How does Employee Wellbeing impact Workplace Productivity? 

Employee wellbeing

Keeping employees healthy and happy is important if you want your business to be productive. As companies try to grow and make more money, they’re realizing just how much their workers’ overall wellbeing impacts how well they perform on the job. 

This means all aspects of an employee’s life – physical health, mental health, emotional stability and financial situation. When people feel supported and taken care of in all those areas, they’re way more likely to bring their best to work. You get better engagement, less sick days, and ultimately, higher productivity across the board. 

This guide is going to dive into how employee wellbeing affects workplace productivity. You’ll learn real-world strategies, see examples of what other companies are doing, and get actionable tips to help build a maintain a high-performing team at your own company. 

Understanding Employee Wellbeing

In the UK, promoting employee wellbeing has become a top priority for many organisations. According to a report by the Chartered Institute of Personnel and Development (CIPD), nearly three-quarters of organisations have a dedicated employee wellbeing strategy in place. This shift in focus reflects the growing recognition that a healthy, happy, and engaged workforce is crucial for driving business success. 

Three-quarters of companies have actual plan for keeping their workers healthy and happy these days. Here’s a breakdown of the different dimensions of employee wellbeing: 

Physical –  Diet, exercise, sleep, overall fitness type stuff. Workers feeling physically solid are way less likely to call out sick and they got way more energy to get work done. 

Mental/Emotional – This is the state of mind. Workers handling their stress, anxieties, depression. A mentally/emotionally together workforce can keep up with the job demands, think clearer and make smarter decisions. 

Financial – Being able to properly manage finances. Budgets, saving, planning for the future and all that. Money worries interfere with productivity and focus. 

When companies put some effort into wellbeing initiatives, they start seeing benefits like: 

  • More engaged workers invested in their work 
  • Less sick days from burnout, stress-illness type scenarios 
  • lowered employee turnover since employees feel valued and want that stability. 
employee wellbeing

The Impact of Employee Wellbeing on Productivity

Studies and real-life examples show there’s a clear link between the two. When employees are feeling good mentally and physically, they’re in a much better position to bring their best to work with increased productivity levels and overall organisational success. Research from the University of Warwick found that happy employees were 12% more productive compared to those feeling less happy. This highlights just how much an employee’s overall happiness impacts their ability to perform well and be efficient workers.  
Alternatively, ignoring employee wellbeing can negatively impact organisations. High stress, burnout, bad work-life balance etc. all lead to drops in productivity, more sick days taken, higher staff turnover. Not only does it hit profits, but it impacts a company’s reputation too, making it harder to attract top talent.  
The smart move is prioritising employee wellbeing with tailored initiatives that cater to different needs in the workforce. That positive, supportive environment breeds productivity, engagement and all-round business success.  

Physical Wellbeing and Its Influence

When employees are feeling good in their bodies, they’re way better equipped to handle all the demands that come with the job. They’re also less likely to be calling out sick or dealing with health issues that can slow them down. Physical wellbeing can be improved by prioritising and providing the following: 

          Exercise and Fitness 

  • Provide on-site gym facilities or subsidized gym memberships 
  • Organize group fitness activities like sports teams or challenges 
  • Regular physical activity boosts energy, reduces stress, and improves overall health

    Nutritious Eating 
  • Offer healthy food options through cafeterias or nutritious vending machines 
  • Balanced diets help avoid the post-lunch productivity dip from unhealthy eating 
  • Employees can maintain consistent energy levels 

    Ergonomic Workstations 
  • Properly designed with ergonomic furniture and equipment 
  • Prevents musculoskeletal issues and potential injuries 
  • Increases comfort for optimum performance 


By putting in the effort to promote physical wellness through targeted programs and creating an environment that encourages healthy habits, workplaces can foster a workforce that’s productive, and engaged. At the end of the day, investing in physical wellbeing is an investment in the overall success of the business

Mental and Emotional Wellbeing in the Workplace

Mental and emotional wellbeing are critical components of overall employee wellbeing and have a significant impact on workplace productivity. Mental health issues have become a growing concern, with reports indicating that one in six workers experiences a common mental health problem such as anxiety or depression. 

Experiencing high levels of stress, anxiety, or depression, means employee’s ability to concentrate, make decisions, and perform at their best can be severely impacted. This can lead to decreased productivity, increased absenteeism, and higher turnover rates, all of which can have a negative effect on a company. 

Here are some examples of how positive employee mental and emotional wellbeing can be maintained in the workplace: 

Stress Management Programs: Stress management workshops, mindfulness sessions, or on-site counseling services can equip employees with the tools they need to manage stress more effectively, reducing the risk of burnout and improving overall mental wellbeing. 

Flexible Work Arrangements: Flexible work schedules, remote work options, or compressed work weeks can help employees better balance their personal and professional responsibilities, reducing stress and improving work-life balance. 

Employee Assistance Programs (EAPs): Access to confidential counseling services through EAPs can offer employees a safe space to address mental health concerns and seek professional support when needed. 

Mental Health Awareness and Destigmatisation: Open and honest conversations about mental health, and creating a supportive and inclusive culture, can help destigmatise mental health issues and encourage employees to seek help when needed. 

