Employers who respond positively to the changing needs of employees during their lifecycle and career stages improve their success in attracting, motivating and retaining workers. These workers will in turn exert effort on behalf of their company and play a full part in making it efficient and productive. While the ways that employers use to better understand and respond to changing employee needs will differ between countries and sectors, the principles underpinning them are likely to have wide applicability to employees of all ages and in all occupations. This chapter review two key aspects of work: work-life balance and workforce health and well-being – which can provide an attractive environment for employees to thrive and be engaged and productive.
Promoting an Age-Inclusive Workforce
4. Making jobs attractive
Abstract
Infographic 4.1. Key facts: Job attractiveness
Introduction
Making work attractive to a workforce whose composition is constantly changing requires agility and flexibility on the part of employers and support from governments. To ensure that there is an adequate supply of skilled, healthy and motivated workers it is important that work is inclusive, that it embraces workforce diversity and that it offers workers opportunities for personal growth and fulfilment. In the context of longer working lives, it is even more important that employers devise working conditions that support workers to retain their motivation, physical and mental health, and productive capacity at all ages.
What makes a job attractive: Do age differences matter?
As highlighted in Chapter 2, the widespread view that it is possible to categorise workers into distinct age cohorts within which the needs of workers can be neatly summarised and segmented is rarely based on strong evidence, and can often underplay the many more similarities in work needs shared across the generations.
Of course, differences between ages do exist. In general, older workers tend to have more chronic health problems, meaning that support to stay active at work and to accommodate the symptoms of chronic pain or fatigue may be greater for older workers on average. But beyond the average, there is substantial individual variation in the support that is needed as well across age groups and life stages.
Moreover, reviews of the academic research suggest that the factors that make work fulfilling for older workers are largely the same as they are for other workers. Older workers look for employment that is personally meaningful, flexible, intellectually stimulating, sociable, age-inclusive and offers any adjustments needed for health conditions and disabilities. Older workers are more likely to stay in work if they think that their work matters, their employer supports them and their needs are taken seriously. They value opportunities for learning, mentoring others, and career progression. These factors support a positive work-life balance and strengthen connections to employers, colleagues and customers. Fulfilling work helps to promote self-esteem, confidence, engagement and performance. The principles for managing older workers are effectively the same as for staff of any age (Marvell and Cox, 2017[1]).
Data for 43 countries from the International Social Survey Programme (ISSP) show that, indeed, the importance attached to a range of features of work vary little by age (Figure 4.1). While there are some differences on the question of career advancement (with younger workers attaching more importance to this feature), the needs across age groups cluster closely, suggesting that intergenerational similarities are more noteworthy than any differences.
Businesses and governments can both gain from developing a better understanding of the ways that the needs of the workforce for fulfilling, high quality and rewarding work change over time, and over the lifecycle. This will make it more likely that policies and practices can be developed and implemented which maximise the chances of attracting, motivating and retaining skilled, energised and committed workers who can add to the productive capacity of the employers for whom they work and the wider economies within which these firms operate.
Figure 4.1. Attractiveness of job attributes by age group
Note: The countries included are: Australia, Austria, Belgium, Chile, the Czech Republic, Estonia, Finland, France, Germany, Hungary, Iceland, Israel, Japan, Latvia, Lithuania, Mexico, New Zealand, Norway, Poland, the Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Taiwan, the United Kingdom and the United States.
Source: International Social Survey Programme (2015, Work orientation module).
The key, however, is to invest effectively in improving job quality for workers at all ages. There is a substantial body of evidence that good job quality can improve workers’ productivity, health, performance and engagement, all leading to better outcomes for companies. To help promote a better understanding of what this entails, the OECD has developed a framework to analyse and assess job quality. The framework considers three objective and measurable dimensions:
Earnings quality: captures the extent to which earnings contribute to workers’ well-being in terms of average earnings and their distribution across the workforce.
Labour market security: captures those aspects of economic security related to the risks of job loss and its economic cost for workers. It is defined by the risks of unemployment and benefits received in case of unemployment.
Quality of the working environment: captures non-economic aspects of jobs including the nature and content of the work performed, working-time arrangements, workplace relationships or unhealthy working conditions. These are measured as incidence of job strain characterised as high job demands with low job resources.
Quality work environments – the primary focus of this chapter – have an impact on various business outcomes, such as productivity gains, service and product quality, innovation, customer satisfaction/loyalty, and financial performance. Various studies (Marmot et al., 2020[2]) have shown that there is a strong relationship between high levels of “job quality” (for example, autonomy, control, voice, challenge, variety, growth opportunities, social support and a balance between effort and rewards) and improved performance and better physical and mental well-being.
Despite these benefits, many workers across the world report that they are working in poor quality jobs. Over one‑third of workers in OECD countries experience “job strain” – where work demands (e.g. physical demands, work intensity, inflexibility of working hours) exceed the job resources available to cope with these demands (e.g. task discretion and autonomy, training and learning opportunities, and opportunities for career advancement) (Figure 4.2).
