McKinsey Health Institute

Thriving workplaces: How employers can improve productivity and change lives

| Report

As the world grapples with rapid technological advancements, demographic shifts, and evolving work paradigms, it is vital to invest in employee health.

Why prioritize workforce health? Investing in employee health can substantially increase economic returns. Research by the McKinsey Health Institute in collaboration with the World Economic Forum indicates that enhanced employee health and well-being could generate up to $11.7 trillion in global economic value. Organizations that prioritize health often see marked improvements in productivity, reduced absenteeism, lower healthcare costs, and heightened employee engagement and retention. They are better placed to adapt to increased regulatory pressures on workplace health and safety standards and withstand greater focus from investors and the public on how organizations are meeting environmental, social, and governance (ESG) criteria. Moreover, a healthier workforce is a more resilient and adaptive workforce, more capable of navigating the uncertainties and challenges of a rapidly changing world.

What is the current state of workforce health? Work can and should enhance health, yet it is not doing so for a sizeable proportion of employees. In a McKinsey Health Institute survey of more than 30,000 employees worldwide, only 57 percent reported good holistic health (an integrated view of an individual’s mental, physical, spiritual, and social functioning),1 with important differences in holistic health and burnout symptoms found across different industries and demographics. For example, employees who are women, LGBTQI+, younger, or neurodivergent, or who report lower education levels or poor financial status, tended to report poorer employee health outcomes than their counterparts in the survey. This underscores the need for tailored interventions to address and prevent health challenges and tackle the workplace factors that contribute to them.

How can organizations address workforce health? Although there is no one-size-fits-all approach, given that each organization is different and employees have varying needs, there are six “evergreen,” evidence-based principles for employers seeking to make a positive impact: understand the baseline health status of employees and the value at stake, develop initiatives for a sustainable healthy workforce, pilot interventions to test and learn, track three to five metrics to measure success, ensure leadership commitment and sponsorship, and embed employee health into organizational culture.

These actions seem simple but are often hard to put into practice. Today, many organizations do not see or cannot measure the benefits of their current investments in employee health. They also don’t allocate resources in the most effective way—often, the issue is not how much is being invested but the type of investment being made. Rather than solely addressing the poor health of individual employees, developing a healthy workforce means taking a portfolio approach: addressing ill health and promoting good health, supporting individuals, and creating healthier teams, jobs, and organizational environments.

By making work a place that improves health, organizations can build a strong, productive, and engaged workforce and release greater individual and organizational potential. The choice to demand a healthy workplace is one every employee and investor can make.


There is an urgent need to improve employee health. Stakeholders who take immediate action will reap substantial benefits.

Health is “more than the absence of disease or infirmity,” as the World Health Organization (WHO) puts it. Modern concepts of health include mental, physical, spiritual, and social function.2 Today, more than 3.5 billion working adults each spend roughly 90,000 hours (or about 45 years)3 of their lives at work.4 This underscores the workplace’s potential to profoundly influence health—not just for the benefit of employees but also for their families and the communities in which they live.

Several trends are impossible to ignore: more people working than ever, an aging population living and working longer, and escalating levels of burnout.5Living longer in better health: Six shifts needed for healthy aging,” McKinsey Health Institute, November 11, 2022; Jacqueline Brassey, Brad Herbig, Barbara Jeffery, and Drew Ungerman, “Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute. November 2, 2023. The current state of the workforce, coupled with these trends, demands a rethink of employee health to avoid a potential crisis for health and business. A healthy workforce is not just a matter of corporate and societal responsibility; it is a strategic necessity and a substantial business opportunity.

The reality that leaders face is stark: failing to prioritize employee health risks creating a sicker, unhappier, and less productive workforce, burdened with higher healthcare costs and diminished productivity. The good news is that, conversely, the path to a healthier workforce can yield substantial returns for executives, investors, policy makers, and other stakeholders, including more robust organizations, vibrant communities, and, ultimately, a healthier society.

Guidance for developing a healthy workforce

This report is a call to action for leaders to recognize that the health and well-being of their employees is critical to the future success and sustainability of their organizations. While small actions taken today can build towards substantial impact tomorrow, many stakeholders are uncertain how to make the required changes in the most effective way.

This report is structured to guide stakeholders on this journey, with the aim of helping them feel empowered and enabled to act. The first chapter outlines the case for investing in a healthy workforce, while the second delves into the current state of employee health and well-being globally, looking at how health varies by industry and by demographic group. The final chapters focus on measurement and first steps, and are particularly geared towards executives, providing leaders with the tools and strategies necessary to implement effective health initiatives.

1: The case for investing in employee health

Investing in a healthy workforce delivers measurable performance gains and benefits for organizations and communities.

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,6Working nine to thrive,” McKinsey Health Institute, March 13, 2024. 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 percent 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“How to achieve great health for all? Start in your city,” McKinsey Health Institute, February 9, 2024. Furthermore, the COVID-19 pandemic created a shift in working trends, launching many organizations into the world of remote work.8The future of work after COVID‑19, McKinsey Global Institute, February 18, 2021. It also accelerated and exacerbated long-standing corporate challenges to employee health and well-being, in particular employee mental health, with reports of burnout rising to almost one in four.9Addressing employee burn-out: Are you solving the right problem?” McKinsey Health Institute, May 27, 2022.  Many employers started to actively support and promote brain health—not only to address burnout 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.11Working nine to thrive,” McKinsey Health Institute, March 13, 2024. This equates to approximately $1,100 to $3,500 per person, or 17 to 55 percent of average annual pay. This estimate includes the impact of reduced attrition,12 absenteeism,13 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 percent of the total opportunity identified (Exhibit 1). Many organizations substantially underestimate these potential benefits. For example, companies may struggle to quantify the costs of presenteeism, whereby 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 an eighth and a quarter of the total opportunity.

By investing in employee health, among the biggest benefits are reduced presenteeism and improved productivity.

All economies benefit from improving the health of workforces, but the distribution of value varies

The case for investing in employee health and well-being applies beyond high-income countries. Investment in employee health could boost global GDP by between 4 and 12 percent, with high- and middle-income countries each contributing roughly half of that total (2 to 5 percent) (Exhibit 2).16Working nine to thrive,” McKinsey Health Institute, March 13, 2024.

All economies can benefit by investing in healthy workforces.

However, average salaries are lower in middle-income countries, so analysis suggests these countries have up to four times as many employees who would benefit: an estimated 2.5 billion employees compared to 636 million employees in high-income countries.17Working nine to thrive,” McKinsey Health Institute, March 13, 2024.

