Why is Employee Wellbeing Important?

What poor wellbeing does

We should all know that our wellbeing is important to look after. A person’s wellbeing directly affects their physical health, mental health, social interactions and overall life satisfaction. 

So, it’s no surprise that employee wellbeing is something that companies should be considering within their strategies and embedding throughout the whole organisation.  

Poor wellbeing can have a direct negative impact on engagement, attendance, concentration and decision-making. Stress is one of the leading causes of both short and long-term sickness absence. 

The Chartered Institute of Personnel and Development (CIPD) Health and Wellbeing at Work 2025 report found that the average number of absence days per employee has risen to 9.4 days per year – the highest level in over 15 years. 

The cost of staff sickness

Research by the Institute for Public Policy Research (IPPR) shows the cost of staff sickness increased by £30 billion a year to £103 billion in 2023. Most of this increased cost is from lower productivity due to an ailment, injury or other health situation which totalled £25 billion, while £5 billion is from an increase in sick days taken by employees. 

For businesses it’s not just a wellbeing issue – it’s a productivity and performance risk that can result in costs. 

Invest in employee wellbeing 

The CIPD Good Work Index 2025 found that a quarter of employees believe work has a negative impact on both their mental and physical health. Employees who feel work negatively affects their mental health were less likely to be satisfied in their role and more likely to quit. 

Whereas investing in employee wellbeing delivers measurable business benefits according to the CIPD. As well as the chance to improve people’s health and wellbeing (54% of organisations), other key outcomes can be higher employee engagement (39%), less sickness absence (39%) and enhanced employee performance (38%). 

Financial wellbeing 

Financial pressure is also part of a person’s wellbeing and Givicle was created to make a real and meaningful difference to staff who are struggling with the cost of living It’s an easy-to-use digital platform that provides employees with confidential access to financial support in the form of pre-paid grocery vouchers when they need it the most. 

This barrier-free support system is a practical way for employers to help ease the stress of money worries and improve financial wellbeing with dignity and compassion, allowing employees to feel valued and able to stay focused, productive and engaged at work. 

Organisations can also offer services such as counselling, an employee assistance programme and occupational health. 

Benefits 

Prioritising wellbeing within a company builds trust, loyalty, a positive morale and supportive organisational culture, which in turn attracts and retains talented staff. It enhances job satisfaction, boosts productivity and adds to personal fulfilment in addition to building a positive and caring reputation for the company. 

Good wellbeing can help employees recover from illness faster and even avoid it altogether due to a stronger immune system. It can prevent stress and burnout and better equip them to respond to challenges along with giving them a better ability to cope with daily stressors. 

A healthier workforce that feels supported and valued are less likely to leave and more likely to have improved motivation, productivity and commitment. They can truly thrive and fully focus when they are at work and are also more likely to recommend their employer to others. 

Investing in the organisation 

Investing in staff wellbeing is a strategic business decision because it means a company is also investing in their recruitment and retention, engagement and performance. It cuts absence costs and helps strengthens organisations, building a sense of community in the workplace. 

So, it’s clear why employee wellbeing is important. It improves many things and ultimately, it's good for employees and the organisation.