Business Case

Why Invest in a Corporate Culture Based on Partnership and Company Health Policy?


It is undisputed that a corporate culture based on partnership and company health policy make important contributions towards achieving a company's economic objectives.

This is verified by scientific data from various fields of research. However, what has so far been missing is a link and integration of this information as well as a translation into "corporate language". How can the so-called business case be described?

During its discussion of the various scientific approaches and on the basis of the experience shared by the Enterprise for Health (EfH) network, it became clear that it was necessary to process the available information which was scattered and incoherent in a systematic and practice-oriented way.


3 reasons why a corporate culture pays off:

Today, there is already a consensus in the network group on the reasons which justify investments in a corporate culture based on partnership and a company health policy. The member companies make these investments because

  • they share and support the values of a health-related corporate culture based on partnership,
  • the effects of the social and demographic development call for a corporate culture oriented towards participation and health - especially with a view to the effects on the labour markets,
  • they can improve productivity and growth as a result and develop sustainable customer relations.

 

Driving business excellence through corporate culture and health

EfH companies are convinced that there is a strong need for a new direction in the development of business strategy which can be best described by the notion of a healthy organisation. A healthy organisation is defined as one whose culture, management, working climate and other business practices create an environment that promotes the health, effectiveness and performance of its employees. Healthy organisations are financially successful and have healthy workforces. Healthy organisations are able to balance economic performance goals with employee health and wellness goals and can adapt the balance within the context of a continuously changing economic and social environment.

This conviction is driven by commonly shared values and both practical and scientific evidence. This central value is expressed by EfH’s commonly shared belief that the quality in work including the human capital is THE decisive factor for the economic and social success of our companies and society at large.

Practical experience and research evidence clearly show that both employee health, economic growth and productivity can be improved by tackling the critical factors, which means making changes to job design, production systems, organisational systems, human resource management practice and the overall corporate culture.


Values which matter: Driving socially responsible leadership

EfH member companies share a set of fundamental beliefs which drive action in the field of corporate culture and corporate health. These beliefs are reflected in the individual values of member companies.

Successful leadership today needs a clear value base which provides direction and offers a sense of coherence to all stakeholders. The key value is centered in the belief that social cohesion and successful economic performance need each other. This includes all levels of action: enterprises, local communities, countries and supra-national regions like the European Union. This value base leads to different views on the role of human resources, management practices and corporate culture: they become critical fields for investment which help ensure the necessary flexibility and capabilities to manage change and  continuously adapt to new environments.


Social, demographic and technological changes to the world of work


Addressing the challenge of an ageing workforce
Workforce Ageing is one of the most powerful trends in all developed economies and societies around the globe. Apart from the impacts of the demographic pressures on our social welfare systems, there is no doubt that economic performance will more and more depend on the capability of management to actively involve an increasing group of older employees. Therefore, employers need to recognize the strategic role of the quality of jobs and work environments which must respond to these demographic changes. Workplace health, as an important ingredient of work quality, thus becomes a fundamental basis on which to recruit, develop and retain workers.

Technological change
The technological change primarily results from the transition from the industrial society to the information or knowledge society. Information and knowledge are becoming the critical success factors in addition to the raw materials and the financial resources. Therefore, the purchasing, processing and refining of information will mainly dominate the future world of work. The number of workers in knowledge-intensive services is rising continuously whereas employment in manufacturing and production is falling and will continue to do so. The technological basis of this change is the continuing penetration of the world or work by the various applications of information and communication technologies. Digitisation, miniaturisation (even smaller terminals) and multifunctional, integrated applications are becoming the basis for new, more flexible and decentralised work structures. Even today the knowledge lead for many companies is their most important competitive advantage. Research and development, lifelong learning and, in general, a continuous co-ordination and further development of the organisation itself, its technology and human resources, are becoming the crucial fields of action in increasing competitiveness for many enterprises.



Driving economic growth and productivity: Reducing costs of ill-health and poor work quality (contribution to the stakeholder value)


Poor work quality and unhealthy work environments cause substantial, preventable costs to business. People who are ill and need to stay away from work because of an unhealthy work environment need to make use of health care services and thus contribute to the general health care costs. Depending on the financing of the national health care system employers either directly or indirectly (i.e. as part of a social insurance contribution or as part of the tax system) cover these costs or parts of them.

Ill-health and work related absenteeism also cause a loss of output and in most cases require additional expenditure to manage replacement in order to ensure undisturbed production and/or service delivery. They also frequently lead to increased costs due to wage compensation.

Far more important, however, are costs linked to those people who are at work but perform at lower efficiency rates due to work-related health problems. These are "hidden" costs and substantially impact on productivity and performance.

Moreover both cases lead to additional financial burdens on the social welfare systems which in most cases are co-financed through employers (tax based or based on contributions to social insurance systems). The increase in public expenditure due to unhealthy work environments reduces the general investment capability of the public system and thus undermines the quality of the public infrastructure, which in turn deteriorates the economic framework conditions for economic growth and development.

EfH member companies confirm the mounting evidence that those corporate strategies and management practices, which strengthen workplace partnership and health, actually produce significant cost savings and even result in a positive return on investment.

Improving productivity, innovation and growth
Future competitive advantages will be based on management strategies and organisational practices that ensure an efficient development of knowledge and the use thereof. In particular, corporate values and human resource management practices that encourage employee involvement are central to high performance workplaces. Evidence confirms that employee involvement (i. e. self-directed work teams, flexible job design, continuous training, profit- and gainsharing) improves productivity in the range of two percent to five percent. Knowledge development and knowledge use highly depend on a general learning culture, which in turn requires investment in healthy work environments.

High performance workplaces ensure that people are enabled to get involved in continuous learning proactively. Work intensification – and its impact on the level of stress and health – is known to be the most important barrier to implementing a learning culture in many businesses. In particular, highly educated professionals, technical workers, managers and other knowledge workers, who are regarded as the most strategic contributors to innovation and productivity improvements yet who are simultaneously affected by high levels of job stress and work intensification, require a high level of work quality, which in turn includes a healthy work environment.


Efficient processes, satisfied employees, customers, shareholders and public stakeholders
The shareholder value principle needs to be complemented by a human resource value and social responsibility perspective. There is strong evidence, based on both research and daily business practice, that sustainable economic success is driven along the employee-customer-profit-chain. Satisfied and committed employees serve satisfied and loyal customers, which in turn pays off and ensures a financially stable performance. One of the keys to initiate this chain is linked to the principles of fairness and trust. Employees who feel treated in a fair and trustful way will commit themselves to achieve business targets thus building up a continuous success cycle.

The link between workers and customers is formed by process optimisation.
Programmes which tackle the fields of action "Work-Life Balance", "Ageing Workforce", "Diversity", "Flexible Work", "Knowledge Management and Lifelong Learning" and "Healthy Lifestyle" improve

  • the employees' work motivation,
  • their deployment flexibility,
  • their identification with the company,
  • their general willingness to perform,
  • their own initiative to improve workflows and environmental conditions,
  • creativity with respect to product and service improvements.

With these effects on the workers their contribution can be increased especially in the critical value added processes through

  • improved planning capability of the processes as a result of lower sickness rates and reduced staff turnover,
  • shorter development times for products and services,
  • reduced likelihood of faults or errors.

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