The data on low-income countries was insufficient to reliably estimate the value at stake or the total number of employees potentially affected, but there is little doubt that employees in these economies would also benefit from workplace investment in health.

Within low- and middle-income countries (LMIC), non-communicable diseases (such as cancer, cardiovascular disease, and diabetes) meaningfully influence employee health, well-being, and productivity. Premature deaths due to non-communicable diseases account for 80 percent of deaths in LMICs.18 With limited financial security provided by the state and greater pressure on workers to maintain a stable income and afford healthcare, workplaces in LMICs have a significant opportunity to support good employee health.

Several factors directly contribute to the investment case for employee health and well-being within an individual organization

Benefits for an organization can vary widely depending on the number, sector, and location of their employees (Exhibit 3). Consequently, when organizations evaluate their investment cases, they need to calculate all the potential benefits, including costs that can be avoided.

Economic opportunities for specific companies are driven by their unique characteristics.

Major factors which organizations need to consider as part of their investment case include the following:

1. Direct healthcare costs: Healthier workforces correlate to lower healthcare costs and reduced absenteeism

Although not included in the calculation of the economic value at stake globally, healthcare claims often account for the majority of an organization’s total employee health and well-being costs in countries such as the United States where employee health claims are subsidized by employers. In the United States, employers face an estimated $226 billion annually in absenteeism costs (approximately $1,695 per employee), largely driven by chronic health conditions that could be mitigated through preventive care and health programs.19 Conditions such as hypertension, heart disease, and depression cause substantial on-the-job productivity losses, exceeding $300 per US employee annually.20 Cardiovascular disease leads to the loss of $156 billion in productivity annually.21 US employees with untreated insomnia cost employers approximately $2,280 more per year than those without insomnia because of factors such as absenteeism, presenteeism, diminished performance, and higher rates of accidents and injuries.22

A survey of more than 1,600 employer benefits decision makers in the United States (including C-level executives and human resources/benefits leaders) revealed that employers are preparing for medical inflation, with more than two-thirds budgeting for healthcare costs to grow at three times the rate of inflation.23Reimagining US employer health benefits with innovative plan designs,” McKinsey, October 15, 2024.

Globally, total healthcare costs are expected to continue growing because of cost pressures such as those related to an aging population.24 In countries with universal healthcare, organizations currently avoid most of the direct costs of poor health, but this could change with increasing pressure on healthcare budgets and the tightening of fiscal wallets. For these countries, the goal will likely be to maintain quality and accessibility across health systems while controlling costs. Consequently, companies may be asked to pay for their employees’ healthcare, especially if the workplace is found to be a cause of ill health. For example, Japan introduced the Stress Check Program in 2015 to tackle an increasing number of work-related mental health disorders. The program requires workplaces with more than 50 employees to offer an annual stress survey and to facilitate consultations with a physician for those with high stress levels.25

Many people with mental illness can continue working without relapse with appropriate support for their resilience. They can live their lives, support family, disperse stigma among colleagues, and contribute to [their] corporation and society. Society needs to realize that people with mental illness are an asset and not a cost.

Tsuyoshi Akiyama, president, World Federation of Mental Health

More recently, the Chilean government introduced a mandatory evaluation of workplace environments and mental health in 2024 to promote the accountability of employers for their employees’ health. The Chilean Safety Association has taken a leadership role in this policy change by developing preventive medicine, launching affordable mental health for communities, and convening local organizations and leaders to collaborate on mental health (including the development of an annual Mental Health Thermometer).

At ACHS, we are committed to making Chile the country that best cares for its workers and their families. A critical part of this is addressing the mental health challenges that our country faces. We are deploying diverse mental health initiatives to care for the three million workers that we cover. In addition, we have extended access to mental healthcare for individuals in the communities that we serve. We hope that in doing so, we can create healthier communities with healthier families and, ultimately, healthier workers, improving companies’ climate and productivity.

Juan Luis Moreno, CEO, Chilean Safety Association (ACHS)

Supporting employee health does not need to rest on employers alone and can be a joint public and private effort. There is no need for employers to reinvent the wheel: they can benefit from the expertise, infrastructure, and goals of public health stakeholders through partnerships, especially as these stakeholders may offer referral pathways. For example, employers may consider partnering with a private, non-profit, or public healthcare provider to offer on-site employee health clinics with a focus on preventive care. This could include cardiovascular, diabetes, cervical cancer, or mental health screenings that give employees easier access to care without taking paid time off. Employers can also consider one-off events, such as a day of optional flu or COVID-19 shots, eye examinations, or specialist training to prevent back injuries.

2. Productivity and presenteeism: There is growing evidence of a potential causal link between employee well-being and increased productivity and reduced presenteeism

While the global investment case for improved productivity and reduced presenteeism offers clear value, calculating the gain or ROI for a specific program within an individual organization can be more complex. The literature demonstrates, however, a correlation between employee well-being interventions and productivity improvements of between 10 and 21 percent.26 Research by the University of Warwick found that happier employees are more productive,27 while a recent University of Oxford study found that happier employees in a call center were 13 percent more productive.28 More high-quality research on the causal links is needed, but these early insights are promising.

3. Talent management: A focus on health can improve employee attraction and retention

Investing in employee health and well-being can boost employee retention. Mercer research shows that companies which foster a “culture of health” experience employee turnover rates 11 percentage points lower than those that do not.29

Moreover, investing in employee health and well-being is increasingly important for attracting talent. Research from Saïd Business School finds that for many employees, factors contributing to their well-being—such as mental and physical health, work-life balance, and job satisfaction—are as crucial as traditional incentives such as salary.30 This is especially important for younger generations31 in the workforce, born between 1996 and 2010 (also referred to as Generation Z).32 A McKinsey Health Institute survey of more than 42,000 respondents found that at least a third consider physical, mental, social, and spiritual health resources when choosing an employer, with Gen Z respondents and those with lower mental health scores giving particular consideration to mental health benefits.33Gen Z mental health: The impact of tech and social media,” McKinsey Health Institute, April 28, 2023.

Employers may also wish to consider how to promote the health of older employees. Increases in life expectancy and advances in healthcare will extend working lives: by 2050, about 30 percent of the global workforce will be over 50 years old.34 Governments may raise the retirement age or rethink pension structures in response. Consequently, both public and private sector organizations should expect an increasingly multigenerational workforce and tailor their health and well-being programs accordingly.

