The economic recession which has swept across Europe has turned the spotlight on how companies treat their employees in a crisis. As enterprises look to reduce their costs by slimming down their workforces, should they instead be investing in the health of their employees to get a better return on their 'human capital'? Experiences from the European Network 'Enterprise for Health'.
Dr. Gregor Breucker and Dr. Viola Weber
The current economic downturn dominates our media and our lives. Last year’s growing realisation among insiders in our financial and political circles that certain activities and products were unsustainable has given way to
full-blown public awareness about the extent of the recession and its impact on the everyday lives of millions.
The G20 summit at the beginning of this year surprised many observers with a very explicit and alarming situation analysis delivered by the political leaders of the major economic nations. In the final communiqué, the heads of governments called the current crisis the largest challenge for the world economy in modern times, with consequences for the wealth and welfare of all citizens on the planet. They agreed the crisis would require a globally coordinated approach. This resulted in massive national economic stimulus programmes, with safeguards and rescue operations, not only for the banks but also for large-scale enterprises with key economic or political functions.
Neither the experts nor the political leaders can currently assess or guarantee whether these measures will actually have the desired effect. This is due to the fact that the consequences of the downturn are experienced quite differently depending on the economic sector. For instance the automobile, steel and mechanical engineering industries are reporting drastic financial losses, while certain other branches of commerce continue doing good business. The recession also means that jobs in some organisations traditionally regarded as ‘safe’ are now at risk due to enforced restructuring and redundancies.
While governments are massively expanding their fiscal policies to counteract the recession, many enterprises are employing the standard response to times of crisis - cost reduction and economizing their operations. Nothing new in that, one may think, but this time the downturn could go deeper and could last much longer.
Against this background, subjects such as health and education very quickly attract the attention of the cost-cutters. Expenditure which is not seen as urgent or necessary for the economic benefit of the organisation, is immediately put under the microscope, in the same way that companies cut travel budgets and make new appointments only if they are absolutely necessary.
Which begs the question whether workplace health promotion is only a "fair weather" topic. Is there an argument for investing in a modern personnel health policy aimed at promoting innovation and sustainability among workers at a time when powerful voices are advocating the traditional short-term cost reduction approach? This approach is at the heart of the campaign 'Neue Kultur der Arbeit' (new work culture) in Germany which was recently founded by the Berlin-based Federal Ministry for Labour and Social Affairs (BMAS).
Health Crisis Summit in Brussels
At the end of April a Health Crisis Summit was held in Brussels chaired by EU commissioner Androulla Vassiliou, who is responsible for the European health policy portfolio. Here, strategies were discussed to deal with the psychosocial consequences of the current crisis. The European health and socio-political leaders were especially worried about the growing social imbalances between the different European regions as well as within the member states. These imbalances also explain the increasingly disparate health profile within different sections of the European population.
As expected, the current crisis will enlarge the existing gap between the "haves" and "have nots", not just in health terms, but also in terms of the quality of the employment market, which could suffer to such an extent that the innovative capacity and competitiveness in Europe could deteriorate, leading to a "downward spiral". This would also mean that the ambitious goals of the member states to meet the challenges of globalisation through the European philosophy of connecting economic progress with social cohesion, would become more and more unrealistic. Does the recession thus mean therefore an end of the Lisbon Agenda, with its aim to make the EU "the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment by 2010? Leading national and international enterprise networks have been conducting an intensive exchange of experiences in order to find a way out of this dilemma.
European Network 'Enterprise for Health' (EfH)
One of these bodies is the European network 'Enterprise for Health' (EfH), which has been run by the BKK Bundesverband GbR (Federal Association of Company Health Insurance Funds) together with the Bertelsmann Stiftung since 2000.The EfH has been commissioning research and securing contributions from some of the world’s top academics and practitioners in the fields of health and employment. Currently, 24 international companies from the banking, oil, manufacturing, energy, pharmaceutical, steel and postal sectors in 12 countries, are members of the network, with representatives drawn from production, human resources, health promotion and other areas.
