Q4 2021: The future of workplace wellbeing

The COVID-19 pandemic has changed many parts of our lives, but it is perhaps our working lives where there have been the biggest changes. Large swathes of office workers flocked to their homes in March 2020, and many continue to work there most of the time. In some cases, this has become a permanent move as business look to cut the costs associated with managing an office space. It is without doubt that these changes will have had a material impact on the wellbeing of those in work. For some these changes bring greater flexibility and lead to an improved work-life balance. While for others these changes have led to increased social anxiety and loneliness. Organisations of all sizes are currently considering what policies to put in place to adapt to this changing working environment. Those organisations that take the wellbeing of their workers into account when doing so are more likely to be successful.

Empirical evidence suggests that good working relationships, having interesting work and a good work-life balance are three of the most important factors for workplace wellbeing (Krekel et al, 2018). It is in businesses best interests to have a happy workforce, as the evidence suggests that happier workers are more productive (De Neve, 2019). Higher wellbeing at work is also associated with lower staff turnover and higher profitability (Krekel et al, 2019). Workplace wellbeing interventions aimed at promoting both the health and wellbeing of staff have been shown to have positive results (Ammendolia et al, 2019).

Although these programs were shown to have positive outcomes, in other settings these interventions may not produce the equivalent results. This is because context matters. As businesses look to consider what interventions are appropriate, it is vital to tailor these interventions to the needs of the workforce (Biron, 2014). Workplace wellbeing surveys are a good starting point for understanding these needs. A key outcome from the literature is that continuity of effort and adaptation of workplace wellbeing policies is critical to their success (Herrera-Sanchez et al, 2017). In achieving this, businesses with learning structures and good governance are best placed to facilitate these adaptations (Daniels et al, 2021). In addition, the position that senior managers take in responding to wellbeing interventions put in place is key to how junior staff perceive the intervention (Passey et al, 2018).

Based on this evidence we have put together a range of recommendations to support workplace wellbeing:

1. Staff surveys: Wellbeing interventions cannot be put together effectively without understanding the issues and pressures that they are looking to alleviate. These surveys can be structured in many ways but at the very least they should be looking to capture both the level of wellbeing across the workforce and employee’s preferences towards certain interventions. This doesn’t necessarily mean asking employees directly “would you like X or Y policy to be put in place?”. But instead asking questions like “what impact would more of X have on your wellbeing?”.

2. Leading by example: The culture within a business is an important leading indicator for whether it will be able to successfully implement wellbeing interventions. Culture is generated from good leadership, and this means making sure that managers and leaders within a business are supportive of wellbeing interventions. In addition, leaders that share personal stories related to their wellbeing with employees are more likely to create a culture where employee wellbeing thrives. This is because by leading by example means that other staff are then more likely to feel empowered to share their own wellbeing stories, helping to solve issues such as presenteeism quicker.

3. Education: Providing sessions that allow employees to learn about how best to manage their wellbeing can have significant benefits. This supplies employees with information to solve issues earlier and quicker than otherwise. It can also help to develop a healthy culture within the business.

4. Safety nets: Regardless of preferences, industries, or the overall level of wellbeing within a workforce, all businesses need to put in place safety nets to support their staff. Wellbeing policies can only do so much and there will undoubtedly remain a portion of the workforce that need additional support. Providing employees with access to professional mental health support will again allow for issues to be solved quicker and earlier than otherwise. Knowing this support is available would likely lead to lower staff turnover.

For more detail, please take a look at the full report linked below.

Q3 2020: Analysing the impact of COVID-19 on wellbeing

In our previous research article, we suggested policy solutions for the recovery period that were consistent with our overarching goal: increasing happiness and wellbeing in society in a sustainable and equal way. We think that this should be the main goal of governments in developed countries. However in order for this to be the main goal we need to be able to measure and track our progress against this goal. Fortunately, the Office for National Statistics (ONS) has been doing this in the United Kingdom since 2011. This means we have a highly valuable yardstick with which to measure how the UK is progressing. Huge amounts of attention have been paid to the financial impacts of COVID-19 and although they have been significant, this information only tells us part of the story. It is important to measure progress on a wider range of variables. All these variables should feed through to the overarching goal of sustainably and equally increasing wellbeing.

Our research article includes four main takeaways:

The initial impact of the pandemic on life satisfaction in the UK

Source: Office of National Statistics. Note: The frequency of the data in this chart changes from quarterly to weekly at the end of Q1 2020.

1. The initial impact of the pandemic on wellbeing was large. Even though it may not look like it, the decline life satisfaction scores shown in the chart to the right is large. Since 2011, the lowest quarterly life satisfaction score, on average, was 7.35 (the highest was 7.71 in 2018). These weekly scores were produced by the ONS during the pandemic to gauge an understanding of how the pandemic was influencing citizens wellbeing. The average life satisfaction score across these high frequency surveys is 7.00, which is 0.65 lower than in Q1 2020, almost double the range since the inception of this measure (range is 0.36). A note of caution is that the sample of these weekly surveys is much smaller than the quarterly surveys (approx. 1,500 vs. 30,000)

2. Assessing how wellbeing is likely to change in the future is useful for informing policymakers. In the research article we provided an illustrative example of how wellbeing may change going forward based on forecasts of financial variables and known historical relationships between these variables and life satisfaction. It is highly useful for policymakers to be aware of how wellbeing is likely to change in the future in response to both policies and market dynamics. Policies could then be tweaked accordingly in order to support citizens wellbeing.