Employers’ actions are ever more visible to stakeholders. Platforms such as Glassdoor, Indeed, Fishbowl, and Reddit offer employee insights into how organizations treat employees and support their well-being, potentially influencing the decisions of recruits, customers, and investors. Data from these platforms can be harvested to find out how employees may feel and why they quit. For example, a recent MIT study identified toxic culture at the top of a workplace as a meaningful factor in employee resignations.35

Additional factors which employers may choose to include in the investment case for employee health and well-being:

4. Performance: A healthier, happier, and more engaged workforce boosts company performance and resilience

Research from the University of Oxford shows a direct correlation between employee well-being and an organization’s financial success. Companies with higher well-being scores consistently achieve greater valuations, higher profits, and superior returns on assets. For example, a one-point increase in employee happiness scores was shown to be associated with a $1.39 billion to $2.29 billion increase in annual profits.36 A hypothetical “Wellbeing 100” stock portfolio, based on data from Indeed, comprising the top 100 companies in employee well-being, has significantly outperformed major stock market indexes since the start of 2021, demonstrating that high well-being scores are linked to stock performance (Exhibit 4).37

Workplaces with the highest well-being scores tend to outperform other stock market indexes.

Moreover, today’s workforce needs to adjust to new roles and technologies in a shifting job landscape. The rapid pace of technological change can be overwhelming. It can contribute to job insecurity and require employees to continuously upskill and adapt by, for example, focusing more on creativity, problem-solving, cognitive flexibility, and emotional intelligence. The rise of remote working has blurred the lines between personal and professional life, creating a workplace culture that can enhance or harm employees’ well-being and productivity. A healthier workforce is a more resilient and adaptive workforce, better capable of navigating the uncertainties and challenges of a rapidly changing world.

5. ESG: Investors are increasingly seeing employee health and well-being as an important component of the ‘S’

Some employers may assess the impact on suppliers and partners when deciding how to invest in employee health and well-being. Prioritizing holistic health is not a task to be undertaken alone, not least because long-term health investment benefits business, the workforce, and society. Healthy individuals are more likely to contribute actively to their local communities—volunteering at the food bank, running for city council, coaching their child’s sports team, or shoveling a neighbor’s driveway.38

ESG criteria are becoming important aspects of delivering business value. They help to enhance revenue growth, reduce risks, minimize regulatory intervention, and increase loyalty and productivity among employees. According to a 2020 McKinsey global survey, a majority of executives and investment professionals believe ESG programs deliver greater shareholder value and would pay a premium to acquire companies with a strong ESG track record.39The ESG premium: New perspectives on value and performance,” McKinsey, February 12, 2020.

To date, environmental and corporate governance issues have dominated the ESG agenda, but the social pillar—which guides how companies manage relationships with customers, suppliers, communities, and employees—is gaining consideration. Investors are increasingly paying attention to how companies manage employee health and well-being, recognizing their criticality to long-term organizational success. Also, there is growing scrutiny on labor practices, employee satisfaction, support for employees’ mental health, and thinking around workforce stability. Companies listed on benchmarks such as the S&P 500 index are now assessed not only on financial metrics but also on employee factors, such as job satisfaction, happiness, stress, and purpose at work.40 Similarly, stock exchanges, including the Hong Kong Stock Exchange, are developing ESG reporting guidelines that mandate disclosures on employee health and well-being metrics, such as working hours, rest periods, and equal opportunities.41

6. Regulation and compliance: Regulatory environments may become more stringent, forcing employers to act

Around the world, governing bodies increasingly recognize the importance of employee health and well-being, and regulatory pressures are mounting. For example, the European Union has introduced stricter standards for workplace well-being, such as the European Framework Directive on Safety and Health at Work, the Strategic Framework on Health and Safety at Work 2021–2027, the Work-Life Balance Directive and the European Framework Agreement on Telework. EU regulations state that risk management within the workplace should encompass stress, thereby requiring psychological risk assessments and appropriate prevention methods.42 In the United States, the Occupational Safety and Health Administration (OSHA) increased penalties for workplace health and safety violations to $15,624 per violation in 2023, with non-compliance leading to hefty fines, lawsuits, and reputational damage.

Adherence to these regulations reduces compliance risks and enhances a company’s reputation as a socially responsible entity. There is increasing expectation from consumers, employees, and communities that organizations should be transparent about labor practices, diversity and inclusion, mental health support, and work-life balance. Companies that fail to meet these expectations risk losing their reputation and trust among employees and customers alike.

The time to act is now

By prioritizing employee and health well-being, employers can unlock substantial performance gains, achieve a healthier, more adaptable and more resilient workforce, and drive positive change in their organizations and communities. Employers should not wait. Decisive action taken today can secure a healthier, more productive future.

Well-being is the ultimate productivity multiplier. And when companies invest in their people’s well-being, it’s a win-win—creating workplace cultures where individuals can maximize their productivity and creativity, which in turn enables businesses to grow and maximize their impact.

Arianna Huffington, author of “Thrive” and “The Sleep Revolution”

2: Current status of healthy workforces

No industry or demographic group is immune to employee burnout, exhaustion or poor health—though some are more affected than others.

With more than half of the working population reporting suboptimal employee health, change is imperative. Today’s workers face unprecedented challenges across sectors and geographies. Contemporary threats to health include a rise in mental health disorders and obesity; unmet needs from conditions such as diabetes, cancers, brain health disorders, and cardiovascular conditions; and concerns about how climate change will affect food security, infectious diseases, and access to healthcare.43Adding years to life and life to years, McKinsey Health Institute, March 29, 2022; “Health-related climate adaptation: How to innovate and scale global action for local needs,” McKinsey Health Institute, August 20, 2024; Reiner Rugulies et al., “Work-related causes of mental health conditions and interventions for their improvement in workplaces,” The Lancet, October 2023, Volume 402, Number 10410.

A 2023 McKinsey Health Institute survey of more than 30,000 employees across 30 countries44 found that 57 percent of employees globally reported good holistic health45 (physical, social, spiritual, and mental health),46 while a fifth of people reported burnout symptoms.47 Only 49 percent of employees were “faring well”48Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2023.—meaning they had positive scores on holistic health and no symptoms of burnout.49 There are multiple drivers of negative and positive health, but it is clear that the current state of health in workplaces is associated with the choices that employers and societies make. It is within the power of executives to build both healthier workforces and healthier societies. Change is necessary and achievable, with many ways to improve health within employers’ control.

All industries need to improve workforce health—but some industries have surprising results

Based on the 2023 McKinsey Health Institute survey, this report reveals, for the first time, the state of holistic health across more than 35 industries (Exhibit 5).50 Encouragingly, in only 10 percent of the industries surveyed did more than a third of employees report burnout symptoms. In two-thirds of the industries, however, more than 20 percent of employees said they were burned out, while in no industry did more than 75 percent of employees say they were healthy overall.51Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2023.

Employees in all industries face burnout, although some are faring better than others overall.

