In this white paper Patrick Woodman, Head of External Affairs at the Chartered Management Institute, discusses the importance of health in the workplace, not only for employees, but also for the bottom line. The economy is of course an important factor when it comes to health and wellbeing at work. Managers are working longer hours and many organisations can’t justify giving pay rises when budgets are tight. This all impacts morale, stress levels and sickness absence. However, Patrick highlights the true business advantages to be gained if employers invest in employee health. By implementing a well thought out health and wellbeing strategy, businesses can benefit from lower staff turnover, reduced sickness absence, and improved productivity and morale. Patrick details some initiatives that employers can easily adopt, including examining leadership styles, to show how health and wellbeing can truly be good for business.

1. Good health is good business
Executive summary
In this white paper Patrick Woodman, Head of External Affairs at the Chartered
Management Institute, discusses the importance of health in the workplace,
not only for employees, but also for the bottom line.
The economy is of course an important factor when it comes to health and
wellbeing at work. Managers are working longer hours and many organisations
can’t justify giving pay rises when budgets are tight. This all impacts morale,
stress levels and sickness absence.
However, Patrick highlights the true business advantages to be gained if
employers invest in employee health. By implementing a well thought out
health and wellbeing strategy, businesses can benefit from lower staff turnover,
reduced sickness absence, and improved productivity and morale.
Patrick details some initiatives that employers can easily adopt, including
examining leadership styles, to show how health and wellbeing can truly be
good for business.
Contents
• Introduction, Howard Hughes, Simplyhealth
• Good health is good business, Patrick Woodman (CMI)
• Simplyhealth view
• Profile of Patrick Woodman
• About the Chartered Management Institute
• About Simplyhealth
• References
www.simplyhealth.co.uk

2. Good health is good business
Introduction by Howard Hughes, Head of Employer
Marketing
We started our white paper series to examine issues that have an
effect on health and wellbeing in the workplace. So far we have
discussed absence management, the importance of culture and
many other topics that affect businesses day in day out.
The Chartered Management Institute (CMI) knows all about
the issues that are prevalent in today’s modern workplaces. We joined it to
publish research into what affects the quality of our working lives. Of course
the style of management and leadership has a big impact, but so does health
and wellbeing. Patrick Woodman from the CMI uses his expertise in this white
paper to really get to the bottom of how health is good for business.
You can download all of our previous white papers on our website at
www.simplyhealth.co.uk/whitepapers
We’ll be releasing more white papers in due course which will include:
• Combining Employee Benefits Packages – Making efficiencies
• Self funded health plans and tax efficient wellbeing
We hope that you find this white paper useful and that it gives you more to
reflect on when developing your own health and wellbeing strategy or advising
a client.
Howard Hughes
Head of Employer Marketing
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3. Good health is good business
Good health is good business
Patrick Woodman, Chartered Management Institute
The UK is enduring a prolonged economic crisis. Its effects
are far reaching and do not all show up in national statistics
for gross domestic product, nor even in individual companies’
annual accounts. They are felt in very real ways by people
working for organisations in every part of the economy, for
whom organisational change, restructuring and cost cutting
has become the norm rather than the exception. The result, as revealed by
the latest research on the subject, is that the events of recent years have had
significant effects upon the health and wellbeing of many employees.
This is cause for concern in its own right. Many employers would seek to
“Sickness absence costs minimise such an impact on the grounds of corporate responsibility, duty
are estimated to be as of care or morality. There is a large cost to society as a whole: the cost of
much as £100bn” sickness absence and worklessness from ill health is estimated to be as
much as a colossal £100bn1. From a management perspective, there’s also
a hard nosed reason to be concerned, which is that such trends risk harming
performance at an organisational level, creating a negative circle. Reduced
health and wellbeing and lower levels of employee engagement can take their
toll on organisational performance. Managing health therefore offers benefits to
employees and employers alike – not only to one or the other.
Yet, the latest research data gives cause for concern. Only 39 per cent of
managers think that their senior management is committed to employee
health, down 16 percentage points since 2007. The last five years have seen
a rise in presenteeism, with a significant increase in the proportion of those
who feel that their organisation has a culture of people not taking time off work
even when they were ill (from 32 per cent in 2007 to 43 per cent in 2012). The
average manager works 1.5 hours a day over contract – or 46 days in a year.
Ninety two per cent had experienced organisational change over the previous
year, and many more said they worked in declining organisations than in
previous years2.