This is bad for workers and bad for business. There is strong evidence of, on the one hand, a negative relationship between job strain and productivity, and, on the other hand, a positive relationship between job rewards and productivity (Arends, Prinz and Abma, 2017[3]; Warhurst et al., 2018[4]). Better productivity outcomes, in turn, translate into higher financial performance. Business units and workplaces with highly engaged employees are more profitable (Harter, Schmidt and Keyes, 2012[5]) and perform better in terms of a number of indicators including revenue growth and stock gain (Rayton, Dodge and D’Analeze, 2012[6])
Figure 4.2. Job strain affects four out of ten workers across the world
Note: The OECD is an unweighted average and excludes Canada, Colombia, Korea and Switzerland.
Source: OECD Job Quality Database, http://stats.oecd.org//Index.aspx?QueryId=100555.
Action by employers and governments in two key areas can help workers stay productive and contribute to longer careers. These include (i) fostering work-life balance for all and (ii) promoting workforce health and well-being.
Getting work-life balance right for all workers
Why good quality flexible work matters?
Offering flexible working options to all workers regardless of age or life stage can benefit an employer in many ways. Employees who are given flexible work options are less prone to burnout and do not suffer as much psychological distress in comparison with workers who are not allowed to work flexibly. Flexible work arrangements are effective in helping organisations respond to the potential loss of skills linked to the retirement of older employees. Flexible work options can also help people to manage their work and family responsibilities better (McNamara and Tinsley-Fix, 2018[7]). Flexible work arrangements have also been shown to result in happier, healthier, and more productive employees (Moen et al., 2016[8]). A recent survey of working at home during the COVID‑19 “lockdown” also reported a positive link between control over work-life balance and mental health (Bevan, 2020[9]).
It is clear that those employees who value flexible working as an important aspect of their working environment have positive responses towards their employers. These benefits are highlighted in the results of an International Workplace survey of 18 000 employees (Figure 4.3).
Figure 4.3. Effects of flexible working
Source: Wood (2019[10]) Finland is about to take flexible working a step further, World Economic Forum, https://www.weforum.org/agenda/2019/08/finland-s-doing-something-cool-with-flexible-working/.
Prevalence of flexible working time arrangements
Recognising these benefits, access to some forms of flexible working time arrangements (FWTAs) have increased in many developed economies through a combination of regulatory change and more enlightened HR practice. According to the recent AARP Global Employer Survey (2020), roughly 93% of large firms provide their employees with one or more options for periodic telecommuting, full-time teleworking, working “compressed” weeks (working an extra hour each day to get Friday afternoon off) or phased retirement allowing workers to reduce their hours as they approach retirement (Figure 4.4). Large organisations are more likely to offer FWTAs than small or medium-sized organisations, as it can be costlier for smaller businesses to rearrange tasks among workers. The large prevalence highlights the impact of COVID‑19 where organisations, in some cases, turned in a virtual workforce overnight and flexibility became the name of the game. Prior to the pandemic, about half of global employers allowed periodic telecommuting, with 42% offering compressed work schedules, and 37% offering full-time teleworking (Perron, 2020[11]). Similarly, evidence from Europe suggests that take-up of teleworking arrangements remained quite limited and, contrary to widespread belief, without much increase over the years (OECD, 2020[12]).
There is also a socio-economic gradient in the availability of good quality flexible work. A number of personal and family characteristics are closely associated with the use of flexible working arrangements. Among all personal characteristics, the level of education is most closely correlated with access to, and use of, flexible working arrangements. Employees with a university degree are more likely to have greater control over their working time and are also more likely to work from home at least occasionally. Employees with long commutes also report more flexibility in their working time, and a greater likelihood to work from home, while they are less likely to take a break for personal affairs during the working day (Glenn Dutcher, 2012[13]).
Figure 4.4. Flexible working arrangements offers by employers
Note: SMEs (small and medium-sized enterprises) are defined as having less than 250 employees. Based on 3 831 Interviews conducted between March and May 2020 across all OECD countries except Colombia.
Source: AARP Global Employer Survey 2020.
Overall, evidence suggests that work-schedule flexibility improves employees’ views of their own work-life balance. In particular, having some freedom to set starting and finishing times and arrange breaks during the working day increase the perception that working hours fit in with family and social commitments. Employees who occasionally work from home, and who have some control over their daily working time, are less likely to report that family responsibilities prevent them from giving enough time to their job.
In addition to its benefits for work-life balance and well-being, teleworking or the autonomy in deciding where to perform the job – might have benefits for productivity, although the findings are inconclusive. Employees working from home are more engaged at work because working from home enables them to organize their work more efficiently; display higher innovative performance on the organisational level and higher creativity. However, some studies find that teleworking causes negative feelings such as isolation and has a negative productivity effect on dull tasks (Glenn Dutcher, 2012[13]), and reduces knowledge transfer between employees (Saint-Martin, Inanc and Prinz, 2018[14]). The divergence in the results indicate that providing employees with flexibility on where to perform the job could have potential benefits for firm productivity, but teleworking arrangements need to be carefully designed to meet the needs of workers and employers. For instance, ensuring that workers have the instruments to work from home under good conditions (computer or tablet, broadband connection, room to work undisturbed etc.) are key to offset some of the negative effects. It will also require planning work organisation, in particular in the case of a second COVID‑19 pandemic wave, and training the workforce to make the most of teleworking (OECD, 2020[12]).