Employees reported higher rates of burnout symptoms and lower rates of holistic health in five industries (reported on their percentage of faring well): accounting, retail, agriculture/forestry/fishing/livestock, shipping/distribution, and arts/media/entertainment/recreation.52 Conversely, industries reporting good holistic health and low burnout symptoms (reported on their percentage of faring well) included human resources, construction, administrative and support services, education, and engineering/architecture. These results reflect a global snapshot of a specific point in time and should be interpreted as a potential opportunity for improvement (see sidebar, “What was measured”). They do not mean every farmer or artist struggles with health, and neither do they negate any of the hardships a carpenter or human resources executive faces. Instead, this research offers new data points for employers seeking ways to improve employee health.

The data analysis did not reveal clear global trends explaining why certain industries outperform others.53 Nor did any single aspect of health drag down the average of low-performing industries, such as may be expected of jobs that are physically or emotionally demanding. Instead, scores were generally low or high for all four dimensions of health.

The data also returned some examples that run counter to global trends. For example, while the health of front-line workers is generally worse than that of managers, people working in construction report high holistic health.54 In education and administrative support services, employees report low burnout symptoms with high job security, possibly offsetting higher financial instability.

The absence of consistent patterns across industries suggests that for both highly and poorly performing sectors, the drivers of workplace health are multifaceted and not easily attributable to specific roles.

Minority demographic groups form the majority and are scoring worse on overall employee health

A much clearer story emerges from an analysis of demographic data, such as gender, sexual orientation, neurodivergence, age, education, and income. Responses were not assessed for ethnic diversity because of restrictions in certain countries.55 This report reflects survey responses only; further contextual research is required to understand the underlying causes.56

Respondents who self-identified as women, LGBTQI+,57 lacking a high school diploma,58 neurodivergent,59 or low-income60 reported lower holistic health and higher burnout symptoms compared to other respondents. Notably, these groups make up most of the sample, not the minority.61 Only 20 percent of the employees surveyed did not identify with at least one of these groups—groups that are often underrepresented on executive leadership teams. This report can only report outcomes; more research is needed to understand the reasons behind those outcomes.

Specific demographic findings include the following (Exhibit 6):

Exhibit 6
Men and women report similar overall employee health, although women show more symptoms of exhaustion.
Members of the LGBTQI+ community report clear differences in overall employee health, compared with the global average.
Neurodivergent employees report clear differences in overall employee health.
The youngest and oldest working generation report clear differences in overall employee health.

In the research model analyzed71Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2, 2023. for both those aged 61 and over and the youngest working generation, the top two predictors for holistic health are self-efficacy and meaning.72 Drivers of burnout differ slightly: in this research, role ambiguity affects older workers most strongly, while a toxic workplace environment affects younger employees and the overall global cohort most strongly (Exhibit 7).

The top two drivers of holistic health and burnout symptoms for the youngest generation, oldest generation, and global average show variations.

These disparities highlight the importance of understanding differences across age groups to support longevity in the workplace, because older employees bring valuable experience, stability, and institutional knowledge. Employers play a crucial role in helping employees adapt to longer lifespans by fostering age-diverse workplaces and developing products that meet the needs of younger and older employees. Research suggests that innovative workforce planning, including retaining older employees and making the most of their experience, can enhance organizational performance, while creating age-friendly jobs can help maintain a talented and diverse workforce.73The ‘evergreen economy’: Harnessing the power of healthy longevity,” McKinsey Health Institute, July 3, 2024.

Educational level: College or graduate-level education correlates with reported higher holistic health and reported lower burnout symptoms. Individuals without a high school diploma were 20 percentage points less likely to report good holistic health compared to those with graduate degrees (50 percent versus 70 percent). Research underscores the critical role of continuous learning and development in promoting overall well-being. Learning, development, adaptability, and self-efficacy are core predictors of holistic employee health and vice versa in the underlying research model.74Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2, 2023.

Financial situation: The survey assessed employees’ financial situations based on financial status,75 financial stability,76 and remuneration.77 Only 41 percent of individuals with poor financial status reported good holistic health,78 compared to 76 percent of those with good financial status. Those reporting low financial stability reported 27 percentage points lower holistic health (47 percent versus 74 percent for financially stable) and more than 30 percentage points more burnout symptoms (38 percent versus 5 percent for financially stable). Remuneration is positively correlated with holistic health. People reporting positively on remuneration were 30 percentage points more likely to report higher holistic health than those reporting less positively on remuneration (70 percent versus 40 percent for lower scores on remuneration), and they also reported fewer symptoms of burnout.79Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2, 2023.

Job insecurity: 45 percent of respondents with high job insecurity80 reported burnout symptoms compared to the global average of 22 percent. Research shows job insecurity leads to adverse effects in mental health (depression, anxiety, burnout) and physical health (back pain, headaches, high blood pressure).81

Job type: Being a member of upper management82 seems to be both a blessing and a curse: 80 percent of these individuals reported good holistic health, but 24 percent reported burnout symptoms, which is higher than the global average of 22 percent. Front-line workers also reported higher burnout rates (26 percent), driven by exhaustion. The top three factors associated with positive holistic health for managers in this study are self-efficacy, meaning, and belonging. For non-managers, the top three are self-efficacy, adaptability, and belonging.83

Caregiving can boost holistic health but is associated with more burnout symptoms

More people are working while raising children, and more workers are taking care of adults who require care. Globally, the survey found that 10 percent of employees care for someone with a mental or physical illness in addition to their paid jobs. As the number of caregivers in the workforce grows, their role in organizations becomes increasingly important. Employers can benefit by understanding how caring for others affects overall holistic health and burnout.

Caregivers were more likely to report higher holistic health (61 percent versus the global average of 57 percent), driven by experiencing better social and spiritual health (Exhibit 8). However, caregivers were also 17 percentage points more likely to report higher burnout symptoms (37 percent versus 20 percent for non-caregivers), primarily driven by exhaustion.

The 10 percent of caregiver respondents reported higher holistic health levels and higher levels of burnout.

Exhibit 9
Overall, caregivers report holistic health scores at higher levels than the global average.
Respondents who were taking care of an adult reported higher rates of burnout than those taking care of children.

The opportunity is maximized by helping all employees across diverse demographics achieve good health

There is no one-size-fits-all solution; leaders must recognize and address the varying needs of different groups. By doing so, they can develop targeted interventions that enhance holistic health and reduce burnout. This approach may involve greater autonomy and empowerment for teams and individuals to manage their work and resources effectively.

Employers and employees need to work in partnership to improve health, as neither can realize the full benefits on their own. Employers who are not helping every member of their workforce achieve their full potential risk affecting the health and well-being of their employees, limiting their societal and economic contributions, and missing substantial value creation for their organization.