With organisational performance and individual wellbeing both under strain, it
“Health and wellbeing is high time that managers and employers take seriously the idea that good
initiatives should not be health is good business. Of course, managers will be concerned at taking up
seen as a cost, but an an agenda which seems only to offer increased costs at a time when cost
investment in people” cutting is the order of the day3, but initiatives to promote better health and
wellbeing need not be seen as a cost. Rather, they can be an investment in the
organisation’s people; an investment with the potential to generate substantial
returns. Recognising the importance of employee health is not a luxury for the
good times, to be jettisoned when the going gets tough, it can come into its
own in tough times, helping employees when they need it most and supporting
higher performance levels.
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4. Good health is good business
CMI’s latest research shows that there are organisations which are creating the
right conditions for employees to work hard and create success, at the same
time as enjoying a good quality of working life. Specific programmes relating to
health and wellbeing can offer solutions to help employees deal with particular
problems and to minimise ill effects on the workplace, but the best companies
understand that support for employee wellbeing hinges fundamentally on
growing the right organisational culture.
Key to this is improving management and leadership styles. The latest
“Authoritarian and reactive instalment in CMI’s ground breaking research series on The Quality of Working
management styles are Life, published with Simplyhealth4, shows that authoritarian, bureaucratic and
associated with lower reactive management styles are more common than five years ago, shortly
levels of employee trust” before the start of the economic crisis. This may be an understandable
reaction to the economic headwinds buffeting organisations. However, from
an employee engagement and wellbeing perspective it is wholly counter
productive, as these management styles are associated with lower levels of
trust and worse wellbeing outcomes. Far better results are associated with
management styles that are genuinely accessible, empowering and innovative5.
Implementing health initiatives
As with any change programme, a range of factors are likely to be critical to
the successful implementation of a health or wellbeing programme. One simple
framework developed by PWC is based on a typical cyclical management
model with three stages; plan, execute and manage.
Key steps within these stages include assessing need, carrying out a gap
analysis to pinpoint which interventions might make improvements, identifying
risks and deciding priorities, and identifying and selection service options,
which may frequently be delivered by outside providers. The execution stage
demands that employees are engaged in what is being provided, an area
which it is important not to overlook as many programmes, even when based
on real identified needs, come unstuck as a result of employee indifference
or hostility. Clear leadership commitment, communication and changes to
the organisation’s culture can be particularly important enablers. The cycle
concludes with measurement of the impact6, to which one might add review
and action to identify and implement necessary improvements.
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5. Good health is good business
CMI’s own research with Simplyhealth strongly indicates that the
implementation of specific health initiatives cannot be considered in isolation.
As important, if not more so, is the effect of the management styles adopted in
carrying out the organisation’s business from day to day. There are strong links
between the dominant management styles within organisations and measures
of health and wellbeing, and indeed to organisational growth and decline.
Accessible, empowering and innovative styles are associated with both happier
staff and better organisational performance7. Any organisation looking to
improve health and wellbeing will find itself pushing water uphill if underlying
problems of poor management remain unchanged.
Measuring the benefits
It’s a management truism, but one which nonetheless applies to health and
wellbeing; what is measured is managed, and what is not measured, isn’t
managed. It is important therefore to set the parameters for implementation
of any new organisational health measures at the outset: data will provide the
basis for measuring and identifying how far progress is being made.
The rewards for improving health and wellbeing are likely to include measurable
effects, both upon employees and the employer, as indicated through
organisational level data.
Yet, other potential gains are no less real. Changes at an individual employee
level, such as greater job satisfaction, with higher levels of engagement and
more willingness to ‘go the extra mile’ are likely to quickly show up in measures
of employee retention, reputation as an employer of choice, productivity and
customer satisfaction.
Table 1 overleaf highlights the range of costs which may be incurred in
“Implementation of health implementing health or wellbeing programmes and the range of benefits,
or wellbeing programmes including intermediate benefits and direct financial benefits. They may include
could see reductions in indirect cost savings such as reductions in sickness absence, or more direct
sickness absence and ones such as recruitment costs, overtime payments or temporary recruitment.
recruitment costs” Income benefits may be identifiable in measures directly in terms of increased
productivity, but may be visible in increased revenues per employee8.
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6. Good health is good business
Table 1: Costs and benefits associated with wellness programmes9
Intermediate benefits Related bottom line
Programme costs
(non-financial) benefits (financial)
▼ Sickness absence ▼ Overtime payments
▼ Temporary recruitment
▼ Permanent staff
payroll
Start-up costs
▲ Employee satisfaction ▼ Recruitment costs
• Management time
▼ Staff turnover
• External consultants
• Capital equipment ▼ Accidents and injuries ▼ Legal costs/claims
• Promotion, marketing ▼ Insurance premiums
• Training etc ▼ Healthcare costs
Operating costs ▲ Productivity ▲ Revenues
• Management time ▼ Overtime payments
• Staff salaries ▼ Permanent staff
• Bought-in goods/ payroll
services
• Training etc ▲ Company profile ▼ Recruitment costs
▲ Employee health and ▼ Healthcare costs
welfare
▲ Resource utilisation ▼ Management time
Financial assessment: relate costs to financial benefits
Managing musculoskeletal disorders and stress
The benefits for employers and individuals alike may be particularly substantial
if progress can be made in tackling the two biggest causes of lost working
days; stress, depression or anxiety, and musculoskeletal disorders (MSDs),
which are responsible for some 10.4 and 7.5 million lost working days
respectively10.
