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 2021: The determinants of national wellbeing

In our previous research, we have dedicated much of our time to studying the determinants of wellbeing at the individual level. We used the main findings from this research to build the Exploring Happiness Index, that allows individuals to track their wellbeing over time. We are now turning our attentions to wellbeing on a national level. That is, we are looking to identify what exactly it is that causes citizens in one country to be happier than another.

The best source of data regarding countries wellbeing is the Gallup World Poll and these data are summarised each year in the World Happiness Report. In the survey, Gallup asks people to imagine a ladder, with the lowest rung representing the worst possible life and the highest rung representing the best possible life. The scale of this ladder is from 0- 10. The results show a large amount of variation across countries.

Through data analysis, it is possible to identify a range of factors that explain a significant proportion of the variance in average wellbeing across countries. The World Happiness Report identifies six factors, which when taken together, explain 76 per cent of the variation in average wellbeing across countries. Those six factors are as follows:

• Trust: which can be measured in a number of different but typically by using measures of perceptions of corruption. See full definition.

• Generosity: the proportion of people who have donated money in the present month.

• Social support: the proportion of people who have relatives or friends they can count on to help them whenever they need them.

• Freedom: the proportion of people who are satisfied with their freedom to choose what they want to do with their life.

• Health: years of healthy life expectancy.

• Income: GDP per capita.

The findings from this research tend to be supported by other empirical analyses that consider the main determinants of national wellbeing (e.g. OECD (2012). However, this topic is much less well researched than the topic of wellbeing at the individual level. There remains scope for additional empirical analyses that test whether additional variables or different groups of variables could be more effective at explaining the variation in national wellbeing.

In this research article we also discuss wellbeing inequality. We reiterate that progress should be measured against the goal of both a high average level of wellbeing within a country and a low level of variation around this mean.

We conclude the article by discussing two areas where further research would prove useful. The first is the extent to which cultural factors play an important role in determining national wellbeing. As shown in the chart above, Latin American and Caribbean countries have a high level of wellbeing, given their income level. This may be due to cultural factors but further research is necessary to confirm this hypothesis.

The second is the relationship between environmental quality and wellbeing. The implications of climate change are likely to increasingly impact our daily lives and therefore we could expect this to become an increasingly important factor in determining national wellbeing in the future. This remains speculative for now, but will be an important area of research in the years ahead.

Q2 2021: The use of data to improve human lives

In our Q1 2021 research article we discussed how to structure policy analysis in order to improve human lives. Part of our proposed framework was creating a dashboard of economic and social indicators that allows policymakers to produce data and values-driven policies. The idea is that the trends observed in the data should form the policy strategy of the government - thereby increasing transparency and accountability, as the government is clear from the outset with regards to what they a looking to achieve.

The link between the governments policy strategy and the policies that get put into practice is that the strategy should inform where resources are spent and attentions are focussed. The individual policies will look to generate the optimal allocation of resources with respect to the the governments overarching policy strategy. The strategy will also help to lock in formal objectives for the government and the dashboard will show how the government is performing against these objectives.

The aims of this approach are multi-faceted. In particular the emphasis in this article is towards increasing trust in public institutions. Countries with higher levels of trust in the governments tend to have happier citizens, all else equal. We also saw that countries with higher levels of trust performed better during the recent COVID-19 pandemic. In some advanced economies, such as the US, trust in government has been steadily declining for some time. 

In the paper we look to outline guiding principles for how to structure a framework for using data to form a governments policy strategy, as well as principles for building the dashboards too. These are briefly outlined below, and explained in more detail in full article.

The slides from the presentation in the video above are available here. Or, to read the full research article, please click on the link below.

Q1 2021: Policy analysis to improve human lives

The COVID-19 pandemic has shone a spotlight on how governments formulate their policies and has led to a widespread discussion about the social contract and what really matters. Increasingly, people are keen to know what and who is being considered when the government makes policy decisions that affect the lives of its citizens. In addition, there have been a number of calls from social scientists more recently to place wellbeing at the centre of policy analysis.

Traditionally, policies will be considered using cost-benefit analysis. Put simply, this is the process of measuring the benefits of a policy relative to its costs. This includes costs and benefits that are easily measured directly in monetary units, as well as less tangible costs and benefits, such as nature or health, which are then converted into monetary units where possible. Policies with the best benefits to costs ratios are the ones that are chosen to be put into action.