3. Non-financial indicators are likely to have had a larger influence on wellbeing than financial indicators. By combining the data from the chart above with our forecast of how life satisfaction is likely to change in response to changes in financial variables, we were able to conclude that non-financial indicators (e.g. mental/physical health, trust in government, personal relationships) played a larger role in the recent decline in life satisfaction than financial variables (e.g. income or employment).

4. Wellbeing inequality is likely to increase as a result of the pandemic. Data suggests that those on lower incomes are likely to have a larger financial hit as a result of the pandemic than those on higher incomes (with the majority of those on higher incomes actually able to increase their savings this year). It is also well known that changes in income matter more for life satisfaction at lower incomes. Therefore, we should expect that the distribution of life satisfaction will widen as a result of the pandemic, meaning wellbeing inequality has increased. This should be a key concern for policymakers.

Please click on the link below to read about this in more detail. Comments are welcome.

Q2 2020: Responding to COVID-19 by prioritising sustainability and wellbeing in the recovery

With thanks to Maximilian Magnacca Sancho for his help with this article.

The COVID-19 pandemic is changing the way that we live our lives. As time passes it is becoming apparent that even once the lockdown policies have been eased and some level of normality has been resumed, the new world that we live in will be different to the one we knew before. This article focuses on emerging trends that have largely taken place as a result of COVID-19, or in some cases the pandemic has simply accelerated a trend that was already occurring. We then look to offer a range of public policy solutions for the recovery period, where the overarching objective is to increase wellbeing in society in a sustainable way.

But first, before we get to the policy solutions, briefly, what are the main economic and wellbeing effects that we have seen as a result of COVID-19? In 2020, it is expected that the fall in overall economic output is going to be larger than during the financial crisis in 2008. Much of this is due to the level of decline in economic activity as a result of the UK governments lockdown policy. This was a necessary decision in order to reduce the spread of the virus and ensure the NHS still has capacity to treat those that have unfortunately caught the disease. However, it has led to a significant income shock for both households and businesses. Levels of consumer spending have declined rapidly, and large portions of the labour market are now out of work. Alongside sharp falls in measures of economic performance, measures of wellbeing have declined rapidly as well. Increases in measures of uncertainty have mirrored increases in anxiety. While, social isolation policies are having a large impact on measures of happiness.

The UK government responded to the shock posed by COVID-19 with a range of policy interventions to provide funding to those that have been most impacted. At a macro level, the long-lasting effects of this crisis will be more pertinent if economic activity does not respond quickly after the government’s schemes have ended. Large portions of UK businesses have limited cash reserves to fall back on in a scenario where demand remains subdued for some time. However, even if the recovery period is strong there will still have been some clear winners and losers during this crisis. Younger workers, those on lower incomes and those with atypical work contracts are the ones that have been most heavily impacted. Whilst those on higher incomes, that are more likely to be able to work from home, have increased their household savings during this period, due to less opportunities to consume.

The policy solutions outlined below aim to be complementary of one another and look to amplify observed trends that are positive for wellbeing and to provide intervention where trends have been negative for wellbeing:

1.      Climate at the centre of the response: This is less a policy recommendation and more a theme for the response. However, our message here is that increased public spending projects, focused towards green initiatives should be combined with a coherent carbon tax policy which influences incentives and helps to support the UK’s transition to a low carbon economy.

2.     Labour market reforms: The government should look to develop a centralised job retraining and job matching scheme that supports workers most impacted by COVID-19, helps to encourage structural transformation towards emerging industries and increases the amount of highly skilled workers in the UK workforce.

3.     Tough decisions on business: Some businesses will require further assistance from the UK government in the form of equity funding, rather than the debt funding seen so far. This should be done on a conditional basis, requiring all these businesses to comply with the UK’s climate objectives and should only be provided to businesses in industries that are expanding or strategically important to the UK economy.

4.     Modernising the regions on a cleaner, greener and higher level: Looking to build on the governments ‘levelling up the regions’ policy to reduce regional inequalities, our policy consists of government funded infrastructure spending that includes green investments for regions outside of the UK’s capital.  

5.     Harbouring that rainbow effect: Building on the increased community spirit that has been observed during the pandemic, this policy solution looks to increase localised community funding to maintain social cohesion and support those with mental health issues. 

Lastly, as the policy recommendations focus on expanding public investment to support the recovery, it is important to consider what this means for public debt sustainability in the UK. The conclusion is that as a result of the low interest rate environment, the most efficient way out of this recession is to borrow and spend on projects that will increase resilience to future shocks and support the UK’s transition to a low carbon economy.

Please click on the link below to read about this in more detail. Comments are welcome.