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7. Good health is good business
The most common causes of workplace stress have been identified as work
pressure, lack of managerial support and work related violence and bullying11.
Management action (or inaction) is deeply connected to such factors, so there
is a real need for management action to reduce the incidence of workplace
stress. Particularly in the current economic climate, it’s clear that many
organisations are under severe pressure – often existential in scale. It’s all too
easy for that stress to transfer from the organisational to the personal. CMI’s
own research shows an increase in self reporting of symptoms of stress among
managers between 2007-2012, reported by 42 per cent in 2012, up from
35 per cent. While it may be impossible to eliminate such pressure entirely,
management styles which are more accessible and supportive should help
reduce the threat. No organisation will function at its best when employees are
over stressed and suffering ill health.
MSDs – injuries, damage or disorder affecting the limbs or the back – may
or may not be caused by injury in the workplace, but can have huge effects
on people’s lives, and can even lead to employees taking early retirement12.
Employers should consider how they can make simple adjustments to working
conditions to accommodate those with long term MSDs. Managers may need
to be trained to help them deal with staff with MSDs and make those affected
feel able to discuss their conditions. Organisational support for flexible working,
ergonomic assessments and adjustments, and attendance policies which
permit time off for medical appointments may also be needed.
Indeed, training was found to be an important factor in the success of a wide
range of health policies in the 2012 Quality of Working Life research13.
What health initiatives are most valued?
As well as tackling some of the biggest causes of ill health at work, employers
“Managers are working looking to use improvements in health and wellbeing as a device to improve
longer hours than five employee engagement and performance should consider the value placed
years ago” on different benefits by employees. CMI’s Quality of Working Life research, in
partnership with Simplyhealth, reviews the popularity of a range of benefits.
Perhaps reflecting the finding that managers are working longer hours than five
years ago, the most popular benefits related to time, such as flexible working,
options for additional holiday time or policies offering leaves of absence for
personal issues. Other popular options included private medical insurance,
healthy eating facilities, gym and sports facilities, health coaching, progressive
return to work options, and health cash plans.
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8. Good health is good business
While cost reduction is a major driver of change of many organisations, it
is particularly important to understand the benefits of such investments.
Measuring their impact will be important to developing persuasive business
cases, but if possible, it is also important to identify and gather broader
measures of employee engagement and wellbeing. Such measures have the
potential to add colour to the ‘monochrome’ financial measures and provide
insights into the longer term trends affecting employee wellbeing.
Improving line management
Whatever the individual health initiatives that an employer might choose to offer
to their employees, one thing remains clear. Organisations looking to generate
real return on investment in employee health cannot neglect the core questions
of how management culture and behaviour affect health.
Key challenges for managers include:
Listening - directors in particular need to understand that the organisation can
look and feel very different outside the senior executive team. Many colleagues
will have real and valid factors which mean they don’t feel the same way about
the organisation, which need to be recognised.
Creating high trust environments - greater trust of line managers is
associated with better health outcomes. Reassessing management styles
and becoming more empowering and accessible is not necessarily a ‘quick
win’, and may not be easy in the way of cost-cutting or restructuring, but the
benefits of building high trust environments will be worth the effort.
Motivating staff - by providing more autonomy within employees’ roles,
agreeing clear objectives, and warmly recognising success.
Managing change - the 2012 CMI/Simplyhealth research showed that 92%
of managers had experienced organisational change over the previous year.
Substantial numbers said it had decreased morale, motivation, loyalty to the
organisation, and wellbeing – so improving change management is a priority.
Building a true understanding of the implications of change and its effect on
employees is vital. Communicate clearly and involve staff in change processes.
Develop managers to manage change - managers at all levels need to be
effectively trained in the planning and implementation of change, particularly in
terms of how it affects people.
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9. Good health is good business
Simplyhealth view
So it’s official, good health does equal good business, the facts are there.
This is something that we at Simplyhealth have always understood; it is our
business after all. However, employees, managers and businesses are going
through tough times and that impacts health in the workplace. Our economy
is in poor shape, which impacts business decisions, which can in turn affect
morale at work. It’s also why managers are working, on average, nine weeks
extra per year. That’s a significant statistic, but can we really say it’s a surprise?
