Executives who want to ensure their organizations remain at the top of their game must pay increasing attention to the physical and mental health of their workforce. “Organizations that prioritize health often see marked improvements in productivity, reduced absenteeism, lower healthcare costs, and heightened employee engagement and retention,” said a January report from the World Economic Forum (WEF) and McKinsey Health Institute (MHI), a nonprofit part of McKinsey & Company.
Healthy employees also can handle external issues more effectively. They are “better placed to adapt to increased regulatory pressures … and withstand greater [pressures] from investors and the public,” the WEF-MHI report said. “Moreover, a healthier workforce is more resilient and adaptive [as well as] more capable of navigating the uncertainties and challenges of a rapidly changing world.”
That applies to “companies of all sizes [as they 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,” the report said.
Top executives and decision-makers should take swift, actionable and sustainable decisions to address workers’ physical and mental health. “As burnout rates rise, chronic diseases become more common and people work longer, there is an urgent need for organizations, policymakers, and stakeholders to prioritize employee health,” the report said.
Case for investment
Increased spending on developing programs targeting employees’ physical and mental health is an emerging trend. “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,” the report said.
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,” the report said. In the next 15 years, ”NCDs will affect an even bigger portion of workers as many countries see their population growth rates decline. Egypt’s population growth rate has been dropping consistently since 2013, going from 2.37% to 1.57% in 2024, according to data aggregatory MacroTrends.
Mental health also is a growing concern for employers and employees who stayed home during COVID-19. The pandemic “accelerated and exacerbated long-standing corporate challenges to employee health … in particular [their] mental health, with reports of burnout rising,” the report said.
The WEF-MHI findings estimate that “investment in employee health could boost global GDP by between 4% and 12%, with high- and middle-income countries each contributing roughly half of that total (2% to 5%).”
However, the document warned that while “all economies benefit from improving the health of [their] workforce … the distribution of value varies” among high-income, middle-income, and low-income nations.
The report said the poorer a country is, the more employees would benefit from their companies’ investments in physical and mental health programs. “Average salaries are lower in middle-income countries, so analysis suggests that these [nations] have up to four times as many employees who would benefit [versus] high-income countries.”
Additionally, those employees get “limited financial security [from] the state, [putting even] greater pressure on workers to maintain a stable income and … healthcare.”
Another reason employers operating in struggling economies need to invest more to protect employee health is that “within low and middle-income countries, NCDs meaningfully influence employee health, well-being, and productivity,” the report said.
Ultimately, government regulations would dictate the minimum companies spend on employee health programs. “Around the world, governing bodies increasingly recognize the importance of employee health and well-being, and regulatory pressures are mounting,” the report said.
High-pressure jobs
The report surveyed employees in 35 industries, concluding that most workers across hierarchies and sectors suffer physical and mental health issues, but to different extents. “In only 10% of the industries surveyed did more than [33%] of employees report burnout symptoms,” the report said. However, in “66% of the industries … 20% of employees said they were burned out, [while] in no industry did more than 75% percent of employees say they were healthy overall [aka holistic health].”
Employees complaining of burnout and low holistic health work in accounting, retail, agriculture, forestry, fishing, livestock, shipping and distribution, and entertainment and recreation. Conversely, human resources, construction, administrative workers, support services, education, and engineering/architecture said they had “good holistic health and low burnout.”
The report said the results did not reveal common features that would explain why specific industries outperformed others. “The absence of consistent patterns across industries suggests that for both highly and poorly performing sectors, the drivers of workplace health are … not easily attributable to specific roles.”
WEF-MHI’s report also asserted that “[no] single aspect of health drags down the average of low-performing industries, such as may be expected of jobs that are physically or emotionally demanding.”
Another peculiarity in the report’s findings is that “some examples … run counter to global trends.” For example, front-line and construction workers should complain about their health more than managers. However, results show that non-managers have “high holistic health.”
Stressed individuals
A “much clearer story emerges” when assessing employees’ physical and mental health risks using “demographic data, such as gender, … age, education, and income.”
By gender, 46% of women were more likely to report exhaustion symptoms versus 38% of men, the report noted. It said that discrepancy is because most companies tend to have more male employees, so health programs tend to prioritize their physical and mental health.
Age also can determine mental and physical health risks. “Entering the workforce during a global pandemic, amid inflation, recession fears, geopolitical conflicts and climate change has heightened anxiety for younger employees (up to 28 years old),” said the report. “In contrast, the extensive work (and life) experience of the over-60 generation may contribute to their improved health outcomes.”
