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Employee Wellbeing – Why Does it Matter?

This article was written by Maximilian Weidlich, a Policy Analyst for the BSB. It first appeared on the Responsible City blog to promote World Mental Health Day (Wednesday 10 October).

 

Over recent years, the banking sector and financial services more widely have shown an increased focus on the issue of wellbeing in the workplace, in particular with respect to mental health.

To explore the topic of wellbeing, we must first seek to define it. I use ‘wellbeing’ here as an umbrella term for physical and mental health as well as subjective wellbeing, which is often referred to simply as happiness.

Experts from a wide range of organisations, such as the What Works Centre for Wellbeing agree that almost nothing has as great an impact on our wellbeing as employment, and this impact can be both positive and negative. A healthy and supportive work environment can have a positive impact on the wellbeing of employees and, by extension, their families and wider society.1  The personal resilience and wellbeing of employees in the banking sector has, however, shown to be a key area of concern. In 2017 the Banking Standards Board’s (BSB) survey of over 36,000 employees working in 25 banks and building societies in the UK, showed that 26% of respondents agreed with the statement: ‘Working in my organisation has a negative impact on my health and wellbeing’2. As we better understand how work can impact individual wellbeing (both positively and negatively), the responsibility of organisations and their leaders to effect change grows.

Employee wellbeing is important to organisations, both because employee care is the right thing to do and because — as a growing body of evidence shows3— it is linked to better business outcomes, such as:

  • improved customer service,
  • lower employee turnover,
  • reduced costs in terms of days lost to sick leave and long-term absence (but also in terms of presenteeism, where people go to work when they shouldn’t), and
  • improvements in individual performance and wider productivity.

Research also suggests that happiness is correlated with being more likely to take care of oneself4, as higher levels of subjective wellbeing have been linked to positive behaviours such as wearing seatbelts and not smoking. Arguably, this link between positive wellbeing and positive behaviours can extend to the workplace, where healthier and happier employees may also be more likely to care for their customers and treat them fairly.

Many organisations have invested large amounts of money in corporate wellbeing programmes, for example by providing discounted gym memberships or through healthy eating initiatives. A more comprehensive approach will also consider underlying organisational and cultural factors that impact on employee wellbeing. The BSB’s research5 suggests that a key factor linked to higher levels of employee wellbeing is trust.

For example, the BSB’s 2017 Assessment findings indicated that employees who believe their work negatively impacts their wellbeing also felt that they could not trust the motives of their senior leaders. Our analysis of focus groups showed that employees in firms with higher levels of employee wellbeing highlighted the importance of flexible working arrangements, an observation that has been confirmed in numerous other studies. However, a number of employees working in business areas with lower level of employee wellbeing felt that their firms did not genuinely care about employee wellbeing but pursued flexible working policies solely for other business reasons, such as reducing the cost of office space. Unsurprisingly, the BSB’s survey also suggests that employee wellbeing is correlated with feeling respected at work.

Many firms have ambitious wellbeing agendas; however, it is vital that senior leaders understand the relationship between employee wellbeing and wider organisational culture. Building the trustworthiness of banks and building societies requires a genuine commitment to improving employee wellbeing, not simply to increase productivity and strengthen employee engagement, but for the purpose of higher wellbeing itself. Improved wellbeing is likely to be entwined with positive outcomes for the company, customer outcomes and wider society.

The UK’s financial services industry has made a commitment to address the issue of mental ill-health and combat the stigma that enshrouds it. Organisations like Mind and the City Mental Health Alliance are important leaders in this area as they bring together businesses to create a culture of openness. Pioneering initiatives include InsideOut, a forum where business leaders speak out about their own experiences, strengthening both speak-up culture on mental health and trust in their organisations’ support systems. The Lord Mayor’s ‘This is Me Campaign’6 brings the topic into the spot-light in order to reduce the stigma and raise awareness of wellbeing more widely.

Such initiatives, to name just a few, along with today’s World Mental Health Awareness Day, are good opportunities for leaders to demonstrate why their employees’ wellbeing matters.

