NHS could save £200mn per annum and improve patient satisfaction, research reveals

New research by academics at the University of East Anglia (UEA) suggests that NHS Trusts in England could save more than £200mn a year by managing staff well.

The report by the What Works Centre for Wellbeing, found Trusts that made the most extensive use of good people management practices were over three times more likely to have the lowest levels of staff sickness absence and at least four times more likely to have the most satisfied patients. 

They were also more than twice as likely to have staff with the highest levels of job satisfaction compared to NHS Trusts that made least use of these practices, and over three times more likely to have staff with the highest levels of engagement.

No link was found between people management practices and patient mortality. 

The research examined whether good people management is linked to high levels of wellbeing and better performance. It found that NHS Trusts ranked higher when they:

• made extensive use of training
• carried out performance appraisal 
• encouraged team working
• had clear roles for staff
• allowed staff to take decisions about how to do their job
• encouraged supportive management
• involved staff in decisions about their departments and the Trust

Researchers Dr Chidiebere Ogbonnaya and Prof Kevin Daniels, of UEA’s Norwich Business School, found Trusts that made the most use of good people management practices had sickness absence rates of around 3.7%, whereas the Trusts that made the least had absence rates around 4.4%.

They estimate that if all Trusts reduced their absence rates to 3.7%, this could lead to an annual saving of more than £200mn in sick pay for the NHS.

The findings have implications for management in the NHS and elsewhere, as well as patients and policymakers.

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Dr Ogbonnaya, a lecturer in human resource management, said: "A key priority in recent healthcare debates concerns the need for respectful and responsive services that meet patients’ expectations, values and preferences. Our study provides guidance on important good people management practices for improving healthcare workers' wellbeing and the quality of services that patients receive.

"Our key message is that good people management practices are essential for promoting workers' wellbeing and ensuring happier patients. Improvements in patients' satisfaction may not necessarily depend on major reforms and restructuring of the healthcare sector, but perhaps the provision of working practices that foster workers’ skills, personal growth and development.

“Healthcare leaders should pay attention to how these practices may be deployed towards promoting the quality of care that makes a difference to patients."

Prof Daniels, professor of organisational behaviour, added: “In the context of the recent announcement on the new Industrial Strategy and the UK’s productivity lag behind other advanced economies, our findings point to the importance of having high quality jobs and other good people management practices for both promoting wellbeing, reducing absence and narrowing this productivity lag.”

Dr Ogbonnaya and Prof Daniels wanted to find out whether they could predict improvements in wellbeing - assessed as job satisfaction - and performance, assessed as worker engagement, patient satisfaction, sickness absence and patient mortality, from the use of good people management practices.

They analysed data collected in 2012, 2013 and 2014 from between 135 and 243 NHS Trusts in England.

They examined whether changes in wellbeing and performance outcomes from 2012 to 2014 were related to people management practices in 2013. By analysing changes in this way, they were able to show with greater certainty than has previously been possible that good people‐management practices in 2013 led to improvements in wellbeing and performance outcomes in 2014.

Nancy Hey, Director of the What Works Centre for Wellbeing, said: "The evidence shows us that being employed, and the quality of our work, has a big impact on our wellbeing, beyond income alone. This research confirms the importance of choice, autonomy and a supportive working environment in boosting people's job and life satisfaction.

“NHS staff have a vital, but difficult job to do, and this paper shows what a difference it makes to staff, patients, and budgets, when wellbeing is a policy priority. And even beyond the NHS, we know that a focus on management practice can increase wellbeing and performance at a relatively low cost."