Is wellbeing a missing link in our search for productivity growth?

Blog posts

15 May 2018

Stephen BevanStephen Bevan, Head of HR Research Development

There can be few sectors of UK industry where investment to drive up productivity is more important than in manufacturing. As a sector, it has witnessed an explosion of initiatives in recent years to boost the output of its businesses for every hour its employees work. Total Quality Management, Six Sigma and Lean Production are all examples of regimes which have been widely adopted in an effort to generate high quality and productive output. Each of them, to a greater or lesser extent, explicitly recognise that a motivated, skilled and agile workforce is essential to their success.

But in today’s fast-paced, intense and rapidly changing world of work, many UK employers are finding that the wellbeing of employees feels increasingly fragile. The proportion of sickness absences from work linked to mental health problems remains a concern, and the wider challenges of poor financial and emotional wellbeing are gaining more attention.

The research

In a study conducted by IES, and published by EEF, The Manufacturers’ Organisation, we took a closer look at the role of employee wellbeing in driving productivity growth. We found that there is room for improvement.

The research, based on a survey of around 100 UK manufacturers, a literature review and some employer case studies, shows that many companies have successfully implemented practices such as lean production methods, smart investment in technology and efficient supply-chain management in an effort to improve productivity. However, only a minority are investing in employee health and wellbeing initiatives which target the psychological and mental health of employees.

A focus on traditional health and safety

Research conducted across the world shows that improving manufacturing workforce wellbeing – in distinction from health and safety alone – has the potential to improve labour productivity by, on average, 10 per cent. This productivity impact is most pronounced when the mental health of employees is positive and when employees operating in ‘lean’ production environments are given appropriate support, training and a ‘voice’ in the way production processes are run.

The study’s survey of UK manufacturing firms shows strong commitment among many to employee health, safety and wellbeing. However, the majority of investment here remains in traditional areas of risk assessment, prevention and rehabilitation for those workers exposed to physical hazards.

Mental wellbeing should be a priority

The lower priority attached by these employers to the mental wellbeing of employees and the so-called ‘psychosocial’ work environment within which they work was striking. Over 60 per cent of manufacturers intervene to assess the risk of physical injury and to promote better physical safety. In comparison, fewer than 15 per cent assess the risk that work will damage mental health and only one in five invest in measures to promote mental health.

Given the prevalence of mental illness among UK workers and the lost productivity resulting from sickness absence, the research suggests that some UK manufacturers are missing out on the chance to boost their productivity by failing to attach enough priority to the mental and emotional wellbeing of their employees.

The report presents case studies from four UK and international businesses who have invested in wellbeing programmes and it also highlights some of the steps that businesses can take to improve the mental wellbeing of their workforce.

The EEF already provides support to UK manufacturers on productivity improvement and conducts an annual survey to look at patterns of sickness absence in the sector. IES is hopeful that this latest study will help EEF members and the wider manufacturing sector to make a business case for investing in workforce wellbeing, and, in particular, mental wellbeing.

Read the full report

Unlocking employee productivity

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.