LATEST EDITORS' PICKS LISTS MAGAZINE Follow Subscribe to the newsletter MORE EXCEL TECHNOLOGY AUDIT CAREERS WORKPLACE SUPERANNUATION TAXATION ECONOMICS LEADERSHIP ACCOUNTING Is it time to adopt staff wellbeing as a KPI? WORKPLACE LEADERSHIP 01 Nov 2021 As workplaces reset their norms to adapt to different operating conditions created by the pandemic, now is the perfect time to bridge any gaps between rhetoric and reality. By THEA O'CONNOR One of the silver linings of COVID-19 has been the spotlight on staff wellbeing. Workplaces can adopt a KPI based on staff wellbeing to show commitment. Prefer to listen to this story? Here it is in audio format. With the new understanding that employee wellbeing is a critical factor influencing which organisations will survive our new uncertain normal, many companies around the world have made it their top concern. As workplaces reset their norms to adapt to different operating conditions created by the pandemic, now is the perfect time to bridge any gaps between rhetoric and reality. Wolf Kirsten, Global Centre for Healthy Workplaces. One way to do that is to adopt a wellbeing key performance indicator (KPI), reported to the board and based on the mental and physical health of employees. “A wellbeing KPI is a good idea that is picking up significant speed right now,” says Wolf Kirsten, co-founder of the Global Centre for Healthy Workplaces, “but we have a long way to go for this to become a mainstream practice.” Jeff Kennett, former premier of Victoria and former chair of Beyond Blue, has long been a proponent of using such a measure to garner commitment from leaders, telling The Australian newspaper as far back as 2016, “that will focus their minds more than anything else”. Leadership support is, indeed, critical to achieving staff wellbeing. When an organisation’s wellbeing strategy has strong leadership support, it is 4.2 times more likely to report significant improvement in employee health risks. Measures of wellbeing Selecting what measures should form the basis of a wellbeing KPI can prove challenging. A workplace could attempt to measure employee wellbeing directly. Given that an individual’s health and wellbeing are influenced by many factors, not just work, an organisation may understandably baulk at being held accountable for this. However, tracking trends in wellbeing over time could still provide useful insights that would make it easier for employers to care for staff, when and where help is most needed. What are the best indicators to use? Kirsten points out that wellbeing includes many dimensions – physical, mental, emotional and spiritual – defying definition by a single scale. The primary goals and objectives of a workplace’s wellbeing strategy should help determine which of the many metrics available would be the most suitable. “A KPI that many organisations measure is employee engagement, and engagement is very much related to wellbeing,” he says. Advances in artificial intelligence (AI) and data analytics are making it much quicker and easier to collect information about employee wellbeing and generate insights. However, no matter how impressive the AI, workers still have to be willing to offer up their private thoughts and feelings. When The Data Analysis Bureau, a UK-based data science agency specialising in machine learning and AI solutions, was testing its recently released mental wellbeing index for workplaces, it found that the biggest challenge was allaying workers’ fears about privacy and how the data would be used. “It was critical to reassure employees that the data collected was aggregated and anonymous, so the organisation had no ability to identify individuals,” says Eric Topham, The Data Analysis Bureau’s co-founder and CEO. “When workers learned that the data was only accessible to a select number of people outside of line management, they were more receptive.” The index developed by Topham’s team measures employee mental health using a five-question survey. Employees are asked to take the survey once a fortnight, using a stress and mental wellbeing app. Once per month, they are also asked to select an emoji that best represents how they feel at the time. This allows an organisation to keep its finger on the pulse of how employees are faring and direct individual employees to relevant resources and support contacts, according to their survey results. If not wellbeing, then what? An alternative to measuring wellbeing itself is measuring workplace behaviours or job conditions known to influence employee wellbeing. The wellbeing behaviours of leaders is one possible focus, as research shows they influence employees’ health behaviours, participation in wellness initiatives, job satisfaction, stress levels and safety, says Katrina Walton, founder and director of workplace consultancy Wellness Designs. When a leader takes a break for lunch or leaves work on time, for example, this not only supports their own wellbeing, but also sends a clear signal to their staff that these behaviours are not only acceptable, but also encouraged. Safe Work Australia has identified several other factors that affect the psychological wellbeing of employees, including control over your work, supportive relationships, rewards and recognition, and role clarity. A KPI built around these would help workplaces fulfil their obligation to create a psychologically safe workplace. Supportive relationships at work have proven to be an especially potent buffer against workplace stress, but how do you turn that into an actionable, quantifiable KPI? One way is to require managers to ask about the health and wellbeing of each staff member when conducting a performance review. Providing guidance for managers on how to do this, through mental health training for example, can help alleviate any concerns by managers that they have to be a counsellor before opening up the conversation. CPA Library resource: Work wellbeing: how to lead thriving teams. Read now. Keeping it simple Given the