3a: Measuring the impact of investing

The return on investment in employee health can be measured with tailored metrics that go beyond traditional sickness absence, safety, and injury statistics.

Taking action: How executives can build the investment case for a healthy workforce

Many organizations offer multiple employee health and well-being programs, but the organizational value and ROI of these programs are often overlooked. Executives regularly struggle to answer the question, “Is our investment in employee health driving sustainable improvements in performance?”

This briefing provides frameworks and approaches to help organizations develop investment cases, strategies, and tailored action plans for successful health and well-being programs and highlights opportunities to use data and analytics.

No single KPI can measure the impact of employee health and well-being investment

Every industry or organization has its own unique characteristics, meaning there is no single KPI for measuring success. Metrics should be tailored to each organization’s specific needs. However, a tried-and-tested approach based on the principles described in Briefing 3B should work for most organizations, whatever their context.

1. Understand the status of employees’ health and well-being and the value at stake

Conducting comprehensive health and well-being surveys can diagnose workforce health needs

An S&P Global Corporate Sustainability Assessment shows that only 2.2 percent of assessed companies conduct employee surveys with a core focus on health and well-being.85 Smaller organizations can overcome potential funding barriers through free tools and training available from not-for-profit providers.

Ideally, employers measure aspects of direct health as experienced by employees (mental, physical, social and spiritual health, and burnout symptoms), their associated work experience outcomes (for example, engagement and satisfaction), and core work experiences (such as job demands and resources).86Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2, 2023. These measurements identify both immediate outcomes and root causes. Employers can assess employee health using quick pulse checks,87 health assessments, automated text analyses of comments within annual people surveys, focus groups, or anonymized voluntary health data.

Calculate the investment case opportunity for the organization

Good-quality, evidence-based data on employee health and well-being should be combined with an investment case to guide the development of strategic health interventions (see Briefing 3B). Organizations can build an investment case for employee health and well-being by focusing on the value drivers identified in Briefing 1. Those sources of value for the global economy have been adapted into four drivers which can be used by any organization to calculate their investment case opportunity: employee output, talent management optimization, healthcare cost savings, and ability to attract investment (Exhibit 10).

Different KPIs can build upon each other to create the total employee health vision.
  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 can give 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 2018.88
  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 percent and 30 percent higher output than newer employees.89  Example metrics include average tenure (retention), days required from job posting to hire (attraction), and involuntary attrition (turnover). For example, industries that have a high number of workers in their first job, who are likely to leave because of burnout 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 programs may be more important. In either case, organizations may choose to measure ROI.

Additional elements

Major factors which organizations need to consider as part of their investment case include the following:

  1. 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.
  2. 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.
  3. 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 interventions in ways that benefit employees both within their organizations and within the broader local community. For example, executives in organizations with a global presence may consider how to invest in widescale health education outreach. One example is Bayer’s support for smallholder farmers, who represent 11 percent of their Crop Science’s divisional sales. The company is introducing access to health and nutrition education for members of their value chain (including farmers) in India, Indonesia, and Mexico. This initiative aims to improve health outcomes and productivity by directly supporting farmers and their associated communities.

Overall, to build the investment case effectively, estimates need to assess the value of making the investment (costs avoided and benefits gained) versus the cost of the intervention required to address the issue.

Exhibit 11 provides sample metrics that can be used to gather data on each of the drivers of employee output and talent management optimization, as these two elements are at the core of any business case.

Workforces can consider which areas to focus on and then develop KPIs.

Case study: Novo Nordisk provides support and targeted interventions to teams reporting high stress levels

Healthcare company Novo Nordisk regularly deploys a global survey to measure employee stress levels and mental health using validated screening questions. About 14 percent of the company’s 64,000 employees reported symptoms of stress in the 2023 survey. Managers of highly stressed teams receive support from organizational psychologists and are trained to use well-being tools effectively, adhering to the IGLO (individual, group, leaders, and organization) model.90 Stronger support interventions generally demonstrate a 20 to 30 percent decline in the number of employees reporting symptoms of stress one to two years after the intervention. Novo is now implementing a similar survey focusing on physical health, particularly pain.

Case study: On achieved 11.6x ROI annually ($2.9 million) through employee health intervention

Sportswear company On implemented an employee health intervention, via Kyan Health, to over 2,500 employees within the organization. The intervention gave employees access to a self-care library (including mediation, relaxation, and breathing practices), 12 coaching sessions, and internal well-being workshops. Since its launch in 2022, 1,240 employees have created accounts, representing approximately a 50 percent uptake. The intervention has gained the company $2.9 million annually (11.6xROI). This consists of $1.3 million in productivity gains due to a 5 percent improvement in presenteeism-related productivity loss, $1.1 million driven by a 30 percent reduction in voluntary attrition, and a $0.5 million reduction in HR costs to manage mental health cases globally.

2. Develop initiatives for a sustainable healthy workforce

Executives may consider how to use the baseline and investment case created using the above principle to develop a targeted intervention strategy aligned with the overall organizational strategy. When developing an initiative portfolio, organizations should consider their current initiatives to understand how much is currently spent on employee health and well-being, how effective they are, and where there is room for growth. The initiatives can be focused on direct employees or include suppliers and the wider communities from which the workforce is drawn.

Case study: Swiss Re’s metabolic health program targeted interventions based on an onboarding survey

Reinsurance provider Swiss Re partnered with Combe Grove (a metabolic health center) and Gro Health (a digital well-being platform) to deliver a pilot program focused on optimizing the metabolic health of its 1,100 UK employees. The intervention began with a survey on risk factors for metabolic ill health—the primary cause of many chronic diseases which today contribute to the majority of global ill health and deaths (including heart disease, diabetes, certain cancers, musculoskeletal diseases, and mental ill health). It asked employees about their motivations to participate. More than 220 employees participated in the survey, and many more have since accessed the diverse resource offerings, including a digital well-being platform focusing on nutrition, sleep, exercise, and mental well-being. Forty individuals (identified from the risk factor survey) participated in one-on-one health planning sessions and a further five completed a seven-day residential program with virtual follow-up support for 12 months.

With full pilot outcomes expected in May 2025, interim results indicate that the program is very relevant (59 percent of surveyed employees showed some degree of metabolic ill health and were highly motivated to improve this), and that the intervention is effective. High-risk participants achieved an average of 6 percent body weight loss, 20 percent improvement in blood fat profile, and 50 percent improvement in well-being, sleep, and diet quality. As well as these clinical improvements, wider program rollout post-pilot will aim to demonstrate on a broader scale the day-to-day impact many colleagues have noted: “My energy has increased;” “I’m sleeping better;” “I’m more focused at work.”

