No Time for Employee Welfare? That'll be £830,000. Cash or Card?
- Kathy Ratcliffe
- 5 days ago
- 3 min read
"I haven't got time," is the No.1 reason why people rebuke what it would take to set things straight on employee welfare. The longer a company leaves its culture in dysfunctional mode, the more likely you are to hear it said that "nothing's going to change around here."
You'll find a lot of links below backing up these fiscal assertions, and if you'd like more proof that this situation is unsustainable, see what Harvard and Gallup have to say.
"The need, in a post-pandemic world, to support employees with their mental health has never been stronger. Greater wellbeing means a happier, healthier and more productive workforce. The engineering industry at large has taken progressive steps towards talking more openly and making positive changes to the way mental health is approached - but there’s always more that can be done."
So says the author linked here; while decision makers are alive to the fact that personnel welfare is a profit-related issue, well-proportioned action is a giant step, one that many leaders hesitate to take. CEOs may believe they are already on the case with fish-n-chip Fridays and toolbox meetings. Peppercorn approaches don't achieve anything.
If anything, they lead to further entrenchment of resentment when they're given up on.
So just how much is lost by harbouring negativity? Can we put a figure on that?
4 key problems are commonly cited in surveys; here's a ballpark estimate of costs from each of them (drawn from publicly available data and calculated here for SMEs with an estimated £5m turnover & 50 employees):
Low morale is estimated to cost £1m per year for a company employing 200 people. The circumstances are varied, so tracking outage is extremely hard. But some organisations have come up with the round Million in telling the tales of woe in larger enterprises - two examples are linked below. One quarter of this figure:
£250,00.
(And leaving even less room for doubt;)
Silo mentality (“that’s not my job” and role-prejudiced decision-making) typically loses 30% of annual revenue. Impacts hit housekeeping, communication, production flow, quality control, customer relations and employee retention. This article details the many ways in which silo mentality has such an expensive effect ; let's be cautious in echoing those findings by estimating a loss of
£250,000.
Employee turnover: the lowest possible sum is £15,000 per person needing to be replaced based on minimum wage, including procurement, onboarding, training, development and colleague support. Most sources average each person lost at
£30,000.
Communication issues; In 2021 the Society of Human Resource Management estimated poor communication systems cost small businesses in the USA an average of $420,000 per year. That translates in British pounds to around:
£300,000
Total estimated cost on an annual basis;
£830,000
Let's say your company is much healthier than these cold statistics would suggest, and you're only losing half that amount. Even so, a milder case loses £415,000 every year!
People are the lifeblood of every company; industry has a long history of draconian attitudes towards the workforce which increasingly hits profitability as times change towards people-centric priorities. In light of these findings, perhaps it would be good to have a conversation, so that you can explore how to convert the high price of negativity into profitable engagement, cost-effectively...
kathy@worldlinetraining.com is here to help you move into excellence - because she wants to see British engineering bring itself out of ancient history and do well with what it has. Contact me about a free Assessment - no strings attached.
Can you really afford to do nothing? Do something constructive today.
#culturalintelligence #negativity #communication #change #costofdisengagement #lowmorale #silomentality #staffturnover #workingenvironment #mentalhealth
Comments