Employer policies to promote flexible work arrangements at the workplace
To provide greater access to flexible working arrangements, many governments have taken the legislative route. For example, in countries such as Australia, Finland, Norway and Sweden, the right to flexible working is targeted at carers and/or parents of young children. By contrast, a “right to request” flexible working is granted to all employees, irrespective of their reasons for seeking change in Belgium, France, Germany, New Zealand and the Netherlands for workers in firms with ten employees or more, and since 2014 the United Kingdom (OECD, 2016[15]). Given workers’ risk of exposure to COVID‑19 at the workplace or their need for greater flexibility to work from home as schools and care facilities were closed, many countries also took steps to facilitate a massive transition towards teleworking for workers who do not have to be physically present at their workplace. However, to be effective, legislation needs to be accompanied by support from collective agreements and with changes in work organisation.
At the employer level, there needs to be good information on flexible work arrangements. Evidence from UK public hospital employees (representing an older than average workforce), revealed that most had limited knowledge of the availability of flexible working opportunities, or how changing work patterns might affect pensions in later life, a gap that informs the proactive choices they are able to make (Weyman, 2013[16]). Good practice can include establishing well-communicated protocols and procedures around flexible working arrangements to improve employee access to them. These might be publicised in a range of ways, for example, through workshops, newsletters and internal communications, as well as being embedded in workforce knowledge from the point of induction.
Flexible working arrangements can also be most successful when they are taken on as a central part of organisational strategy. To ensure that older workers feel sufficiently secure to request flexible work without damaging their occupational position is key in building organisational cultures in which flexibility is mainstreamed. One way in which this can be supported is through ensuring that flexible working arrangements are used by senior staff (Smeaton and Parry, 2018[17]).
Simplifying flexible working time arrangements
However, employers may face a range of barriers and challenges around flexible arrangements. For instance, some businesses worry that implementing flexible working practices might restrict customer service quality. Such concerns can lead some employers to focus on the difficulties of flexibility rather than its benefits and make them reluctant to extend these practices more widely, despite demand from employees. There is some evidence from European employers who have been compelled to offer flexible or remote working during the COVID‑19 pandemic, that some of their objections to working at home and flexible working have softened (Eurofound, 2020[18]).
Another theme which emerges is that, even if employers are positively disposed to offer flexibility, they are keen to avoid too many highly individualised arrangements. Instead, they prefer to provide a limited “menu” of flexibilities which suit different groups of employees with different needs. For example, in its Flex@Q programme, the Australian airline company Qantas has five approaches to flexibility on offer (Box 4.1). This approach is easier to manage and monitor and balances the needs of employees with the need to maintain operational efficiency and customer-responsiveness.
Box 4.1. The Flex@Q Programme, Qantas, Australia
Prior to developing Qantas’ organisation-wide focus, flexible working practices at the company existed, but were often formal arrangements centred on mothers and carers. Flex@Q is Qantas’ approach to recognising that its people have different lifestyles and commitments, and creating a culture and workplace where employees are encouraged to think about how they can incorporate flexibility in to their role. The approach also encourages managers to proactively talk to their team members about how flexibility could work for them. This does not mean that all roles can access flexible working all the time. Flexibility is available to employees in different ways, depending on their role and business need. Not all leaders or employees believed that flexible working was possible at Qantas, nor that there were benefits associated, so the company piloted their approach and took the time to consult widely with managers and staff before the scheme as a whole was rolled out. There are five components to Flex@Q:
Formal Flex: Contractual changes such as part time working or job sharing.
Rosters & shifts: This includes pattern bid, day off bid, fixed line roster, carer’s line roster, reserve line rosters, shift swaps, shift preferences, shift lengths.
Variable hours: For example, late start times, early finish times, breaks during the day.
Leave: e.g. buy additional leave, single days leave, special event leave, leave at the time of your choosing.
Variable locations: For example, working from home, working anywhere on campus, working in a different location.
Aside from offering benefits to employees who wish to accommodate their family responsibilities, the initiative has also enhanced the company’s ability to deploy its staff more flexibly in the case of short‑term changes to flight schedules and other work demands. Rather than approaching flexible working as a stand-alone programme, Qantas identified where the Flex@Q initiative could complement other organisational initiatives, including Male Champions of Change, unconscious bias training and the roll‑out of new IT programs. This meant Flex@Q implementation was not seen as an independent change initiative, but as a key enabler of broader, multifaceted organisational change.
