At a glance
- Health can be meaningfully modified by factors outside traditional healthcare systems, including work factors.
- Employers have considerable opportunities to improve health through six modifiable drivers: social interaction, mindsets and beliefs, productive activity, stress, economic security, and sleep.
- Globally, improving employee health and well-being could create $3.7 trillion to $11.7 trillion in economic value.
Imagine a world in which employers make evidence-based investments in the health of their employees. In return, they reap a manifold benefit to those investments: their employees thrive, their business thrives, and the societies in which they operate thrive. There's a positive opportunity that arises when employers address the inherent interconnectedness between work and health.
The McKinsey Health Institute (MHI) has previously identified 23 drivers of health (see sidebar “The 23 drivers of health”).1 Employment can greatly influence some of these drivers, such as social interaction and sleep. In this article, we zoom in on six drivers of health that employers can influence and could be wise to support. By improving employees’ health, employers could add trillions of dollars to the global economy and have a positive impact on society. When employers and employees work together to improve modifiable drivers of health, everyone benefits.
Modifiable drivers of health in the workplace: What does the research say?
Six modifiable drivers of health in the workplace—social interaction, mindsets and beliefs, productive activity, stress, economic security, and sleep—were identified from the growing body of research that connects the dots among drivers of health and the workplace. Researchers are building a greater understanding of how employers can address modifiable drivers to create change in favor of optimal employee health.
Considering that the average person spends a third of their life at work (more than 90,000 hours in a lifetime),2 employment can be a critical piece of the puzzle when working toward the goal of improving global health. MHI analyzed 26 workplace factors to understand how they influence a range of health- and work-related outcomes across 30 countries.3 That research showed there are important differences between the workplace factors that lead to poor health and those that lead to good health. Our analysis found that employee self-efficacy, adaptability, and feelings of belonging at work were top predictors of good health, whereas toxic workplace behaviors, role ambiguity, and role conflict at work were top predictors of poor health.
Previously, researchers at the University of Oxford’s Wellbeing Research Centre analyzed data from more than 15 million employees on their well-being and the underlying workplace factors driving it.4 The researchers identified and tested 11 factors, including compensation, flexibility, purpose, inclusion, achievement, support, trust, belonging, management, and learning. The three top factors for the companies that scored best on well-being were feeling energized, belonging, and trust. Interestingly, they are different from the top drivers that employees think will make them happy and drive well-being at work: pay and flexibility.5
Together, all the research led us to identify six drivers of health that employers can most easily influence.
Employers can improve employee health through six modifiable drivers
Our analysis shows that employers can effect significant change through six modifiable drivers of health: social interaction, mindsets and beliefs, productive activity, stress, economic security, and sleep.6
Many employers are already investing in employee health and well-being, but we would encourage them to reflect on where they currently provide support and if they might want to change resources or add more interventions. For example, many employee assistance programs (EAPs) provide coverage of interventions for factors such as stress and economic security but less coverage of those for factors such as social interactions at work. Additionally, while EAPs are widely available, they tend to be underused by employees and focus on a reactive instead of a proactive approach to health.7
In rethinking a workplace strategy on employee health and well-being, current EAP offerings can be useful starting points for action but are unlikely to be the full solution. They are also unlikely, by themselves, to yield the ROI that employers increasingly expect. Strengthening the measurement of intervention outcomes may also help guide an organization’s overall investment strategy.
Improving global employee health can create trillions of dollars of economic value
It makes good business sense to invest in employee health and well-being. We estimate that the total global opportunity for optimizing employee health and well-being is $3.7 trillion to $11.7 trillion, which is equivalent to raising global GDP by 4 to 12 percent. Together, high- and middle-income economies represent 95 percent of this total opportunity (exhibit).
While it may not be feasible in the near term to bring all employees everywhere to optimal well-being, capturing just 10 percent of the total opportunity could yield up to $1.17 trillion of annual value and raise the global GDP by more than 1 percent (see sidebar “Business case methodology”).
In addition to contributing to increased productivity at work, our calculations indicate that investing in employee health and well-being provides a positive opportunity for attracting and retaining talent. As noted in McKinsey research, employees facing mental-health and well-being challenges are four times more likely than others to want to leave their organizations.8
Better health correlates with higher productivity across countries and workplace settings and is also strongly correlated with workforce participation at all ages.9 Every 1 to 3 percent increase in global workforce participation is worth a further $1.4 billion to $4.2 billion,10 benefiting employees, their health, the societies in which they live, and government finances.11
To capture these economic benefits fully, employers need to move from a sole focus of protecting against incidental risk and illness to helping employees achieve more optimal health. This is particularly important when considering that employees move along a continuum of health over time and may draw upon different workplace resources throughout their employment with a company. Ultimately, a focus on improving health could lead to a virtuous circle of positive change, as employees gain health literacy, and employers in turn respond to employee health concerns.
Acting now also reduces future brand and business risk. In Australia, a lawsuit resulted in a fine for an organization that tolerated a toxic workplace culture.12 Recently, the European Union adopted the European Sustainability Reporting Standards, requiring organizations by law to report on working conditions such as working time, social dialogue, and work–life balance. As employees develop higher standards for what is tolerable in the workplace, more pushback and litigation may be possible.
Furthermore, investors such as asset managers, private equity companies, and venture capitalists are increasingly weighing environmental, social, and governance (ESG) considerations in their investment decisions. They are guided by ESG ratings released by various agencies and standards issued by the International Sustainability Standards Board.
Improving employee health and well-being involves more than just employers
We have highlighted practical examples of how employers can play a role in changing norms and catalyzing innovation around employee health and well-being. However, employers alone can’t complete this task. Employees, policy makers, and local governments will need to help.
Employees can play a role in their own health by taking advantage of the workplace resources that do exist and helping cultivate a community and culture of healthy practices among colleagues. They can make their desires known to employers as a means of holding leaders accountable for responding to the health needs and aspirations of their workforces. These might include benefits such as paid parental leave and caregiving support, which aim to help employees balance work and family responsibilities while tending to their own overall health and well-being.
Policy and decision makers may want to consider a variety of ways to protect and promote employee health. Possibilities include mandating upper limits on total working hours, health coverage paid by employers, and employee access to therapy and other psychological resources.13 Enhancing standards and transparency could enable employees to make informed choices about their employment while also allowing policy makers to audit progress on a wider scale.
Through investment in public health (such as funding and grants), policy makers can encourage and enable employers to take employee health seriously and professionalize how they track the impact of their initiatives on employee health and well-being. Finally, policy and decision makers can lead by example in acting to promote their own employees’ health. This may be done in partnership with both private and other public sector employers, such as those that play a critical role in educating individuals about health—school systems, healthcare systems, and community programs—down to the city level.
City governments can play an important role in unlocking positive health outcomes. Given that most large employers are concentrated in cities, there’s a unique opportunity for companies and employees to come together to set broader aspirations on health and identify targeted interventions to pursue jointly.
Employment can and does have a profound impact on health, both positive and negative. Adapting how and where people work to support optimal employee health could result in billions of employees and their families around the world living longer, higher-quality lives—and simultaneously benefiting their employers and the societies in which they live.
