Beyond mindfulness apps and yoga: creating a healthy organisational environment for employees in UK small-caps

Before we start on this article, please know that I write this as someone who has spent more than a few hours organising rooftop yoga sessions and mindfulness seminars for colleagues in the name of employee wellbeing. And whilst I still believe those can be useful tools, recent research that came out in January of this year , from Oxford University’s William Fleming, found that almost none of these interventions had any statistically significant impact on worker wellbeing or job satisfaction. The research and subsequent media coverage really piqued our interest at Addidat HQ particularly on how this translates into the future of meaningful action for smaller, growing companies, to foster employee satisfaction and happiness, and ultimately, productivity.

In this article we address what the research is telling us about employee wellbeing programs, what industry guidance and our data tells us about current strategies being deployed by UK small-cap businesses and what trends we expect to see emerging in the future.

The pitfalls of conventional wellness programs

Workplace wellness programs have become a multi-billion-dollar industry. Companies worldwide spent $61.2 billion on wellness interventions in 2021, with this amount projected to grow to $94.6 billion by 2026*. Despite this significant investment, many of these initiatives alone yield little to no impact on employee wellbeing. A British researcher, William J. Fleming, analysed survey responses from 46,336 workers and found that participants in wellness programs such as apps, coaching, relaxation classes etc were no better off than their colleagues who did not participate. Indeed, resilience and stress management trainings appeared to have a slightly negative impact on employees’ self-rated mental health. His conclusions are in support of other contemporary research that finds “organisational interventions, such as changes to scheduling, management practices, staff resources, performance review or job design”** are more powerful in making a meaningful impact to employee wellbeing.

Simultaneously, commentators are starting to take notice of the possible risks associated with focusing on individual interventions rather than the structural features of an organisation that create workplace stress. Last month Harvard Business Review (HBR) warned of the dangers of “carewashing”***. Even if I am not sure that we need another washing-ism term, the idea that organisations which “claim to have a caring culture” must ”align rhetoric with reality” to avoid both unmanaged attrition and acute employee disenfranchisement is a proven and increasingly real risk. Particularly given the rise in individual awareness of personal wellbeing and employee sensitivity to inauthenticity from corporations.

All of the research and commentary states that instead of focusing on taking an individualistic improvement, self-determining approach to wellbeing (often done as a way of being seen to do something), employers must take the time to look closely at the way work is organised. Examining the values and practises employers want to instil, to create engaging, trusted workplaces that attract, maintain and grow the best talent is likely to be a far more successful approach.

What are small-cap companies already doing?

If focus on the structural makeup of an organisation is the critical area where employers can make a difference in employee wellbeing and satisfaction, the research and commentary tends to break this down into a number of factors; job security and fair pay, flexibility, employee emotional agency (giving employees a real voice), opportunities for meaningful training, creating options for extra-employment impact (such as volunteering), reduction in frustrating bureaucracy and quality of management.

Addidat’s proprietary data set shows that whilst some small caps are starting to make disclosures in some of these areas, there is work to be done, particularly given employee engagement is likely to be a material area for many business’s “social” strategy under the traditional ESG pillars.

1.? ? Job security and fair pay - An obvious place to start, but fair and competitive compensation is fundamental to employee satisfaction and wellbeing. Regular salary and benefits package reviews including employee ownership share schemes to ensure they meet industry standards and reflect the value employees bring to the company.

2.? ? Evolving flexibility – Around 40% of currently live AIM quoted firms state that they offer hybrid working arrangements. Giving employees reasonable agency in their working set up can offer meaningful benefit in balancing their personal and professional lives, subsequently cultivating employee happiness. We at Addidat expect that more firms will continue to use and promote hybrid working as an employee benefit, but stress that models need to evolve to ensure organisation productivity is maintained and may, for example, increasingly prescribe expected working patterns or “office days.”

