A healthy workforce is good for business. Here's why

Employee health is an important productivity issue.

Annual health-related productivity losses cost employers $530 billion. Image:

Anniken Grønstad
Associate Professor of Organizational Psychology, Oslo New University College
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SDG 03: Good Health and Well-Being

This article is part of: Centre for Health and Healthcare

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  • Businesses that invest in their workforce’s health and well-being have a competitive advantage and increased profitability.
  • The health benefits of work largely depend on working conditions and work environment – two affordable workplace factors easily available to managers.
  • Leaders who prioritise a healthy, happy workplace can increase employee motivation and engagement.

Poor employee health is expensive. Estimates reveal that annual health-related productivity losses cost employers $530 billion, and lost production is the main cost arising from adverse employee health. Healthcare also represents a staggering cost to companies, with a substantial escalation throughout the last decade.

Because of this, healthcare costs have been termed the “real corporate tax”. What’s more, data from the UK show that an estimated 141 million working days were lost because of sickness or injury in 2018 (pre-COVID figures) and reports suggest that poor mental health in the workplace charges businesses up to £45 billion annually.

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A critical matter for organizations therefore relates to what managers can do to support and maintain employee health and well-being at work. Considering that most of us spend about half of our waking hours working and that workers bring vital competencies that employers need to achieve their corporate goals, it is important that business leaders now more than ever pay attention to their ability to accommodate the health and well-being of their employees.

A healthy workforce is good for business

Research shows that business efforts supporting a culture of health, safety and well-being pay off. An extensive pool of research demonstrates that a healthy workforce generates fewer health costs and higher productivity, and many studies connect employee health and well-being to business metrics suggesting that poor employee health and well-being can heighten costs and reduce revenue for organizations.

Case studies also show that companies with happy and healthy employees can be more profitable than competitors, and firms committed to their workforce’s health and well-being demonstrate superior stock performance. For instance, firms that have received awards for their health, safety and well-being initiatives had a 115% growth in earnings per share compared with the 27% earnings per share seen in their competitors. It stands to reason then that prioritizing employee health and well-being gives a competitive business advantage.

Having a healthy workforce largely depends on working conditions and work environment – two affordable workplace factors easily available to managers. To reap the business benefits, all initiatives aimed at employee health and well-being need to be supported by visible management dedication. To do so, an appropriate, affordable, and accessible point of departure is to take advantage of the raft of resources that already exist in the workplace. To this end, scientific evidence demonstrates that efforts to prevent illness and boost occupational health and well-being will benefit from a more comprehensive account of work-related factors in general, and psychosocial work environment factors in particular.


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How resources can help tackle work pressures

At work we often have to deal with time pressure, work pressure, frequent change and a bundle of demands and requirements. This is not necessarily bad for us. Being busy resolving exciting and meaningful tasks can boost work engagement, feelings of accomplishment, and job satisfaction– all of which are important health promoting factors. However, the demands and requirements can become too many and too big for too long, there might be overwhelming time-shortages, job roles and responsibilities can become blurry, and feelings of overload and failure can accumulate as a result. This is how work often leads to negative stress, burnout, ailments and ultimately sickness absence and exit from the labour market, and such conditions influence productivity and profit negatively.

To do something about this, demands at work need to be met with resources. Job resources comprise aspects of work that are functional for goal achievement, they can promote growth, and reduce the psychological and physiological costs associated with job demands. Through resources, workers accumulate capacity to deal with job demands and the potential adverse effects stemming from them will be alleviated. This, in turn, reduces work-related stress, helps prevent illness and absence, promotes employee health and well-being at work and maintains the balance between efforts required and rewards received.

What can be considered a resource, however, varies between workplaces and it is therefore crucial that leaders tailor strategies to their organization. In some workplaces, autonomy and flexibility are the most important factors. In others, social support and organizational culture are key drivers. Additional resources include, but are not limited to, job security, management support, co-determination, procedural justice, rewards, career prospects, acknowledgements, and feedback.

Building a culture that prioritises health and well-being

While many business leaders are concerned with economic growth, it can be easy to forget that workforce health is an important productivity issue and that lower productivity stemming from employee ailments eats into profits. Organizations that prioritize employee health, safety and well-being are not only likely to reduce costs and increase revenue - they also foster the development of a supporting culture that strengthens employee engagement, motivation, and commitment to the company’s goals and success. In doing so, these employers improve their branding and appeal, in turn enabling them to attract, recruit, and retain top-performing talent.

The potential business benefits of boosting health and well-being at work should therefore loom large in the minds of managers. One of the best, most visible and affordable tools to harness the power of these benefits and bring them to scale is readily available to leaders in every organization.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
BusinessJobs and the Future of WorkHealth and Healthcare SystemsWellbeing and Mental Health
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