McKinsey Insights: Healthy Organizations Lead to Healthy Businesses

• Healthy workers was observed to perform better.
• Companies with higher health-related concerns have higher profits.
• Healthy organizations lead to better business outcomes.
• Healthy organizations control healthcare costs.

Jobs play essential roles in one’s life. Work is necessary for an individual’s wellbeing—it must meet financial and psychological needs. Globally, workweeks can range from under 40 hours to close to 50 hours, meaning that companies play a crucial role in ensuring a healthy workplace.

The workplace should represent a positive aspect of people’s lives and not just an obligation to pay bills at the end of the month. To guarantee employees’ satisfaction and, consequently, increase companies’ productivity, many companies have discovered the benefits of health policies and are now implementing new modern systems at work.

According to McKinsey’s Organizational Health Index (OHI) study, healthy companies dramatically outperform their peers. The researchers’ team affirms the proof is irrefutable, admitting that Mckinsey organizations part of the OHI delivers approximately three times the returns to shareholders as those in the bottom quartile.

Annamaria Di Fabio, professor, and academist in the Department of Education and Psychology of the University of Florence, has developed a concordance study with McKinsey’s report showing that healthy organizations lead to better results. In her article, she states that healthy organizations tie to culture, climate, and practices to create an environment conducive to employee health and safety conducting to organizational effectiveness.

Monitoring Health to Optimize Performance

Annamaria Di Fabio links organizational profitability with workers’ wellbeing. The academist states that a positive perspective leads to success and excellence, stressing how positive occupational organizational health psychology should represent a primarily preventive approach. According to the Italian researcher, a company’s focus should not be on deficiency and failure but on “a positive organizational attitude that proposes interventions at different levels: individual, group, organization, and inter-organization.”

Wellness programs mainly contribute to improving employees’ health; nevertheless it also highly contributes to control companies’ healthcare costs, improve attendance, increase productivity, and others that we can observe in the chart below. Overall, this leads to better performance and a happier workplace.

As per McKinsey’s researchers, monitoring their employees’ health was vital to understand how their wellness leads to better performance. Over the past ten years, OHI representatives monitored the health of over 1,500 companies across 100 countries.

The company combines employees and their respective managers’ views—more than 4 million testimonials have been collected for this article—on management practices and subscribe scores to each practice and outcome.

The study showed that there is a strong and static correlation between health and financial performance. Besides, this study is even more dynamic: it highlights the vast majority of companies’ potential to improve their health and how this can correspond with enhanced performance. Their findings include the following:

• Most of the companies perform better when they improve their health. Roughly 80 percent of companies that took concrete steps on health saw an overall improvement. Companies’ earnings also increased their earnings and total returns to shareholders (TRS) by 18 percent and 10 percent after making changes to their health.
• Companies whose health-improvement worked took them from the second quartile of the OHI to the top quartile. These companies reported the biggest financial-performance boost, a clear sign that working on health is an important factor in improving performance.

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A company’s concern for the health of its employees has several benefits for the company’s performance. In addition to saving healthcare-related costs and increasing employees’ attendance, it contributes to their motivation at work and, consequently, to better results.