complexities involved, it is not surprising that some organisations already using a wellbeing KPI are keeping it simple by basing it on participation rates. “While it’s not a measure of success, it makes sense to use this measure to begin with,” says Kirsten. “If no one is participating in your wellbeing program, it won’t have any effect.” Monash University, winner of the 2016 Global Healthy Workplace Award, has been using a university-wide wellbeing KPI since 2009. It measures individual participation in a single wellbeing event over 12 months. The target had originally been set at 5 per cent in order to get some easy runs on the board, then increased to at least 30 per cent of staff each year. Program activities relate to physical activity, general health, mental health and nutrition. Monash has achieved its target for the past six years. Dr Vicki Ashton, Monash University. Reported at the highest levels of the university – all the way to the chief operating officer and the vice-chancellor – the KPI has proven very valuable in raising the profile of staff wellbeing, according to Dr Vicki Ashton, Monash University’s chief medical officer and occupational health physician. “It’s helped create the cultural shift we wanted from the outset, that of strengthening the importance of health and wellbeing in the workplace for our staff,” says Ashton. The university’s wellbeing KPI is also reported to the faculties and divisions each quarter. “If the wellbeing KPI is low in a certain area, we approach that area and ask what they need and how we can best support them,” says Ashton. “We actively seek staff feedback and are looking to include other measures, such as opportunities for staff to come together.” Walton has also seen participation rates used as a wellbeing KPI in some of her former in-house wellbeing roles. “In one instance, the wellbeing KPI was linked to salary bonuses for senior leaders and middle managers, according to the participation rates of both themselves individually and their teams,” recalls Walton. “How leaders and managers were supporting the health and wellness of their team also formed part of their performance review discussion.” Another KPI Walton had used involved a target for managers to offer their staff one department-based wellbeing initiative each quarter. “We helped ensure that the initiatives offered were based on staff need, and we gave the managers resources and a budget to help them succeed,” says Walton. Successful adoption of a wellbeing KPI takes work, Walton says. “It took a lot of advocacy and relationship building to help ensure it was well received. Communicating the benefits – to help create high-performing teams – was key.” Pressure on workplaces to adopt wellbeing KPIs will continue to build, says Kirsten, given concerns about rising rates of mental health conditions, more focus on organisations’ social responsibility and growing demand for environmental, social and corporate governance reporting. Whether wellbeing KPIs can achieve their true purpose of caring for staff will depend on how they are framed, explained, executed and supported. If they are owned by employees at all levels, they have the potential to be powerful enablers of creating workplace cultures that truly care. Staff wellbeing is good for business Companies that create a culture of health by specifically focusing on the wellbeing and safety of their workers outperformed their competitors in the stock market by a factor of 3:1 from 2000 to 2014, according to a 2016 study published in the Journal of Occupational and Environmental Medicine. If a public company collects data on staff wellbeing, should it be reported on externally? Wolf Kirsten from the Global Centre for Healthy Workplaces is not a fan of the idea. “It’s very sensitive and certainly not fair to compare companies on that basis.” He gives the example of a tech company that employs lots of young people, which will likely have a much better health profile than that of a manufacturing company that employs older people, due to the age-related and socio-economic differences in their employee population, quite apart from the workplace factors. Tips for successfully employing a wellbeing KPI: Ensure heath and wellbeing are written into your workplace’s business strategy, so that the wellbeing KPI has a clear link to business goals. Wait until you have some runs on the board with your wellbeing program before introducing a KPI. This allows you to build relationships and establish trust with staff first. Invest in a communication strategy that explains the value of having a KPI – namely, to help the organisation fulfil its responsibility to care for staff and create a healthy work environment. Otherwise, it may be seen as a negative form of control and monitoring, and generate backlash. Consult staff when choosing KPI measures. Make the KPIs realistic, particularly for time-poor middle managers. If collecting personal wellbeing data, ensuring privacy and anonymity are paramount. Don’t look at the results in isolation. Investigate low wellbeing KPI hotspots to help identify causes in order to offer targeted support. If the same wellbeing KPI is to be applied equally across the organisation, all staff need to have equal access to the wellbeing programs and services. TAGS WORKPLACE LEADERSHIP COMMENTS DECEMBER 2021 READ DIGITAL MAGAZINE Like what you're reading? Enter your email to receive the INTHEBLACK e-newsletter. Enter email address MORE ON MENTAL HEALTH IN THE WORKPLACE Patrick McGorry: Why investing in mental health is good for business 01 Oct 2020 Australian of the year, researcher and renowned psychiatrist Patrick McGorry is on a mission to convince the business community of the importance of prioritising mental… Stress management: COVID-19, tax time and the sum of our fears 20 Jul 2020 From a client’s perspective, CPAs are the antidote to complex – and occasionally overwhelming – financial stress. 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