 

1 https://whatworkswellbeing.org/product/unemployment-reemployment-and-wellbeing/

2 https://www.bankingstandardsboard.org.uk/annual-review-2017-2018/assessment-findings/theme3

3 See, for example, https://www.whatworkswellbeing.org/product/why-invest-in-employee-wellbeing/

4 https://whatworkswellbeing.org/blog/happy-people-wear-seat-belts-risk-taking-and-wellbeing/

5 https://www.bankingstandardsboard.org.uk/annual-review-2017-2018/

6 https://www.thelordmayorsappeal.org/a-healthy-city/this-is-me/

Senior Managers and Certification Regime

Exploring how the SMCR - and especially Certification - can be implemented in the most effective way across the sector.

The Senior Managers and Certification Regime is a major regulatory change that will affect all banks and building societies. Responding to recommendations by the Parliamentary Commission on Banking Standards, the government and regulators have together developed a comprehensive framework to ensure better accountability and responsibility for behaviour, competence and culture in banks and building societies. The new framework provides an opportunity for the industry to focus on and demonstrate a culture of professionalism. We are working with firms and regulators to facilitate this, including areas where a common approach across firms could support both the objectives of the regime and the skills and development of the people covered by it.

Professionalism

Evaluating whether a more 'professional' approach to banking would improve behaviour and competence across the industry.

The Parliamentary Commission on Banking Standards found that 'banking culture has all too often been characterised by an absence of any sense of collective responsibility to uphold the reputation of the industry', and argued that a greater focus on professionalism could be an answer to this. Working with a leading team at the University of Leeds, we are researching the issues around professionalism in banking. In particular, we are reviewing how professional qualifications are currently used across the sector, and at whether a stronger role for professional bodies, along the lines seen in some other sectors, like medicine or law, would help raise standards. To inform this work and develop a rounded picture of 'professionalism' and what it means in banking, we are surveying banks and building societies, professional bodies and a wide range of other interested groups, including consumer bodies and investors.

Assessments

Providing an honest and impartial assessment to Boards of progress against objectives on behaviour, competence and culture.

The BSB assessment exercise presents Boards with an objective and impartial view of their firm's culture, identifying where things are working well and recommending areas for improvement. It draws on information not only from Boards and senior teams, but also from employees, investors (or members), trade unions, customer groups and other relevant bodies. In doing so, it will provide constructive challenge to each firm individually, while building a collective understanding of common issues across the industry, or sectors within it. We undertook our first annual assessment exercise in 2015 with ten firms (Barclays, Citi, HSBC Bank, Lloyds Banking Group, Metro Bank, Morgan Stanley International, Nationwide, RBS, Santander UK and Standard Chartered). The BSB itself will not publish individual assessment reports - each firm owns its own report - but key themes and messages will be set out in the BSB's annual report, the first of which will be published in Spring 2016. Given that Board engagement is central to the assessment work, only firms that have their headquarters in the UK are eligible for the full assessment exercise. All firms, including branches of firms headquartered overseas, will however be included in a focused membership-wide survey, which will allow each participating firm to benchmark itself against its peer group.

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HAS YOUR BANK FAILED TO RESPOND ADEQUATELY TO A COMPLAINT?

If your bank/building society has not responded adequately, or in time, to a complaint that you have already made, you can register your complaint with the Financial Ombudsman Service. Which offers a guide on consumer rights when taking a complaint to the Financial Ombudsman Service.

ARE YOU SEEKING GUIDANCE ON YOUR FINANCIAL AFFAIRS?

If you have a problem or query relating to your financial affairs, or are seeking personal finance advice or guidance, there is free, impartial information available from the following organisations:

ARE YOU CONCERNED ABOUT ACTIVITIES CONDUCTED IN YOUR INDUSTRY?

If you work in the financial services industry and are concerned about any activities conducted by your employer or any other firm or individual, you may find the Financial Conduct Authority and the Prudential Regulation Authority's guidelines on whistleblowing helpful. It explains what constitutes whistleblowing, and what procedures are in place to respond to blow the whistle and how your anonymity would be protected. Public Concern at Work, the whistleblowing charity, also offers support and advice to individuals and employers about how to report concerns and how to establish whistleblowing frameworks.

ARE YOU SEEKING AN INDEPENDENT FINANCIAL ADVISER?

If you are seeking the services of an independent financial adviser, Unbiased may be able to help, or if you are looking for more general financial guidance, the Money Advice Service may be a useful place to start.