Aligning demand for flexibility from customers and employees can strengthen the business benefits of flexible work practices
Introducing flexible working arrangements is not only driven by employee needs. Another feature of modern economies is that a growing proportion of customers also want businesses to be flexible and agile in the way they provide access to products and services. This can mean that organisations which can “flex” to provide 24/7 services or use both face-to-face and online access to products are most likely to achieve a competitive advantage over their rivals.
Thus, by aligning and matching the demands for flexibility from customers with those from employees, the business benefits of flexible working practices are more visible to the employer and can make it easier to make a “business case” that improved access to flexibility has mutual advantage for the employer and the employee. For example, a large retailer may need to have stock replenished and placed on shelves overnight, requiring staffing patterns that can deliver this. Establishing a working model that is attractive to employees who want flexibility (e.g. casual student labour, working mothers) can be of benefit to both workers and the retailer. The model below (Figure 4.5) illustrates how this “mutuality” principle can work.
Figure 4.5. Balancing demand for flexibility from employees and customers can be a win-win
Source: Adapted from Jones et al. (2007[19]), “Transforming work: reviewing the case for change and new ways of working”.
But the choices employers can make about the kinds of flexible working practices must take account of benefits to the employee and those which offer more advantages to the business. For example, the use of zero-hour contracts is generally associated with businesses which need to keep fixed labour costs to a minimum in markets where demand fluctuates. In general, they tend to favour the employer over the employee. However, shift-swapping in some sectors (e.g. health care, rail or aviation) can provide beneficial access for employees to a highly personalised and short-notice form of flexibility for employees whose domestic caring responsibilities, for example, may change frequently. In a recent series of 16 case studies of US employers, the Urban Institute found that most had “both business‑based and values-based motivations for providing supports around paid leave, workplace flexibility and control, and child care”’ (Stanczyk et al., 2019[20]).
The publishing company Hachette has sought to test the “mutuality” principle in the way that flexible working practices are designed and tested. The use of the so-called “Flexible Fortnight” approach was intended to allow both employees and their sometimes-sceptical managers to trial different approaches to flexible working before adopting them wholesale. Again, this approach recognises that flexibility has to be advantageous to both employees and the employer if it is to be sustainable in the medium-term.
Box 4.2. Flexible Fortnight at Hachette book group, France
Hachette is a publishing company with operations in Europe and the United States.
The types of flexible working within Hachette include:
Part-time working: around 15‑17% of employees are working part-time.
Working from home: either ad hoc or agreed contractually.
Term-time-only workers: mainly sales representatives and customer service staff who are only required to work during school term time as they work alongside schools.
Compressed hours: in general, this type of flexible working does not work as well within publishing job-shares.
There is a long-standing cultural tradition within publishing, that in June, July and August working hours are compressed so that employees can take Friday afternoon off. Generally, working from home one day per week works well across the organisation for most job roles, which tend to be office based. It is common for employees in editorial roles to working from home, given the nature of their work, and particularly when working on structural edits of a book. Working from home can offer an undisrupted quiet environment for them to concentrate on their work, as opposed to the busy open-plan office.
The company also introduced “Flexible Fortnight”, an initiative which aims to encourage employees to trial their ideal flexible working arrangement and encourage the uptake of flexible working across the organisation. Flexible Fortnight was based on four options: non-standard start and end times; working from home; reduced working hours; and working from another office. As part of this initiative, Hachette can specify a trial period for flexible working arrangements and ask the line manager and employee to consider the impact after six months. This allows both parties to consider any learning: is it working, what has gone well, what hasn’t gone well, and so on. The company reports improvements in engagement and retention resulting from these flexibility programmes.
Caring for caregivers
Caregiving is an issue for many people both at work and on the margins of the labour market and it can often be a reason why some work fewer hours or stay out of work for long periods (Ciccarelli and Van Soest, 2018[21]). The COVID‑19 crisis has further emphasised the need to support workers with caring responsibilities. In a UK survey of people working at home during the “shelter at home”, 32% lived with dependent children and 16% provided care for another adult or elderly relative. Population ageing also leads to an increase in requests for elder care assistance. In the United States alone, more than 1 in 5 adults (21.3%) are caregivers. This represents an estimated 53 million adults, up from the estimated 43.5 million caregivers in 2015 (AARP, 2020[22]). Overall, demand for long-term services and supports is expected to grow in the coming decades, with the proportion of the population over 80 years-old projected to double by 2050 in the OECD (AARP, 2020[22]; OECD, 2020[23]). Employers are recognising how providing care to a family member can impact their ability to perform at work. In fact, more than 60% of all caregivers are employed and juggling the responsibility of working and also caring for a loved one. These caregiving responsibilities can lead to increased absences, and an increase in stress and anxiety levels, resulting in decreased productivity. There is a range of options to help family caregivers, including more flexible work schedules, childcare and eldercare assistance, paid family leave and access to services to assist with their caregiving activities (see Box 4.3).