A breakdown shows 51% of the “youngest working generation” has “high holistic health” versus 66% of the “oldest” counterparts. In terms of burnout, 27% of the youngest workers have “high burnout symptoms” versus 9% for the oldest. Meanwhile, 42% of young respondents reported both “good holistic health and [exhibited] low burnout symptoms” versus 57% for the oldest workers.
Pressure of achievements
Education levels also play a role in employee resilience when it comes to physical and mental health deterioration. “College- or graduate-level education correlates with reported higher holistic health and … 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% versus 70%).”
Compensation is another factor. In the WEF-MCI survey, “only 41% of individuals with poor financial status reported good holistic health compared to 76% of those with good financial status.”
Income stability also plays a role in an employee’s health. “Those reporting low financial stability reported 27 percentage points lower holistic health (47% versus 74% for financially stable employees) and [more than] 30 percentage points more burnout symptoms (38% versus 5% for financially stable workers).”
Another factor is “job insecurity,” the report said. “45% of respondents with high job insecurity reported burnout symptoms compared to the global average of 22%.” Their most significant mental health issues were depression, anxiety [and] burnout,” said the report. Meanwhile, physical health problems included back pain, headaches, and high blood pressure.
Employees’ job responsibilities and position in an organization also impact mental and physical health. The report found that 80% of top executives reported good holistic health. However, 24% said they experienced burnout symptoms versus the global average of 22%. Non-managers reported even higher burnout at 26%. The WEF-MHI did not give them a holistic health score.
The report also broke down mental and physical health by responsibility toward others. “Caregivers were more likely to report higher holistic health (61% versus the global average of 57%), driven by experiencing better social and spiritual health.” However, they were 17 percentage points more likely to report higher burnout symptoms (37% versus 20% for non-caregivers), primarily driven by exhaustion.
ROI on health
Good corporate practice requires top executives to measure the return on their investments (ROI). Investing in health programs for employees is no different, but it is more complex to calculate. “Executives regularly struggle to answer the question, ‘Is our investment in employee health driving sustainable improvements in performance?’” the report said.
It stressed “no single [key performance indicator] can measure the impact of employee health and well-being investment.” However, it noted that while “metrics should be tailored to each organization’s specific needs, [there is] a tried and tested approach [that] should work for most organizations, whatever their context.”
The first step is to “understand the status of employees’ health and well-being,” starting by “conducting comprehensive health and well-being surveys [to] diagnose workforce needs.”
Those surveys measure “efficiency of completing tasks, innovation rates, sales and customer service sentiment (productivity), number of workdays lost to sickness (absenteeism) and lost time caused by physically present employees working at reduced levels,” the report said.
Another factor influencing the ROI of employee health programs is “what an employee pays when seeking healthcare, what the employer covers under any employer-sponsored insurance [program] and any costs associated with work-related injuries.”
Build a reputation
Having policies and programs that protect workers’ health would likely also benefit the company’s external environment. “For example, executives in organizations with a global presence may consider investing in wide-scale health education outreach.”
Those health programs should benefit companies indirectly. The report said investing in physical and mental health programs should help to attract and retain talent. That would “not only enrich company culture but also boost business performance as employees with longer tenure have between 12% and 30% higher output than newer employees.”
Additionally, marketing a company to the outside world as having a “culture and value proposition” of offering top-tier health programs for employees “may make [it] more attractive to investors, customers, and partners,” the report said.
Health’s cornerstones
To create solid employee physical and mental health protection frameworks, top executives need to look “beyond the behavior of individuals.” Instead, decision-makers need to “change a company’s culture [to reach] every level of the organization.”
The report stressed there is no one-size-fits-all solution, as leaders must recognize and address the varying needs of different groups. “This approach may involve greater autonomy and empowerment for teams and individuals to manage their work and resources effectively,” the report said.
Ultimately, successfully creating a healthy workforce would require commitment from the entire organization and integration in every part of business operations. “Employers and employees must work in partnership to improve health, as neither can realize the full benefits on their own,” the WEF-MHI report stressed. “Whatever programs they develop, leaders should recognize that creating a healthier workforce is not an isolated goal, but a foundation of organizational performance and resilience.”
This article first appeared in February’s print edition of Business Monthly.
