Johns Hopkins: Poor mental and physical health erodes workplace profits by driving higher turnover

Employee wellbeing hit an all-time low in 2024, according to new research from Human Capital Development Lab at the Johns Hopkins Carey Business School, which sampled 2,769 organizations with more than 1.3 million survey respondents.

This year’s data is part of ongoing research analysis that started back in 2019.

Since the COVID-19 pandemic, businesses have scaled back their wellbeing initiatives, causing employees to report a decline in their corporate wellbeing.

In fact, when more initiatives were in play in 2020, wellbeing scores are at their highest. 

To discover how HR leaders need to respond to declining employee wellbeing, UNLEASH spoke exclusively to Rick Smith, director of the Human Capital Development Lab and author of the study.

Wellbeing across different employee demographics – how should HR respond?

The John Hopkins report highlighted a number of reasons as to why employee wellbeing has declined.

For example, a reduction of flexibility, regarding flexible hours or remote work, as well as challenges associated with economic shifts related to inflation or productivity needs.

Yet the data found there was a clear difference between the wellbeing levels of managers and senior leaders, compared to employees and individual contributors, “with a particular decline in the wellbeing of younger workers”.

Smith told UNLEASH: “While we note that wellbeing at work declined in the US over the past year, the differences between the age groups is striking.

“Those in the 25 or younger and the 26-35 years old groups have the lowest levels on record. This is an alarming trend.”

What’s more, Smith also highlighted the difference in wellbeing levels of different seniority groups, stating that there’s a “significant shift by managerial level.” 

“During the pandemic, we noted that managers and executives were about the same level or lower than other employees when it came to wellbeing at work,” he adds.

With the pandemic behind us, we observe that wellbeing levels are much higher for managers and executives – while the scores for other employees have decreased.”

A growing gap between the wellbeing rates of different demographics was also raised, with female, African American, Hispanic, and younger employees all scoring lower than male, white, Asian, and older colleagues.  

The research ties employees’ decreasing wellbeing levels directly to business success.

The report states: “Poor mental and physical health in a workforce can erode profits through higher turnover,” it can therefore have a knock-on effect on “decreased engagement, reduced customer service and increased health care costs”. 

This, Smith explains, has created a gap between how leaders and their teams experience the workplace – which is continuing to grow.

As a result, leaders perceive a “normal” work environment, whereas their employees do not necessarily feel the same, highlighting a potential disconnect.

As a result, Smith offers three key pieces of advice for HR leaders – the first being to gather level skipping perspectives. 

“Given the findings, managers may not have the same experience of wellbeing as their employees – checking in and listening across levels can be critical to understanding the reality of the employee experience,” Smith advises.

He also believes that HR should also be open to individual considerations, as the pandemic saw employers offering flexibility to help address individual employee situations that affected their work. 

Now, more organizations have resumed “normal” work practices, many employees feel that their individual needs are not being addressed. 

“Some have commented that the bosses no longer care about individuals,” Smith adds. “As such, HR leaders may consider how to strike a balance between organizational standards and individual considerations.”

Finally, HR should champion better flexibility options, with Smith explaining that organizations that offer flexible work arrangements score higher in employee wellbeing. 

“While this may not be an option for all organizations, considering options for flexibility and choice can be an important factor that makes a difference for employees,” Smith notes.

He concludes by sharing that although every organization has its own challenges, HR leaders shouldn’t underestimate the effect leadership can make.

When leaders take intentional steps to shape a culture that supports wellbeing, we see meaningful improvements for employees.”