and unhealthy strain (referred to as the ‘zone of delusion’). Healthy and high-performing individuals and teams possess the ability to recognize when they are entering the strain zone and have a strategy in place to return to the comfort/stretch area.
Other corporations such as Google and Salesforce have already embraced the use of people analytics to assess the health and well-being of their employees. They employ artificial intelligence and machine learning techniques to establish connections between well-being and various factors, including productivity, working hours, and even email response times. Some organizations have also explored harnessing behavioural data, like interactions with software and systems (e.g., swipe data for building access, remote log-in), in conjunction with other HR data points such as annual leave to foster improved flexibility and well-being. This data allows for the detection of instances where employees are consistently working beyond their scheduled hours, or frequently working during unsociable times, such as late evenings and weekends, while not taking sufficient annual leave. Such insights enable organizations to identify and provide more personalized support. However, it is important to address ethical and privacy concerns in this process, emphasizing transparency and informed consent. The primary goal should always be to benefit employees rather than to be confrontational or catch them off guard.
As remote work continues to be a significant aspect of our lives, tracking digital well-being is set to become even more critical. In the coming years, expect to see a rise in tools and wearable technology that can measure digital fatigue and recommend timeouts based on continuous monitoring and tracking of behavioural data.
The intersection of employee well-being and people analytics is not merely a passing trend; it has become a fundamental necessity in today’s business landscape. Utilizing analytics, HR departments can offer valuable insights that not only enhance the employee experience but also have a substantial impact on overall business performance.
Nevertheless, it is paramount for organizations to approach the examination of employee health and well-being data with a steadfast dedication to ethical standards and safeguarding privacy. Well-defined policies, transparent practices, and a commitment to enhancing employee well-being should serve as the guiding principles in these endeavours while upholding the rights and privacy of individuals. By understanding and leveraging this intersection, companies can create a healthier, more engaged workforce, driving both human and business value.
Further Reading and Resources
- Reframing employee health: Moving beyond burnout to achieving physical, mental, social, and spiritual health | McKinsey
- Gartner HR Research Finds Only 31% of Employees Report They Are Engaged, Enthusiastic and Energized by Their Work
- COVID-19 pandemic triggers 25% increase in prevalence of anxiety and depression worldwide (who.int)
- Gartner’s 2021 Report on Employee Well-being
- McKinsey State of Organizations 2023
- Using Data to Improve Employee Health and Wellness (hbr.org)