Thriving Workplaces How Employers can Improve Productivity and Change Lives 2025

Value drivers to develop investment case opportunity for investing in employee health and well-being FIGURE 9 Employee output ProductivityTalent management optimizationDirect healthcare cost savings1 ESG premium2Investment case for contractors and suppliers2 Notes: 1. Excluded from the calculation, given that costs vary widely country to country, and calculation is a sum of individual savings per employee, 2. Excluded from the calculation. Calculation is a sum of additional realized investment due to improved employee health and well-beingIncrease driver to improve total benefits created through good employee health and well-beingAbsenteeism Presenteeism Reduce driver to decrease total direct costs of poor employee health and well-beingRetention Healthcare cost savings associated with a healthy workforceThe positive goodwill that good employee health and well-being generates with investors, customers and partnersThe positive impact that good employee health and well-being generates with contractors and suppliersAttraction Unwanted attrition 1. Employee output: Employee output can be calculated as a combination of productivity, absenteeism and presenteeism. Example metrics for each include efficiency of completing tasks, innovation rates, sales increase and customer service sentiment (productivity), number of workdays lost to sickness (absenteeism) and lost time caused by physically present employees working at reduced levels (presenteeism). For example, offering free flu shots gives US employers a potential immediate result in lower absentee rates. A 2021 cost-benefit analysis of employer- funded influenza vaccinations found that employers could have saved €10 ($10.82) per vaccinated employee per year between 2011 and 2018.89 2. Talent management optimization: Developing a strong employee value proposition can enhance talent attraction and retention and minimize employee turnover. This not only enriches company culture but also boosts business performance, as employees with longer tenure have between 12% and 30% higher output than newer employees.90 Example metrics include average tenure (retention), days required from job posting to hire (attraction) and involuntary attrition (turnover). For example, industries which have a high number of workers in their first job who are likely to leave because of burn-out symptoms or exhaustion may focus on digital mental health applications or other solutions geared to develop immediate resilience and track involuntary attrition. In contrast, for employees who are likely to stay a long time, virtual employee assistance options or chronic disease management programmes may be more important. In either case, organizations may choose to measure ROI. Additional elements Organizations may also choose to build the following elements into their investment cases (where relevant): 3. Direct healthcare costs: These include what an employee pays when seeking healthcare, what the employer covers under any employer- sponsored insurance and any costs associated with work-related injuries. These costs are often major for organizations that have employees in economies with private healthcare systems. 4. ESG premium: An organization that highlights good employee health and well-being as part of its culture and value proposition may make itself more attractive to investors, customers and partners. 5. Investment case for contractors and suppliers: Some organizations may also choose to include the impact on contractors and suppliers within their investment cases. Employers can also consider how to expand Source: McKinsey Health Institute analysis Thriving Workplaces: How Employers can Improve Productivity and Change Lives 25