Financial Wellbeing and Its Role

Financial wellbeing is often overlooked as a critical component of overall employee wellbeing, but it plays a significant role in workplace productivity. Financial stress can have a profound impact on an individual’s mental and emotional state, affecting their ability to concentrate, make decisions, and perform at their best. 

When employees are preoccupied with financial worries, it can lead to decreased productivity, increased absenteeism, and higher turnover rates. This can have a ripple effect on an organisation’s bottom line, as well as its ability to attract and retain top talent. 

To address financial wellbeing in the workplace, organisations should consider implementing the following strategies: 

Financial Education and Literacy Programs: Offering workshops, seminars, or online resources that provide employees with financial education and literacy skills can empower them to make more informed decisions about budgeting, saving, and managing their finances. 

Retirement Planning Resources: Offering resources and support for retirement planning, such as pension plan information sessions or access to financial advisors, can help employees feel more secure about their future financial wellbeing. 

Flexible Compensation and Benefits: Exploring options for flexible compensation packages and benefits that address financial wellbeing, such as student loan repayment assistance or financial wellness incentives, can help alleviate financial stress for employees. 

Investment allowance

Creating a Wellbeing-Focused Culture

Implementing individual wellbeing initiatives is just one part of the equation; to truly reap the benefits of employee wellbeing and its impact on workplace productivity, organisations must foster a culture that prioritises and supports the overall well-being of their workforce. 

Creating a wellbeing-focused culture requires a top-down approach, with leadership teams demonstrating a genuine commitment to the physical, mental, emotional, and financial wellbeing of their employees. This can be achieved through the following strategies: 

Leadership Buy-In and Engagement: Senior leaders and managers must not only endorse wellbeing initiatives but actively participate and serve as role models for promoting a healthy work-life balance and prioritising self-care. 

Clear Communication and Awareness: Regularly communicating the importance of wellbeing, sharing success stories, and promoting available resources and programs can help raise awareness and encourage employee participation. 

Flexibility and Work-Life Balance: Offering flexible work arrangements, such as remote work options or flexible schedules, can help employees better manage their personal and professional responsibilities, reducing stress and improving overall well-being. 

Employee Feedback and Involvement: Actively seeking employee feedback and involving them in the development and implementation of wellbeing initiatives can help ensure that programs are tailored to their specific needs and preferences. 

Recognition and Rewards: Recognising and rewarding employees who actively participate in wellbeing programs or demonstrate healthy behaviors can help reinforce the importance of wellbeing within the organisational culture. 

By creating a culture that prioritises and supports employee wellbeing, organisations can not only improve workplace productivity but also position themselves as employers of choice, attracting and retaining top talent in a competitive job market. 

Measuring the Impact of Wellbeing Initiatives

Implementing employee wellbeing initiatives is an important step, but it’s equally to measure the impact of these programs to ensure their effectiveness and justify continued investment. By tracking relevant metrics and key performance indicators (KPIs), companies can gain valuable insights into the success of their wellbeing strategies and make data-driven decisions for future improvements. 

Here are some common metrics and KPIs that organisations can use to measure the impact of their wellbeing initiatives: 

Absenteeism Rates: Tracking the number of employee sick days or unplanned absences can provide insights into the effectiveness of physical and mental wellbeing programs. A decrease in absenteeism rates may indicate improved overall employee health and well-being. 

Employee Engagement and Satisfaction Surveys: Regularly conducting anonymous surveys to gauge employee engagement, job satisfaction, and overall well-being can help organisations identify areas for improvement and measure the impact of wellbeing initiatives on employee morale and motivation. 

Productivity Metrics: Depending on the nature of the business, organisations can track metrics such as output per employee, project completion rates, or sales figures to assess the impact of wellbeing initiatives on overall workforce productivity. 

Healthcare Costs and Insurance Claims: Monitoring healthcare costs and insurance claims related to stress, mental health issues, or chronic conditions can help quantify the financial benefits of wellbeing programs aimed at preventing or managing these conditions. 

Employee Turnover and Retention Rates: Tracking employee turnover and retention rates can provide insights into the impact of wellbeing initiatives on employee satisfaction and loyalty. A decrease in turnover rates may indicate improved job satisfaction and a supportive work environment. 

Participation Rates: Monitoring the number of employees participating in various wellbeing programs, such as fitness classes, mental health workshops, or financial education seminars, can help organisations gauge the level of engagement and tailor their offerings accordingly. 

Return on Investment (ROI): Calculating the ROI of wellbeing initiatives by comparing the costs of implementing the programs with the financial benefits, such as reduced healthcare costs, increased productivity, and lower employee turnover, can help justify continued investment and demonstrate the business value of these initiatives. 

Effective measurement and evaluation strategies should be tailored to the specific needs and goals of each organisation, taking into account factors such as industry, company size, and workforce demographics 

By implementing comprehensive measurement and evaluation strategies, organisations can not only assess the effectiveness of their wellbeing initiatives but also identify areas for improvement, make data-driven decisions, and demonstrate the tangible business benefits of prioritising employee well-being.