Of course, many employees without caring responsibilities also value flexibility and the opportunity to balance the demands of work with opportunities to pursue personal activities beyond the boundaries of the organisation. A recent study conducted in a Spanish-based but multi-national technology and travel company found that practices to facilitate work-life balance through flexible working practices benefited carers and non-carers alike, allowing employees without caring responsibilities to engage in learning (Rodríguez-Sánchez et al., 2020[24]). The study also found that providing wide access to such practices improved employee morale and retention. Overall, flexibility in working practices is a feature of modern work environments which many employers have embraced to help deliver attractive arrangements for employees which also result in business benefits.
Box 4.3. Home Instead: promising practice on caregiving
Home Instead aims to model an age-neutral workplace, a supportive working environment, and an inclusive culture, as well as to provide opportunities for life-long learning and participation, financial planning for longer working lives, healthy ageing, and supportive caregiving.
Home Instead Senior Care offers a wide variety of programs and benefits aimed at promoting a healthier work-life balance, making it easier for working caregivers to manage their responsibilities, and enabling older employees to ease into retirement. Some initiatives include:
Help for working caregivers: This robust online service provides tools to support employee caregivers, including access to support from experts in health and ageing, a 24/7 resource line, and tips and solutions to help manage work and caregiving responsibilities.
Discount on in-home caregiving services: Employees are eligible for reduced hourly rates when they engage Home Instead professional caregivers.
Caregiving training: Employees have access to the same training programs as Home Instead professional caregivers, including courses in caring for people with Alzheimer’s disease and dementia, and hospice care.
Employee engagement: The Age-Neutral Advisory Group, a cross‑functional committee comprising employees who span four generations, is empowered to ensure that Home Instead embraces the contributions from and provides opportunities to workers of all ages.
Flexible paid time off: Home Instead does not track paid time off. The Honor PTO programme allows employees to take vacation, sick, and personal time in the amount they feel is necessary to achieve work-life balance.
For others looking to create a supportive environment for older employees and caregivers in particular, Home Instead suggests starting with an inventory of existing policies and programs, providing education and resources, building awareness of the issues facing caregivers, and making it safe to talk about caregiving challenges.
Improving workforce health and well-being at work
Why should employers take workers’ health seriously?
In most countries, employers have a legal “duty of care” to protect all employees from ill-health and injury at work. This involves risk assessment, prevention of hazards, reporting of accidents and the introduction of accommodations or adjustments to work which support both job retention and return to work. Good practice can also include early interventions (e.g. referral to specialist support such as physiotherapy or counselling) and vocational rehabilitation.
Of course, not all ill-health experienced by employees can be attributed to their working environment. However poor-quality work, a stressful job, exposure to hazards, strain or physical exertion can make pre‑existing conditions worse. Employers also need to support all employees regardless of age or life stage if they have long-term or chronic conditions which may limit their ability to attend or perform effectively at work. The two most common groups of health problems here are musculoskeletal disorders (MSDs) and common mental health problems such as depression and anxiety. It has been estimated that MSDs in the EU workforce cost EUR 240 billion annually (Bevan, 2015[25]) and that the employment and productivity costs of mental illness cost EUR 260 billion (OECD/European Union, 2018[26]). Others chronic conditions affecting people of working age include cancer, heart disease, chronic obstructive pulmonary disorder (COPD), asthma and neurological disorders such as multiple sclerosis (MS).
Older workers are more likely to be living with multiple conditions, but there are several conditions which are more commonly diagnosed among younger workers which can have a long-term impact on their ability to participate fully in the labour market. These include Crohn’s disease, MS and some forms of inflammatory arthritis. Even in the case of dementia, a health condition experienced almost exclusively by the elderly (the average age at diagnosis is 85), the impact on workers at different ages may not be straightforward. According to the Alzheimer’s Society, there are currently about 40 000 people with dementia under the age of 65 in the United Kingdom and only 18% of them continue to work after their diagnosis is confirmed. This number is likely to increase substantially as the total number of people with dementia in the United Kingdom is forecast to increase to more than 1 million by 2025 and over 2 million by 2051. Yet the biggest impact of dementia on workplaces is the burden of domestic care borne by working family members with elderly relatives who are living with the condition.
The connection between quality of work, workforce health and business outcomes
Evidence on the link between employee health and good-quality work is becoming a lot clearer. In their landmark report, (Waddell and Burton, 2006[27]) asked the question: “Is work good for your health and well-being?” The evidence reviewed clearly highlighted a link; that “work is generally good for physical and mental health and well-being…work can be therapeutic and can reverse the adverse health effects of unemployment…” It also found that: “The provisos are that account must be taken for the nature and quality of the work and its social context; jobs should be safe and accommodating.”
Similarly, (Marmot et al., 2020[2]) has provided compelling evidence of the links between quality of work and health and well-being. It shows that employees in lower-status work had reduced health and lower life expectancy than those in higher-status roles. Lower-status workers experienced more stressors, which had implications including increasing the risk of mental illness, coronary heart disease and gastro-intestinal conditions. Marmot’s idea of the so-called “social gradient” in health applies in organisations as well as wider society, with a clear correlation identified in his research on civil servants between job control and the incidence of coronary heart disease.
