New economic research shows wellbeing is worth small business investment
Xero, the global small business platform, is asking Kiwi small business owners to consider their wellbeing approach and policies following new research that demonstrates the significant financial benefits of wellbeing initiatives.
Commissioned by Xero and conducted by the New Zealand Institute of Economic Research (NZIER), the economic modelling shows for every dollar a small business owner invests in organisational wellbeing initiatives for their staff, they can expect to see a return of up to 12x within a year.
Craig Hudson, Managing Director of Xero New Zealand and Pacific Islands, says small businesses are the engine room of Aotearoa’s economy and responsible for 28% of New Zealand’s GDP, employing more than 630,000 people (approximately 29% of all New Zealand employees).
“When Kiwi small businesses succeed, our whole country succeeds. It’s encouraging to see the economy recovering after the challenges of 2020. But now’s the time for all small businesses to reset for ongoing growth in the long term,” says Hudson.
“It’s time to check if you are truly looking after your people. Last year, COVID-19 pushed wellbeing to the forefront for all of us and showed us the importance of looking out for one another in the workplace.
“But we need to make sure we hold on to these benefits as a country. We now know categorically that wellbeing delivers efficiency and productivity gains for businesses. Put simply: If small businesses are ignoring wellbeing, they’re wasting money,” says Hudson.
The return for investing in wellbeing was measured through staff productivity improvements. The economic research analysed two key areas for small businesses to invest in:Organisational wellbeing:What: Creating a wellbeing culture in the workplace that supports the physical and mental health of staff.
For example, wellbeing education programmes, fostering environments supportive of mental health, and organising specific activities designed to improve staff wellbeing.ROI: NZIER research reveals investment in organisational wellbeing has an average return on investment of 5:1, and up to 12:1Employee Assistance Programmes (EAP):What: Offering staff reactive assistance programmes with professional counseling to help them with their mental wellbeing.ROI: NZIER research reveals investment in employee assistance programmes has an average return on investment of 3.6:1, and up to 5:1.
Craig Hudson says much of the return on investment for wellbeing comes from businesses avoiding the negative impacts of having employees with poor wellbeing.
“By fostering a workplace with a focus on wellbeing, we can destigmatise and address employee mental health problems proactively before there becomes a bigger productivity problem,” says Hudson.
“For example, our small business initiative The Check In has five steps to create a wellbeing-focused workplace with an estimated return of 8.5:1 - or $8.50 for every dollar invested.
“Simple things like getting together as a workplace to celebrate success in a more relaxed social environment or having one-on-one conversations with employees about their lives are small steps you can take to shift the culture of your workplace towards being more open and inclusive.
“As well as being proactive with employee wellbeing, small businesses also benefit from providing reactive employee assistance programmes like professional counselling.
“On average, an employee’s decision making and productivity is negatively impacted by poor mental health for around three months intermittently across a whole year if no one intervenes.
“Imagine what this would mean for the economy as a whole if people engaged with these programmes at the start of an episode, rather than waiting to reach a critical point.
“Up to 900,000 Kiwis are already eligible for counselling and support through the Xero Assistance Programme. So many small businesses don’t need to make any additional investments to begin seeing the benefits.”About Xero
Xero is a cloud-based accounting software platform for small businesses with 2.45 million subscribers globally. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device. Xero offers an ecosystem of over 800 third-party apps and 200 plus connections to banks and other financial partners. In 2020 and 2021, Xero was included in the Bloomberg Gender-Equality Index and in 2020, Xero was recognised by IDC MarketScape as a leader in its worldwide SaaS and cloud-enabled small business finance and accounting applications vendor assessment.