Case study: Novartis Foundation funded cardiovascular health interventions in Senegal

The Novartis Foundation funded the Better Hearts Better Cities initiative, which was designed to improve cardiovascular health in Dakar, Senegal. The program provided education about healthy lifestyles, including information about blood pressure, diet, physical activity, stress, and tobacco use and was delivered in collaboration with 18 companies, reaching 36,000 employees. Outcomes included hypertension screening of 21,000 employees and improved blood pressure for 34 to 39 percent of employees in six months.

3. Use pilots to test the effectiveness of an intervention

Pilots help organizations test interventions on a small scale before full implementation, helping to justify investments and refine interventions. They can compare intervention and non-intervention groups or assess pre- and post-intervention outcomes within specific employee subgroups or locations. Metrics such as adoption rate, direct impact on employee health and well-being (for example, anonymous and voluntary data on health scores), distress levels and burnout symptoms, cost analysis, and ROI can all be used to measure success. Investment returns can be measured by comparing the cost of the intervention with outcomes. Some companies also look at cultural ROI, such as improvements in employee sentiment or scores from experience surveys.

Case study: ASICS piloted a Movement for Mind intervention

To address the potential inactivity of desk-bound employees, often caused by insufficient time, facilities, or motivation to be active, sportswear company ASICS developed the Movement for Mind initiative. The program is an audio series with movement instructions for all fitness levels, aimed at improving mental health through a range of techniques. Participants listened to two 30-minute sessions per week for eight weeks. Initially piloted with 189 people (including but not limited to ASICS staff), the program showed clinically significant improvements in mental well-being (Warwick-Edinburgh Mental Well-being scale and WHO-5), low mood (PHQ-2 scale), and anxiety (GAD-2 scale). Of those taking part in the pilot, 71 percent said they felt happier and 70 percent reported being more active after completing the program. Following this successful pilot, the initiative recruited nearly 3,000 additional participants worldwide over an 18-month period.91

4. Monitor employee health and well-being improvements over time

Regular, ongoing monitoring helps ensure that interventions are effective, identifies areas for adjustment, and helps organizations track progress and assess the impact of employee health and well-being programs. Depending on their starting point, organizations can tailor their approach. Those starting on this journey can begin with a few data points and refine measurement over time, while advanced organizations may be able to use advanced analytics and modeling, depending on their resource levels.

Case study: Wellhub shows that interventions become self-reinforcing when adoption rates are more than 20 to 25 percent

Wellhub, a wellness platform, connects clients’ employees to physical, mental, and nutritional interventions, such as local gyms and meditation apps. Tracking more than 15,000 employees over time, Wellhub found an average adoption rate of 15 to 25 percent, but clients in the top quartile achieved a 40 to 70 percent adoption rate and an average year-on-year adoption rate growth of approximately 42 percent. Wellhub’s study suggests that fostering a healthy workforce culture could increase the adoption of employee health and well-being interventions by up to 12 times compared to simply offering the intervention. The platform finds that interventions surpassing an adoption rate of 20 to 25 percent tend to be self-reinforcing. One possible explanation is that when at least one in five employees participate, a microsociety of participants forms, which starts changing the organization to become healthier. Practically, this means colleagues influence each other, share recommendations on helpful interventions, or invite each other to attend workout classes together—all of which help foster a thriving, healthy workforce culture.

Case study: Audi introduces Checkup program, reaching 10,000 employees

Audi, a German automotive manufacturer, began its Audi Checkup program in 2006 to enable employees to identify their health risks and help prevent chronic illnesses. More than 90 percent of employees opt in to the voluntary examination and preventive program. The 75-minute check-up includes blood tests, an electrocardiogram, biometry, tissue analysis, a lung test, an eye test, a hearing test, and the SF-12® Health Survey. Since 2006, more than 10,000 employees have taken part.92

People and organization analytics are an important enabler of successful employee health and well-being strategies

Integrating employee health and well-being into core organizational strategies is crucial. Robust information management and people and organization analytics approaches help achieve this. Organizations often track financial and supply chain metrics, but many overlook comprehensive health and well-being data. However, rapid advancements in data infrastructure, analytics, and AI are helping to bridge this gap. A recent McKinsey global survey of more than 1,200 respondents found that 12 percent are regularly using generative AI in HR and seeing meaningful cost reductions.93The state of AI in early 2024: Gen AI adoption spikes and starts to generate value,” QuantumBlack AI by McKinsey, May 30, 2024. “Big data” can be collected and, provided it is of good quality and appropriate privacy standards are in place, can be used for predictive analysis. This could help guide decision making on effective interventions by providing a view of upstream drivers, real-time indicators, and key enablers to improve employee health and well-being.94 As data analytics evolve, now is the time to incorporate health metrics into organizational measurements.

Beyond analytics, high-quality AI-enabled systems can enhance employees’ understanding of health benefits, streamline onboarding and scheduling, and increase flexibility. They can even assist leaders in improving workplace interactions and provide real-time feedback to employees. Participation could be boosted by allowing employees to track their health status through innovative tools such as opt-in wearables. This not only promotes well-being but also fosters a culture of health within the organization.

Case study: Experian reduces global attrition, saving $14 million over two years, by using predictive workforce analytics

Experian, a data analytics and consumer credit reporting company, faced resignation rates 4 percent above the industry benchmark, creating a strain on growth and innovation. Initially, Experian looked to tackle this by focusing on recruitment and simply managing the high resignation rates, resulting in decreased attention to workplace initiatives for the existing workforce.

Subsequently, Experian turned to data analytics. By using HR data and in-house analytics capabilities, the company developed a solution that equipped global HR teams with advanced insights into employee needs and motivation, enabling tailored approaches to support employee health and well-being. The platform analyzes up to 200 employee attributes (including core HR and people data) to create a comprehensive assessment of the risk that employees will leave. HR teams can now make informed decisions on the most effective support for employees, reducing global attrition by 4 percent and saving Experian $14 million over two years.95

Lack of data is not a constraint to acting

Lack of data should not be an excuse for inaction by executives. Organizations can tailor metrics to meet their unique needs much like individuals tackle improving their own health. They may start by measuring how much physical activity they do in a week, how many hours they spend on social media, or how much water they consume in a day. Any journey to improvement must start with a baseline. Executives have an exciting opportunity to leverage health metrics to improve sustainable performance, enhance employee well-being, and foster a thriving organizational culture.

3b: Developing an action plan

A portfolio of investments that address poor health and promote good health can unlock full workforce potential.