There is also a strong link between health and productivity (Figure 4.6). Healthier workers are more productive as they are not limited by their health issues. Moreover, productivity declines in one employee can lead to declines in their colleagues’ productivity, as the co-workers are asked to “fill in the gaps” and compensate. The indirect costs of illness or injury (productivity) then add up to roughly the same if not more than the direct costs (hospital stay and medication), effectively doubling the total amount (McNamara and Tinsley-Fix, 2018[7])
Figure 4.6. Poor working conditions are associated with higher absenteeism and presenteeism
Source: Saint-Martin, Inanc and Prinz (2018[14]) “Job Quality, Health and Productivity: An evidence-based framework for analysis”, https://dx.doi.org/10.1787/a8c84d91-en.
How does poor workforce health affect productivity at work?
Traditionally, the aspect of workforce ill-health that has preoccupied employers the most has been sickness absence from work. Employees who cannot attend work because of ill-health reduce the productive capacity of the organisation, impair the delivery of products and services and cause organisations to divert internal resources or hire in temporary labour to cover the lost time which results. In response, employers often adopt “attendance management” policies which prescribe how absence is reported, controlled and its effects mitigated. Workplace health promotion initiatives such a smoking cessation programmes, exercise classes, healthy eating options in staff canteens and other “lifestyle” support interventions have become increasingly common as they are believed not only to improve attendance but also to improve attraction, motivation and retention. Despite these investments, the evidence that these programmes are effective in improving health and productivity is not strong (Hillage et al., 2014[28]) and it is likely that there are other health factors which have more impact on productivity than sickness absence.
Foremost among these is “presenteeism” – the lost productivity which occurs while attending work when unwell. While it remains challenging to measure accurately, the UK Chartered Institute of Personnel and Development has recently estimated that presenteeism in the United Kingdom has tripled since 2010. Research conducted in a financial services company (Ashby and Mahdon, 2010[29]) found that the three most important factors leading to employees attending work when ill were having personal financial difficulties, work-related stress and pressure from managers and colleagues to come to work when unwell.
The international data suggests that the United Kingdom is not alone in witnessing an increase in presenteeism in parallel with low levels of productivity growth. Data from two waves (2010 and 2015) of the European Working Conditions Survey (Figure 4.7) shows that self-reported presenteeism has grown in the United Kingdom by 15% to almost 60% of the workforce, and in some EU member states it has increased by between 30‑53% (in Greece, for example). The latest data suggest that employees in Malta, France, Denmark and the United Kingdom have the highest rate of presenteeism. It is probably no coincidence that the rise in presenteeism has occurred at the same time as an historic drop in the rates of sickness absence in some countries (e.g. by over a half in the United Kingdom since the 1990s).
Echoing these findings, data from the American Working Conditions Survey (AWCS) shows that presenteeism in the US workforce is very prevalent (Maestas, Mullen and Rennane, 2020[30]). The analysis shows that almost two‑thirds of US workers who have no significant health problems report working while sick at least once during the past 12 months and 75% of workers with significant health problems report working while sick. The same study shows that workers over the age of 50 report low levels of presenteeism, with fewer than 60% of workers over 50 ever reporting presenteeism.
Figure 4.7. Presenteeism in the EU, 2010 and 2015
Source: Eurofound, 2010 and 2015.
In countries with high levels of unemployment and persistent fears of job insecurity, sickness absence can fall and “presenteeism” can rise. If more people who are living with long-term or chronic health conditions are attending work when their health might justify them taking time off work to get treatment or to recover, then this is likely to be a hidden “drag” on productivity even if the data superficially suggests that “labour inputs” have increased (e.g. through higher employment).
A big concern is that employers may be at risk of underestimating employee ill health and missing warning signs by focusing on reducing absence alone. Difficulties of monitoring employee health and presenteeism may be even more challenging with greater number of workers working from home in the wake of the COVID‑19 pandemic. Presenteeism may be detrimental to employee health in the long run because it can “mask” serious illness. In the famous Whitehall II study of the long-term health of UK Civil Servants, (Marmot et al., 2020[2]) found that: “… an elevated risk of serious coronary heart disease was found for those men with bad self-rated health who did not take any sick days at all compared with those unhealthy men who had a moderate number of sick days (i.e. 1‑14 days).”
The cost of presenteeism to employers is estimated to be 1.5 times higher that of sickness absence, so any efforts which employers can make to understand and control presenteeism are likely to have more impact on productivity than a focus on sickness absence alone.
Moving towards a holistic approach to well-being programmes
More employers now recognise the concept of “holistic” well-being, seeing their employees as whole people, including their physical, mental, spiritual, and social lives, and creating an environment where employees feel seen, heard, appreciated and that their work has meaning. Meaningful work is associated with lower depression and can help build work engagement (Allan et al., 2016[31]; Johnson and Jiang, 2017[32]).
