Thriving Workplaces How Employers can Improve Productivity and Change Lives 2025

The workplace needs to foster holistic employee health Companies of all sizes are entering a period in which it is essential to manage human capital with the same level of discipline as financial capital as part of their total business strategy. Globally, more than 3.5 billion people will each spend approximately 90,000 hours, or about 45 years, of their lives at work,6 representing a major opportunity for employers to nurture the good health of a substantial proportion of the world’s population. Improved health benefits individuals, their families and broader society, as well as the organizations for which they work. This briefing describes why investing in workforce health can boost organizational performance, enhance employee outcomes and offer a substantial return on investment. There is a clear investment case for improving employee health and well-being The world is changing – people are living and working longer, and their roles are evolving due to shifts in demography, advances in technology, globalization, and geopolitical and climate risks. For example, non-communicable diseases (NCDs), such as cardiometabolic diseases, cancers, substance use, and mental and neurological conditions account for 69% of today’s global disease burden. In the next 15 years, most of the disease categories predicted to rise will be NCDs, with age-related diseases such as kidney diseases increasing the most.7 Furthermore, the COVID-19 pandemic created a shift in working trends, launching many organizations into the world of remote work.8 It also accelerated and exacerbated long-standing corporate challenges to employee health and well-being, in particular employee mental health, with reports of burn-out rising to almost one in four.9 Many employers started to actively support and promote brain health – not only to address burn-out but also because analytical thinking, a key marker of positive brain health, is one of the most sought-after skills by employers.10 The evolution in lifespan, age-related diseases, what we work on and how we work will require people to be in better physical and mental health for longer and be more resilient and adaptable to change. The McKinsey Health Institute estimates that investing in holistic employee health could generate between $3.7 trillion and $11.7 trillion in global economic value.11 This equates to approximately $1,100 to $3,500 per person, or 17% to 55% of average annual pay. This estimate includes the impact of reduced attrition,12 absenteeism13 and presenteeism,14 as well as improved employee productivity,15 attraction and retention. The direct costs of medical treatments have been excluded because public, private and employer-sponsored insurance options vary by country. The biggest potential benefits come from enhancing productivity and reducing presenteeism, estimated to be worth $2 trillion to $9 trillion. This is between 54% and 77% of the total opportunity identified (Figure 1). Many organizations substantially underestimate these potential benefits. For example, companies may struggle to quantify the costs of presenteeism, in which employees are not working at their full potential, and instead focus their investment cases on reducing direct costs, such as attrition and absenteeism, which are more easily measurable. Yet attrition and absenteeism are estimated to account for only between one-eighth and one-quarter of the total opportunity. Estimated total opportunity value created by initiatives that improve specific aspects of employee health and well-beingFIGURE 1: ~$900 ~$300Low range High range Attrition Total direct costs of poor employee well-being Total benefits created through good well-beingAbsenteeism Presenteeism and productivity Retention Attraction~$600 ~$2,100 ~$400 ~$300~$600 ~$600 ~$300~$9,300 Note: All figures in $ billions Source: McKinsey Health Institute analysis Thriving Workplaces: How Employers can Improve Productivity and Change Lives 7