By taking decisive steps towards building a healthy workforce, organizations will not only benefit employees but also enhance performance. Executives often view employee health and well-being programs as a cost rather than a strategic opportunity with a positive ROI. This report aims to change that. But many executives would not know where to begin even if they were convinced of the need for change.

Where to start? Six principles to address employee health

Each organization has unique needs and opportunities to address employee health and well-being, based on size, organizational set-up, geographic spread, and level of resources. Here we suggest six simple principles each organization could follow to create a successful employee health and well-being intervention portfolio.

  1. Understand the baseline and value at stake: As described in Briefing 3A, start by assessing the baseline health status of employees through surveys. Alongside the baseline, it is important for each organization to understand the potential value of revising a workforce strategy and the risks associated with doing nothing.
  2. Develop initiatives for a sustainable healthy workforce: One-off efforts will not build a healthy workforce. Achieving sustainable results requires a long-term, systemic approach with high-quality, evidence-based interventions.96 This should be complemented by a clear vision of what the organization is attempting to solve, leading to a targeted approach to improving health, in alignment with the overall organizational strategy. Short-term projects may yield immediate benefits, but real change comes from a complete plan that includes clear leadership behaviors and effective tools. The updated strategy can then build on current efforts, such as programs focused on diversity and inclusion and psychological well-being. This strategy should be sponsored by the board and empower lower-level teams to drive autonomous, aligned interventions.
  3. Pilot interventions to test and learn: Deploy, test, and learn. Set up pilot programs to try out and refine strategies. This allows for targeted testing, continuous improvement, learning from failures, and ensuring that only the most effective interventions are scaled. Begin with small, manageable programs addressing immediate needs to start building momentum and create longer-term impact. Interventions do not need to be complicated—simple actions, such as encouraging employees to take “movement breaks” during work or training managers to discuss mental health with their teams, can be highly effective. Shift away from offering reactive interventions at an individual level in favor of implementing more proactive interventions, especially those aimed at teams.
  4. Track three to five metrics to measure success: Start with three to five KPIs that drive workforce health and organizational performance, ideally ones already tracked or easy to implement.97 Refine these KPIs for optimal insights. Assess broader effects by updating the investment case and resurveying employee health. Use these insights to steer the strategy—whether that means stopping, redirecting, or scaling interventions. Systematic measurement validates the investment in a healthy workforce.
  5. Ensure leadership commitment and sponsorship: Real change starts in the boardroom with executives making employee health and well-being a strategic priority. Executives need to set the vision, hold themselves accountable, and integrate health and well-being into the core organizational strategy. They should also nominate an executive-team sponsor and a board sponsor as a signal of leadership commitment. The sponsor does not need to be the chief HR, people, or medical officer; it can be very powerful if another executive takes the sponsor role. Executives will need to be transparent in their communication and authentic in how they role model. They also need to participate in health initiatives to create a supportive environment where employees feel encouraged to engage and be open about their health challenges.
  6. Embed employee health into organizational culture: Creating a sustainable and healthy workforce is a long-term journey requiring a systemic shift in organizational mindset and culture. Employee health must be integral to everyday work life and embedded in daily practices, management analytics, leadership behaviors, the deployment of digital tools, policies, and values. This cultural shift demands continuous engagement, regular evaluation, and flexible interventions to meet needs as they evolve. This approach will help break down some barriers, such as privacy concerns from employees or stigma about mental health. Fostering a culture of health and well-being is not just about immediate outcomes; it is about building resilience and long-term sustainability in the organization.

As the executive sponsor of the well-being agenda at Standard Chartered, I believe that well-being at work is at the core of employee engagement and productivity. We want our people to feel able to bring their best selves to work and deliver sustainable high performance. I am passionate about using my role to help create a positive and healthy work environment. This means listening to colleagues about their needs and supporting them to build well-being-related skills such as resilience and adaptability, empathy, and personal energy management. Having an executive sponsor outside of the traditional HR setting demonstrates that well-being is for everyone and it’s a shared responsibility.

Diego De Giorgi, Group Chief Financial Officer, Standard Chartered

Case study: Ikea Canada implements Wellness Days, reducing turnover from 35.0 to 24.5 percent

Furniture and home-goods company Ikea Canada found through its 2019 annual employee engagement survey that employees flagged up family obligations, personal illness, and stress, and they wanted a healthier lifestyle. In 2020, the company introduced Wellness Days, allowing employees to take 12 days off per year for personal illness or injury, supporting a family member with an illness or injury, taking care of a personal emergency, participating in a community event, volunteering at a not-for-profit organization, self-care, inclement weather, or spending time with loved ones or a new pet. In response to the COVID-19 pandemic, it partnered with the Mental Health Commission of Canada to introduce training and a digital program that develops self-care, self-leadership, resilience, and mindfulness practice. Executives have credited the focus on mental health with contributing to a drop in employee turnover from 35.0 to 24.5 percent.98

Create a portfolio of evidence-based interventions for a sustainable healthy workforce

Many employers care deeply about their employees’ health and well-being, introducing interventions designed to help, including yoga classes, meditation apps, wellness days, and awareness campaigns. Often, however, the portfolio of interventions is not a coherent whole that significantly moves the needle to address specific workforce needs. To make interventions effective, employers need to understand and proactively address employees’ needs at the individual, team, and organizational level. Companies often provide ways to help individual employees, but mental health apps and gym access alone are not enough if systemic problems remain.

So where does a CEO, CHRO/CPO, CFO, or chief medical/health officer start to create a portfolio of effective interventions? How can leaders select the right evidence-based employee health and well-being interventions?

The ideal portfolio aims to address both immediate needs (reactive) and root causes (proactive) and is made up of a complementary mix of interventions, some of which are designed to help individuals and teams, some to reshape jobs, and some to change the organization (Exhibit 1299Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2, 2023. These percentages are an indication and based on the research model of the research performed by McKinsey Health Institute. Naturally, emphasis for different levels and drivers is related to the designed research model. In this research, demands at the team and job level were more strongly represented in the constructs measured, whereas the constructs included on enablers had a wider spread across four levels: individual, job, team, and organization. Every organization needs to do its own investigation of what is most relevant to it and its unique contexts, though insights from a well-researched model such as the job demands and resources model, may be helpful reference to get started.).

Interventions should take a portfolio approach across the organization and team, job, and individual levels.

The reason a portfolio approach is important is that work and health-related outcomes are influenced by both enablers and drivers.100Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2, 2023. Enablers are the aspects that can provide positive energy, such as meaningful work and psychological safety. In comparison, demands are challenges at work that require sustained cognitive, physical, or emotional effort, such as toxic workplace behavior and role ambiguity.