Well-being programs which reflect a blend of financial, physical, and social/emotional programs to provide maximum support for employees reflect this holistic approach and recognise that aspects of job quality need to be woven into them alongside other lifestyle and fitness interventions. For example, a growing percentage of companies are expanding their well-being programs to include employee financial security, such as access to debt management tools or student loan counselling. Financial security programs are the third most-popular offering, following physical well-being programs and emotional health programs. Financial well-being is an important well-being pillar as it is hard to engage employee’s wider health needs if they are struggling with managing a budget or large household debts. (Fidelity, 2017[33]).
Some employers have thought carefully about how they can make adjustments to work which balances job quality, safety, well-being and flexibility. The willingness of some employers to design and implement workplace well-being initiatives which have clear operational and health benefits for both the business and the workforce illustrates that it is possible to promote well-being and productivity simultaneously. The case study featuring the Finnish manufacturer Lujatalo (Box 4.4), shows the benefits of a systematic approach to the analysis of risk exposure and the benefits of early interventions to make adjustments to job design.
Box 4.4. The benefits of early intervention to make adjustments to job design: Improving well‑being in Lujatalo, Finland
Lujatalo is a family-owned business in Finland. It designs, manufactures and builds innovative materials for commercial and residential construction developments. It employs 750 people and has been trading for more than 60 years. About half of Lujatalo’s workers are aged over 45. Because of the physically demanding nature of their work, continuing careers until the official retirement age is often challenging. Their workers typically suffer from musculoskeletal problems, and supervisory work is also associated with an increased mental workload and higher stress levels.
The company decided that measures to improve the sustainability of working life for all workers were needed. An early-intervention model with follow-up actions for those with reduced work ability was adopted. The interventions are carried out in cooperation with foremen, occupational health services and insurance companies, under the lead of the company’s head of health and well-being. Vocational rehabilitation is provided by Lujatalo, including work trials and retraining, such as retraining production workers with long experience to become foremen. Changing tasks or work content enables workers to continue their careers until they reach retirement. Of those workers facing early retirement from a physically demanding role, it is estimated that up to two‑thirds could be retained in the workplace through vocational rehabilitation. Ideas for easing the burden of physical work and improving safety are gathered in the Lujatalo databank. This electronic ergonomics databank will be made accessible to all employees via a smartphone app. Safety observations are collected with the Safety-App, which enables photos to be taken of observations to illustrate any shortcomings and is also particularly useful for foreign workers who may not speak Finnish. In addition, reporting has been incentivised by the company, with monthly rewards for reporters in the form of cinema tickets. Lujatalo also promotes safety during the commute to work by subsidising the cost of studded bicycle tyres for employees who cycle to work in icy conditions, an initiative that simultaneously encourages physical activity. Workers whose jobs put them under mental strain are supported and monitored with Firstbeat Lifestyle Assessment measurements, which help employees to recognise stress and identify areas for improvement (physical activity, nutrition, sleep).
Results: Lost-time injuries fell from 116 to 13.9 (per million working hours) between 2005 and 2015. The number of serious accidents resulting in more than 30 days’ absence has dropped to one or two per year, with the company aiming to reduce this to zero by 2020. Vocational rehabilitation, typically through retraining, has greatly reduced the costs associated with early retirement. In addition, a culture of prevention has been encouraged in the company, with the number of safety observations logged by employees growing from 18 in 2010 to 1 425 in 2015, partly because of the development of the Safety App.
The case study also illustrates how these measures can also accommodate the needs of older workers who may have specific needs for workplace adjustments. Indeed retaining older workers as the workforce ages is a big challenge for many employers. According to the European Health Interview Survey, older workers are more likely than younger workers to be living with multiple long-term conditions (Figure 4.8). Declining health is the main driver of older workers exiting the labour market before they reach state pension age (SPA) – and many people working with chronic conditions such as rheumatoid arthritis or MS frequently consider stopping work altogether because of their health. Thus, greater focus on chronic disease risk management will be critical, because a higher proportion of the working age population will have work‑limiting health conditions.
Figure 4.8. Tackling chronic illnesses will be critical as the workforce ages
Note: Comorbidity refers to the self-reported prevalence of at least two chronic diseases among the following: asthma; chronic bronchitis, chronic obstructive pulmonary disease, emphysema; myocardial infarction (heart attack) or chronic consequences of myocardial infarction; coronary heart disease or angina pectoris; high blood pressure (hypertension); stroke (cerebral haemorrhage, cerebral thrombosis) or chronic consequences of stroke; arthrosis (arthritis excluded); low back disorder or other chronic back defect; neck disorder or other chronic neck defect; diabetes; allergy (allergic asthma excluded); cirrhosis of the liver; urinary incontinence; kidney problems; and depression.
Source: European Health Interview Survey.