Most policymakers will agree that the objective of public policy is to maximise human welfare across the population. Since this is the case, measuring wellbeing more directly in policy analysis is likely to an improvement as compared with more traditional approaches which essentially look to proxy welfare . The new methods being proposed focus on producing a metric to measure how we can live long, healthy and happy lives. This combines life expectancy with measures of subjective wellbeing to produce wellbeing-adjusted life years (either known as WELLBY’s or WALY’s). In this way cost-benefit analysis can be used in very similar ways to the current approaches, except with wellbeing units playing the central role.

Both the current approach and the new wellbeing approach are not without their challenges. We outline these in detail in the paper but we briefly summarise some of the challenges below:

+ Methodological challenges in policy analysis

• Valuing statistical lives: Since policies affect human lives, it is necessary to try to value each persons life. Depending on the method used, the valuation figure can vary widely.
• Equality: Policies will impact different groups of society unevenly and it is important to capture this in the analysis.
• Sustainability: Policies may impact both current generations and future generations. It is a challenge to consider the extent to which this should be considered in the analysis. For example, a policy could reduce wellbeing today, in order to reap wider wellbeing improvements in future years.
• Isolating impacts: Often, a policy change will impact wellbeing across a number of dimensions that might be inter-related. It is important to isolate the individual impact of each of these dimensions on wellbeing, to avoid double-counting in the analysis.
• Uncertainty: Due to uncertainty about the future, often, assumptions need to be made in the analysis, and forecasts may prove to be inaccurate. These inaccuracies could significantly impact the policy proposal and lead to unintended consequences that weren’t considered in the analysis.

We conclude our article by giving our views on how best to structure policy analysis in order to improve lives. We split this into three categories.

+ A new policy framework for improving lives

The policy strategy

We believe that a dashboard of economic and social indicators should be created, which will require the government to form a policy strategy that is both values and data driven. The data production would be managed by the national statistical office, and governments would be required to create transparent objectives for policy, based on the trends in the data. This would need to be updated periodically, in order to respond to changes.

How to structure policy analysis

We believe that the following filtration process should be used for sorting policies (in order of preference).

1. First, where the wellbeing effects can be estimated, this should be used above any other approach. This should be considered the gold standard in policy analysis.

2. Second, where wellbeing effects are difficult to estimate, but we are confident that the monetary approach accurately captures the welfare effects of a policy, then we should use this method instead.

3. Third, where neither approach is adequate, this should be flagged as a future area of wellbeing research. We support the recent suggestion to create a wellbeing policy agency that will help to generate new evidence to be used in policy analysis.

+ Creating an environment for progress in policy

Outside of the policy analysis we believe there are a few ways that should help to create an environment for progress in policy.

• Effective transparency: Public officials should be transparent about the indicators and method that is used when making policy decisions. Effective transparency matters in a world of increasing information. This means layered information for different audiences and being clear aboutwhere the uncertainties lie.
• Evaluation and feedback: The policy process should produce a discussion paper where experts are able to comment on a policy action before it is put into place. This will reduce the likelihood of unintended consequences and refine the quality of the proposal.
• Diversity: The group of people who produce policy proposals should be as representative of the population they are producing these proposals for as possible. Greater diversity of thought, background and experiences will help to create more sophisticated, balanced and fair policy proposals.

+ Facing methdological challenges

• The question of valuing statistical lives is a difficult one. Current approaches using wellbeing units better match the observed valuation that can be inferred during the pandemic. These methods will need to be refined further however. Importantly, we believe that valuing Life years is a more proportionate and fair approach than valuing lives. This view is supported by the general public.
• We believe that the empirical approach during the policy analysis process should be adjusted for instances where investments today have large impacts on future generations (e.g. climate change). In these cases, the discount rate should be near to zero.
• Regarding distributional concerns, it is our view that these should be included within the empirical framework of the policy analysis where it is possible to do so. In cases where this is not possible, it is important that these remain considered qualitatively within the analysis. For example, in a case where a policy only has a small net social welfare benefit but is likely to negatively effect a marginalised group in society, this qualitative analysis could shift the policy to be rejected.

The slides from the presentation in the video above are available here. Or, to read the full research article, please click on the link below.