Holistic health is most strongly influenced by enablers, such as the employee experience of having self-efficacy, adaptability, feelings of belonging, meaningful work, and psychological safety. Interventions that address these drivers include self-efficacy and adaptability training, purpose workshops, and psychological-safety leadership and team training. Other interventions to support holistic health include workplace nutrition programs, peer mentoring, job crafting, and physical-activity nudges.

In contrast, burnout symptoms are more strongly associated with demands, such as the employee experience of toxic workplace behavior, role ambiguity and role conflict. Interventions related to these drivers focus on eliminating toxic behaviors, making roles clearer, and helping teams and team leaders reduce confusion and role conflict. Additional interventions include offering high-quality mental health awareness training, managing teams’ ways of working, creating space for recovery, and adjusting roles to enhance control and autonomy.

The best place for an organization to start addressing demands and building enablers for employees is at the team and job levels.101Reframing employee health: Moving beyond burnout to holistic health,” McKinsey Health Institute, November 2, 2023. Notably, team-level drivers are predictive of both holistic health and burnout symptoms. Middle managers are crucial to team health and well-being, serving as the link between leadership and employees.102Stop wasting your most precious resource: Middle managers”, McKinsey, March 10, 2023. Their engagement is vital for the successful implementation of employee health and well-being interventions. Empowering and training middle managers to prioritize the health and well-being of their teams can unlock employee growth and productivity. Investing in middle management pays off: research shows that organizations with top-performing middle managers generate three to 21 times more in total shareholder returns.103Investing in middle managers pays off—literally,” McKinsey, June 26, 2023. Additionally, including employees in the decision-making process through surveys, focus groups, and well-being committees ensures that subsequent actions meet their needs and realities.

Case study: Vitality provides personalized health interventions to create a healthier workforce

Vitality is a health and life insurer whose well-being strategy for employees comprises five pillars—physical, mental, social, financial, and lifestyle—and features on-site health checks, mental health counseling, mental health awareness training for managers, lunchtime leadership walks, and life-stage-specific medical support. The Vitality Programme provides incentives and rewards for employees to take actions that support healthier living, and 72 percent of participants report that the program inspired them to make positive lifestyle changes. Vitality’s Next Best Action feature alerts members and employees to the one action that would have the biggest impact on their health, based on the results of their annual online health review, and directs them in how to make this change.

The organization’s focus on employee well-being has delivered a healthier, happier, more productive workforce, reflected in employee experience survey outcomes. Vitality research shows that employees who are highly engaged with the Vitality Programme lost 50 percent fewer days to presenteeism, recorded 28 percent fewer absences, and took 46 percent less time to recover from sickness.

Each organization is unique, and tailoring interventions accordingly is crucial for improving overall employee well-being. The good news is that this often involves investing smarter rather than more. To realize the full potential of their workforce, organizations should develop a strategic portfolio of health investments that address poor health and promote well-being. Leaders should commit to long-term, systemic approaches, supported by evidence-based interventions and proactive involvement at all organizational levels. True progress requires smart investment that tackles both symptoms and root causes, fostering a healthier and more productive workforce.

Conclusion

Employers should invest in and improve employee health to benefit their organizations and society.

Work is a cornerstone of many people’s lives. However, it should not leave people less happy, less healthy, or less fulfilled. Physical, mental, social, and spiritual well-being are intricately tied to work, productivity, and performance. Investing in employee health and well-being is both an ethical obligation and a strategic organizational imperative with tangible returns.

This report offers a plan that goes beyond the behavior of individuals. It sets out the mechanism for changing a company’s culture, addressing specific workplace requirements, and improving health and well-being at every level of the organization—thereby developing a healthier, more productive workforce. It shows why prioritizing a healthy workforce is essential and beneficial, as well as providing practical guidance that will help employers feel enabled and empowered to seize the opportunity.

Firstly, the case for investing in holistic employee health is substantial. With more than 3.5 billion people dedicating a substantial portion of their lives to work, the workplace plays a crucial role in fostering holistic health. Investing in health presents a global economic value opportunity worth 17 to 55 percent of average annual pay per employee. Organizations that invest are likely to reduce healthcare costs, enhance productivity, improve talent management, boost company performance, and strengthen organizational resilience. Increasingly, investors are emphasizing employee health and well-being as a crucial component of the social element of ESG criteria, recognizing its impact on long-term organizational success and shareholder value. Regulatory pressures are also mounting globally, with stricter standards and compliance requirements being introduced to ensure workplace well-being, such as those from the European Union and the United States’ OSHA. Applying these rules not only reduces the risk of breaking them but also improves a company’s reputation as socially responsible. This helps meet growing demands for transparency made by consumers, employees, and communities.

Good health is good work and good work is good health.

Professor Sir Cary Cooper, CBE, Professor of Organizational Psychology and Health at the ALLIANCE Manchester Business School, United Kingdom

Secondly, disparities in holistic health and burnout symptoms across various industries and demographics underscore the need for tailored interventions. Employees who identify as women, LGBTQI+, younger, neurodivergent, or with lower levels of education or income report poorer health outcomes than their counterparts. It is therefore important to understand the root causes of poorer health and create inclusive workplaces. A one-size-fits-all approach will not reap the full rewards; leaders must recognize and address the needs of different demographic groups and develop targeted interventions that enhance holistic health and reduce burnout. Employers and employees need to work in partnership to improve health, as neither can achieve the best results on their own. Unless employers help all employees achieve their full potential, they risk limiting the health and well-being of their workforce, restricting their societal and economic contributions, and missing out on substantial value creation for their organization.

Finally, leaders should address workforce health by taking a strategic approach, committing to making smart investments that tackle both symptoms and root causes and measuring the impact of those investments over time.

Returns on investment can be evaluated using customized metrics that extend beyond the traditional markers of sickness, absence, disease, safety, and injury. A four-step approach to building an investment case requires employers to understand the status of employee health and well-being within the organization, calculate the investment case opportunity, use pilot programs to measure intervention effectiveness, and monitor improvements over time. Advances in data analytics and artificial intelligence (AI) offer substantial opportunities to integrate health metrics into core organizational strategies. For example, AI could be used to translate specific workplace safety information, customize health-emergency protocols for a building, or aggregate reputably sourced health tips and links into an employee newsletter.

Overall, leaders can benefit their organizations by recognizing that creating a healthier workforce is not an isolated goal but a foundation of organizational performance and resilience. By prioritizing employee health, organizations can transform work into a source of life enhancement, unlock human potential, and reap financial benefits. This report provides the evidence and tools for leaders to feel empowered and enabled to take those crucial steps today.

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