In another example, Siemens (Box 4.5) illustrates the benefits of taking a holistic approach to the promotion of well-being at work. The Siemens example illustrates that it is possible to develop support for the complex range of physical and emotional health needs of employees, whether these are attributable to work or not. They also apply to employees at different career and lifecycle stages and support behaviour and lifestyle changes if employees feel sufficiently empowered and motivated to engage. Another important aspect of the Siemens model is its emphasis on challenging stigma around mental illness and its sensitive approach to encouraging disclosure of mental health problems among employees.
Box 4.5. Case Study – Workplace health promotion in Siemens
Siemens is a German company, founded in 1847. It is the largest industrial manufacturing company in Europe, with a large operation in the United Kingdom employing 15 000 people and with revenue of GBP 6 billion in the last financial year. Its UK operation focuses on the areas of electrification and automation. It is very active in promoting the wider health, safety and well-being of its employees and has five “pillars” to its well-being strategy:
1. Physical activity – including programmes for exercise, sport and relaxation, strengthening motor skills and developing regenerative capabilities;
2. Healthy nutrition – promoting healthy eating through education, skills and personal motivation and by making healthy meals available on site;
3. Emotional well-being – supporting employees’ ability to manage change and work and non-work demands, and helping employees to interact well with others and to self-regulate their emotions and psychological well-being;
4. Healthy work environment – helping employees to work effectively in a suitable, well-designed and healthy physical work environment;
5. Medical care and assistance – clinical, ergonomic and occupational health support for prevention and early detection of health problems at work.
Employee engagement surveys among UK employees have previously indicated that some aspects of well-being – especially emotional well-being – required attention and more investment. The Head of Well-being has been working to promote and roll out this integrated approach across the UK business and most recently has been developing new interventions in the emotional well-being and mental health promotion. A core aim at Siemens UK is to put the mental health of employees on the same footing as their physical health. To do this the company has invested in a major programme of Stress Management and Resilience Training (SMART) which is available to all employees and managers through the company’s “learning campus”.
This training has an educational component (e.g. the biology and psychology of stress) and offers practical tools for employees to monitor their stress levels, build self-awareness, develop “active coping” and learn how to help others. In addition, employees have access to an Employee Assistance Programme (EAP) which offers a range of services including face-to-face counselling.
Results: More than 1 500 employees attended the SMART workshops in the 2017 financial year. 97% of participants said they would recommend attendance to a colleague and 90% reported that they felt better-equipped to manage stress and maintain their resilience. Efforts to improve the take-up of support services for employees with mental health challenges offered by the EAP have resulted in an increase in utilisation from 2‑3% to 10‑12%, which is high compared to other employers. The company is confident that considerable progress has also been made in the UK business to reduce the stigma surrounding mental illness, which has helped promote disclosure and take-up of a number of emotional well-being initiatives in the business.
Line managers have a crucial role in supporting employees with common mental health problems to remain in, or return to, work and they need effective skills development and training to enable them to do so. A recent 15‑country study by (Evans-Lacko and Knapp, 2018[34]) showed that, in the case of employees with depression, “when controlling for country GDP, working in an environment where managers felt comfortable to offer help and support to the employee rather than avoid them was independently associated with less absenteeism and more presenteeism”. As such, Siemens also offers learning modules for managers on how to manage teams in a way which avoids stress at work. The company also offers Mental Health First Aid training and, as part of its Stress and Mental Health Policy, is developing a mental health toolkit for managers which will include an Emotional Well-being Assessment Tool.
Key takeaways
There is compelling evidence that employers that can adapt and tailor the flexibility they offer to the changing needs of employees through the lifecycle are more able to attract, engage and retain a diverse workforce. This in turn can help respond to the changing needs of customers and clients.
Evidence suggests that practices to facilitate work-life balance through flexible working practices benefited carers and non-carers alike and can improve staff morale and retention. The COVID‑19 crisis has further emphasised the need to support workers with caring responsibilities.
Good practice to improve access to flexible working time arrangements can include better information and support to employees about their availability as well as setting an example at the senior level in their use. The latter can ensure that some group of workers feel secure to request flexible work without damaging their career prospects in the long-run.
Teleworking needs to be carefully designed to meet the needs of workers and employers and maximise worker well-being and productivity. This includes ensuring that workers have the instruments to work from home under good conditions as well as planning work organisation, in particular in the case of a second pandemic wave, and training the workforce to make the most of teleworking.
Simplifying procedures for introducing flexible working arrangements and engaging employers in the business case for flexible working can further support their implementation and take-up of FTWAs at the workplace.
Workplace health promotion initiatives such a smoking cessation programmes, exercise classes, healthy eating options in staff canteens and other “lifestyle” support interventions have become increasingly common as they are believed not only to improve attendance but also to improve hiring, motivation and retention. Despite these investments, the evidence that these programmes are effective in improving health and productivity is not strong.
High quality employers recognise the concept of “holistic” well-being, and are concerned for the physical, mental, and social lives of their workers. Thus well-being programmes which reflect a blend of financial, physical and social/emotional programmes need to be woven alongside other lifestyle and fitness interventions.
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