The CMI/Simplyhealth Quality of Working Life Research shows just how
important it is to have the right culture in your organisation to boost
productivity. How managers ‘manage’ their staff also has an impact. When
times are tough, chinks in the corporate culture will soon be felt.
Of course employees are truly aware of the hard times and understand that
opportunities are, in some cases, slim, but that doesn’t mean that they
should just be left to get on with it. There are other options and we know
that a little goes a long way. Extra hours can be rewarded by flexible working
arrangements, especially when it’s not possible to provide employees with pay
increases.
Other research we have carried out (with the CIPD) shows that health and
“Health and wellbeing wellbeing spend is actually on the increase, and this is good news. Companies
spending is on the are looking for other options, which is why we’re seeing a continual upward
increase” trend in the sales of health cash plans and self funded health plans.
SMEs tell us that the low cost and tangible nature of cash plans mean they’re
a no brainer for businesses. Self funded health plans are popular with large
corporate clients because they give them the ability to be flexible in terms of
benefit design and make tax savings.
Measuring the return on investment for health benefits isn’t always easy to
do, but when you look closely at the table put together by PwC, you can
clearly see that the wider business benefits. If you ever need to put together a
business case it demonstrates the long term impact, which can only be good
for bottom line, and good for business.
Don’t forget a summary of the CMI/Simplyhealth Quality of
Working Life Research, and other white papers, can be found at
www.simplyhealth.co.uk/whitepapers
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10. Good health is good business
Patrick Woodman profile
Head of External Affairs, Chartered Management Institute
Patrick is responsible for CMI’s thought leadership research, providing
topical insights into the latest management practice and developing practical
recommendations to help managers tackle the challenges they face. He led
for CMI on The Quality of Working Life report published with Simplyhealth in
July 2012, examining the impact of the recession on health and wellbeing. In
all, Patrick has been the author or co-author of over a dozen CMI reports and
regularly discusses CMI’s research findings and policy recommendations with
the media.
Patrick also oversees CMI’s PR, membership communications – including
Professional Manager magazine – and policy work, engaging with government
departments and Parliamentarians on management and leadership skills
issues and on workplace matters such as employee engagement, health and
wellbeing, and equality and diversity.
About the Chartered Management Institute
The CMI is the only chartered professional body in the UK dedicated to
promoting the highest standards in management and leadership excellence. It
has more than 90,000 members.
It’s the only chartered body in the UK that awards management and leadership
qualifications, and the only body that awards Chartered Manager, the hallmark
of any professional manager.
If you’re a manager that means when you join the CMI you’re making a
statement about your standards and determination to continue to develop your
management skills.
If you’re an employer that means your organisation will be able to draw on its
experience of helping to get the best out of managers.
You can find out more about the CMI at www.managers.org.uk/simply
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11. Good health is good business
About Simplyhealth
Simplyhealth are experts in providing access to quality healthcare, and
because we only focus on healthcare, you can rely on us for specialist
knowledge.
Our health plans include health cash plans, dental plans, private medical
insurance and self funded health plans.
20,000 businesses choose us as their healthcare provider, including major
brands such as John Lewis Partnership, Tesco, Royal Mail, British Airways and
Yorkshire Building Society.
We’re committed to providing exceptional personal customer service. When
our private medical insurance customers have a complex claim, we ensure
that a caring case manager stays with them throughout, arranging their
appointments and taking care of everything for them.
When customers make a cash plan claim we usually get the money back into
their back account in just a few days.
We follow mutual values and care about our communities. Each year we
donate around £1 million to health related charities and good causes.
You can find out more about our health plans at
www.simplyhealth.co.uk/business
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12. Good health is good business
References
1
Working for a healthier tomorrow, 2008 (Dame Carol Black’s review of the
health of Britain’s working age population)
2
Worrall L and Cooper C, The Quality of Working Life, 2012, CMI/Simplyhealth
3
Ibid. Cost-cutting was a driver of organisational change in 85 per cent of
cases
4567
Ibid
8
Building the case for wellness, 2008, PricewaterhouseCoopers for the Health
Work Wellbeing Executive
9
Ibid
10
Health and Safety Executive, ‘Working Days Lost’, based on Labour Force
Survey data for 2011-12 www.hse.gov.uk/statistics/dayslost.htm
Stress and Psychological Disorders, 2012, Health and Safety Executive
11
www.hse.gov.uk/statistics/index.htm
Zheltoukhova K, O’Dea L, Bevan S, Taking the strain: The impact of
12
musculoskeletal disorders on work and home life, 2012, Work Foundation,
www.theworkfoundation.com/DownloadPublication/Report/326_FFW%20
UK%20survey%20FINAL.pdf
13
Worrall and Cooper 2012
Private health insurance Health cash plans Dental plans Self funded plans
1301103
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