Productivity among British companies remains well below pre-crisis levels and looks set to stay that way for the next five years. Jamie True, CEO of employee well-being provider, LifeWorks, looks at the impact of well-being on productivity and why companies need to start taking it seriously. 

UK productivity has flat-lined since 2008 and we’re now around 25% less productive than other major economies we compete with.

The UK earned the nickname “Procrastination Nation” after a 2017 study of 3,000 European employees by the Workforce Institute showed that UK workers are all round less productive than their continental peers.

We spend the least amount of time actually working at work, and we’re more distracted by social media at work than employees in other countries.

UK productivity per hour is 35% below the German level, and the French can produce the average British worker’s output per week and still take Friday off, according to Sir Howard Davies, former Director General of the Confederation of British Industry (CBI).

Meanwhile, wages remain stagnant for most companies, unable to justify wage increases.

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Economic experts have warned that this austerity will continue well into the 2020s, meaning that by 2021 average earnings will be below their 2008 level.

One leading think tank, The Resolution Foundation, claims that this decade is set to be the worst for pay growth since the Napoleonic Wars.

As a consequence, British families are suffering the biggest financial squeeze since the 1950s. This will only intensify the productivity stalemate.

Work-life balance 

Yet the Institute for Employment Studies says we’re working the longest hours in Europe and have the worst work-life balance. This combination is adversely affecting productivity and work performance as well as putting workers at greater risk of mental health and heart problems.

Could this be why the UK is trailing almost bottom of G7 and G20 countries on productivity per capita?  With Brexit looming, companies need to directly address their productivity issues now, otherwise they won’t be competitive when we leave the EU.

Well-being and productivity are linked

There are many factors that influence productivity, but the business case linking employee well-being and productivity is increasingly hard to ignore.

Studies show that worker well-being and the well-being of an organisation are inextricably linked.

Our own data shows that 1 in 7 employees who contact our employee assistance programme service say their performance at work is impaired or severely impaired as a result of their state of well-being.

Research by leading workplace well-being experts, Professor Sir Carry Cooper and Dr Paul Litchfield identifies three ways in which higher levels of well-being can lead to increased performance.


  • Improving cognitive abilities and processes—enabling workers to think more creatively and be more effective at problem solving
  • Influencing attitudes to work—increasing workers’ inclination to be co-operative and collaborative
  • Improving physiology and general health—giving workers greater levels of stamina, energy, and resistance to illness


A Department for Business, Innovation & Skills study also found that an improvement in employee well-being has a positive impact on productivity, quality of output or services, profitability, and job satisfaction.

And the positive financial impact is measurable; according to Gallup, companies with highly engaged workforces outperform their peers by 147% earnings per share.

It’s a no-brainer really.  Few people would disagree that a workforce in a good state of health and well-being will contribute to improved business outcomes.

Human nature will tell you that employees thriving in all elements of well-being—physical, mental, social, and financial—are healthier, happier, more engaged, and more productive.

Strategic workplace well-being still in the minority

Whilst there are signs of ‘green shoots’ with some forward-thinking companies reaping the benefits of taking well-being seriously, they’re still in the minority.

Research by the Chartered Institute of Personnel Development (CIPD) revealed that just 8% of UK organisations have a standalone well-being strategy that supports the wider organisation strategy, with 61% of organisations being reactive rather than proactive in their approach.

The cost of this inaction is high—UK companies lose £57 billion in productivity annually due to poor health and well-being.

They also experience 137 million lost work days a year, 70 million of which are due to mental health issues alone. Studies show more than 1 in 3 workers achieve less than they would like due to poor mental health.

Worryingly, productivity levels amongst stressed managers are below 70%, according to The Chartered Management Institute’s Quality of Working Life Report.


Companies must take up the gauntlet to address productivity

At a time when the national focus is on productivity, what can companies do to start closing the productivity gap whilst economists and the government work out big issues like skills shortages, transport, and digital infrastructures?

Businesses must change the way they view their employees, supporting them in both work and life.

Technological change, consumer expectations, increased workloads, and tighter margins have made workplaces more complex, demanding, and stressful.

Combined with personal factors such as lifestyle, financial worries, and family issues like child and elder care, poor employee well-being is something all companies will face. People’s needs and challenges don’t disappear when they walk through the office door.

Investing in total well-being pays back through better productivity and performance, loyalty, retention, and lower sickness absence costs.

Businesses have to make the step change from ad hoc well-being initiatives and integrate well-being into their business strategy.

Well-being has to include good working practices, management, culture, and proactive well-being programmes embedded at the core of the company’s operations to achieve optimum well-being.

Managing employee well-being is risk management.  We analyse and address risks in other areas of business to make sure we achieve our business objectives, and employee well-being should be no different.