3.? ? Cultivate employee emotional agency – a concept mentioned heavily in the HBR article. We take this to mean instilling real and meaningful feedback loops with employees. Employers need to regularly assess if the values and culture they have documented are a reality for those working there. This is particularly important for growing firms who should be proactively and continually adapting their people operating model to ensure culture evolves positively with scale. This is also a focus area in the updated corporate governance codes applicable in the UK. Whilst 31% of AIM quoted firms state they conduct an employee survey today, we expect this figure to go up and for better disclosures around engagement rates and the actions taken from the feedback elicited, to become the norm.

4.? ? Review employee training – not always a hallmark of employee wellbeing, but, where deployed creatively and aligned with the values of an organisation, meaningful training, beyond the mandatory compliance modules, can demonstrate the investment and care an organisation has for employees. Today around 6% of AIM quoted firms disclose an average training days budgeted for employees, yet very few disclose how many of these training days are actually taken, which we’d consider a much greater insight into the continual learning culture of a firm. We believe details on training initiatives and engagement will become more commonplace disclosures for firms really focusing on employee wellbeing and satisfaction.?

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Where can small cap organisations do more?

In addition to the four already mentioned areas of impact, creating options for extra-employment impact (such as volunteering), reduction in frustrating bureaucracy and quality of management are widely discussed as organisational levers available for employers to improve employee wellbeing.??

1. Facilitate volunteering or charitable impact - The aforementioned study by William Fleming found that the one intervention, of the 90 or so examined in the study, that actually had an impact on self-disclosed wellbeing levels was giving workers the opportunity to do charity work or volunteer. This is often where Addidat see companies start with their ESG strategy; this research suggests it should not be dismissed or forgotten as a company matures, but firms should continually reflect on how its charity initiatives evolve with the company as it grows, especially into new regions, to successfully expand the employee engagement benefits across the organisation.
2. Streamline bureaucracy – interventions such as empowering employees to challenge how to make processes more efficient, shortening meetings and making sure employees feel “psychologically safe” to improve organisational practice are cited in a recent Birkbeck study looking at staff wellbeing in the NHS****. Simple, but continuous examination of how to remove frustration and friction, it turns out, can pay dividends in employee wellbeing whilst using the full workforce to proactively resolve growing pains.
3. Improve quality of management – Research indicates that the technical competence of a manager is highly correlated to the satisfaction of an employee at work. Ensuring effective leadership training to those who are being elevated into people management roles is a key success factor for employee wellbeing. Aligning promotion criteria with organisational values is shown to be crucial in fostering overall wellbeing and authentic belief that employers can and do care about employees.

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Conclusion

At Addidat, we believe employee wellbeing is often a critical component of the "S" pillar in ESG strategies for smaller, growing firms. Employee wellbeing is intrinsically linked to productivity and initiatives can have a real impact on reducing growing pains. It’s imperative for businesses to recognise that authentic, impactful measures are necessary to foster a genuinely supportive work environment. If the trend has been to focus on individual interventions like resilience training, yoga sessions and wellness apps, recent research shows these approaches cannot work in isolation and should be additive to fundamental actions that address the core structural elements of their organisation that create friction and stress.

Fair pay, job security, flexibility, meaningful training, opportunities for extra-employment impact, streamlined processes and quality management are the real levers that improve employee satisfaction and wellbeing. By prioritising these areas, small cap companies can create a positive, engaging, and healthy workplace culture. Authenticity in these efforts is key – employees can easily discern between genuine care and mere box-ticking exercises - and token gestures will not deliver the productivity and scaling benefits that deliver return on your investment.

Finally, when disclosing your employee wellbeing strategy and initiatives to external stakeholders, focus on the data and facts that showcase your wellbeing culture; disclose training uptake as well as training days allocated, detail the process for managing employee feedback, and show you’re listening by include examples of where employees are changing the organisation.?

Sources:

*The Guardian: Work 'wellness' prgrammes don't make employees happier - but I know what does

**Employee well-being outcomes from individual-level mental helath interventions: Cross-sectional evidence from the United Kingdom

***How 'Carewashing' Alienates Employees

****New Report Provides Insights on How to Support NHS Staff Wellbeing Through Organisational Interventions

Note - Addidat data as at June 30th 2024