Effective corporate health management reduces sick leave by up to 40%

• Working time lost due to illness costs German companies around EUR 60 billion every year
• Demographic change means the workforce is becoming older; health risks are on the rise
• Already today, around 28% of the working population retire early for health reasons
• Effective corporate health management helps improve the working conditions of employees and reduce sick leave by up to 40%
• 80% of German companies think corporate health management is necessary, but only a third of them have it

Due to demographic change and the higher retirement age, the average age of people working in German companies is on the rise. Common illnesses occur ever more often in professional life, and absence from work for health reasons is increasing accordingly. Days lost through sick leave already cost German companies around EUR 60 billion, and this figure is rising. To counteract this phenomenon, companies should have their own corporate health management. Better, lower-stress working conditions and the right preventative healthcare can reduce staff absenteeism by up to 40%. Around 80% of German companies have recognized the benefits, and yet only one-third (36%) of them take their own sickness prevention action. These are the conclusions reached by a new publication from the think: act CONTENT series by Roland Berger Strategy Consultants entitled "Investing in corporate health management yields multiple returns".

"German companies can no longer afford to lose around EUR 60 billion dollars a year due to health-related absenteeism, because it makes them less competitive," says study author Maren Hauptmann of Roland Berger Strategy Consultants. "As the average age of their staff increases, companies will have to invest more in their employees' health in the future."

German workforce becoming older

Already today, more than a quarter of German workers (27.8%) retire early for health reasons. It is a trend that will probably exacerbate in the coming years, Hauptmann explains: "Demographic change and the rising retirement age in Germany will mean that the average staff age in companies will rise – and with it the risk of illness and other stress factors at the workplace."

While today around 30% of the workforce in Germany is aged between 50 and 64, this figure will be 40% by 2050. This will mean that companies are faced with more working time lost for health reasons among their staff. Focused corporate health management helps not only cut costs significantly, but also to keep older, and hence more experienced, employees in the company. "When older employees can't work for longer periods or leave the company prematurely for health reasons, the company loses highly experienced personnel. And that can have a very negative effect on that company's business," says Hauptmann.

Company health management improves efficiency

Focused corporate health management helps to reduce absenteeism. This can include offering health-promoting programs together with health insurance companies and other external partners to prevent particular health problems. Sport offerings and nutrition programs in company canteens can also help improve the feeling of well-being among employees.

But it's about more than just that: "Stress factors such as mobbing, tight schedules, excessive overtime and conflicts with colleagues and superiors are a burden on many employees, and they cause illness as well," Maren Hauptmann says. "Often factors like these have a negative effect on the quality of the work done by these employees." This can lead to companies losing up to 15% of their output. To avoid this, they should act to foster the productivity of their employees, identify and actively tackle problems at the workplace.

Few companies have corresponding programs

But although more than 80% of German companies recognize the benefits of corporate health management, only one-third (36%) of them actually take action. One of the main reasons for this is the difficulty in quantifying the related cost: "Many companies cannot really estimate the costs and benefits of health management. That stops them investing in it," says Hauptmann.

Corporate health management also requires the support of the top management: Only when the executive level of a company sees a sense of well-being among its employees as a priority can programs be realized to promote staff health. Often companies do not have the required expertise and human resources to offer such programs. "Partnerships with external providers, health insurers and health experts can therefore be an ideal solution for many companies. Because investing in the long-term productivity of your employees definitely pays," Maren Hauptmann concludes.