The EfH has assumed a pacemaker role, seeking to identify, develop and share best practice among European companies, encouraging them to put in place modern health policies and promote a culture based on partnership with their employees. This will not only benefit individuals, it will strengthen the competitiveness of the enterprises they work for and, ultimately, help relieve some of the growing burden on social security costs. The key thrust of EfH is the pooling of health promotion knowledge and experience, embracing prevention measures on the one hand and corporate culture and politics on the other. This is the basis of the partnership between the company health insurance funds, as the drivers of corporate health promotion, and the Bertelsmann Stiftung, which has been engaged in innovative approaches to the creation of a fair corporate culture for decades. Even though EfH members stem from different branches of industry, countries and cultures, the tasks and challenges they face are very similar.
Even before the current economic and financial crisis, a long-term agenda crystallised in the network with the following challenges for the organisational praxis:
Next to these central topics, Enterprise for Health has also focused on other important areas, among them work-life balance (the compatibility of job and other areas of life), diversity, flexible work as well as knowledge management and life-long learning. In an internal, cross-company and scientifically supported project group, EfH has developed recommendations for the adoption of health-relevant items in employee attitude survey instruments.
One of the central themes threaded through the network’s activities is the Business Case - the identification of the financial and other benefits of an employee-oriented health policy and organisational health promotion. This assumes even greater importance in the current crisis. Are the 'bottom-line return' arguments in favour of investment in health and corporate culture activities sufficiently strong to protect them from cost reduction strategies? How sustainable and "crisis-proof" are employee-oriented corporate policies including the corporate health policy?
This was one of the main topics of the EfH network meeting near Stockholm Sweden in May 2009, hosted by network member Scania, one of the world’s leading commercial vehicle manufacturers with 34,000 employees in 100 countries.
Like most international vehicle makers, Scania is suffering the effects of the economic downturn, but Thomas Karlsson, Senior Vice President Powertrain Production, made the company’s position very clear: 'Use the crisis as an opportunity'. He said Scania employees continued to represent their most important asset and every avenue was being pursued to maintain their personnel in the main production facilities. The concept used in Germany - reduced working hours in connection with supported further education programmes - is also implemented at Scania, however with one special feature: All further education programmes are conducted internally according to the Train-the-Trainer-principle, meaning the supervisors are personally conducting the training for their subordinate personnel who then pass on their knowledge and experience to the next organisational level down. "We are doing this, because we will reach our production goals, which are geared for expansion, with a better qualified workforce when this crisis is over", said Thomas Karlsson, when he explained the thinking behind the company’s chosen corporate strategy.
Scania is also investing heavily in the health of its employees. The company maintains an extensive internal health centre with a very versatile programme for the promotion of a healthy lifestyle. Employees are able to participate in comprehensive health training, which, on application by the individual, is financed by their local plant management. The operation and take-up of the scheme confirms that production managers consider health to be a valuable investment - even in times of economic crisis. Forward-thinking policies such as this also contributed to the obvious pride of Scania employees, despite the economic gloom.
Traditional management concepts in a crisis
According to the experiences of EfH, the Business Case for investment in health and corporate culture is essentially based on three key principles:
However, the number of corporate decision-makers who allow themselves to be guided by these maxims, is still very limited. The enterprises who are members of EfH agree that this is linked with traditional, basic principles of our economy - but, then again, so were the business models of corporate finance which have since proved to be anything but a firm foundation for our future prosperity. The logic behind the short-term view driving traditional management actions and the exclusive and one-sided concentration on cost reduction is therefore called into question.
These management principles, according to the discussion in the EfH-enterprise circle, are outmoded; they are the reason that employment is still considered purely as a cost factor and consequently, expenditure on health and operational education is also considered a financial overhead and not an investment. A sustainable and "healthy" corporate culture cannot be promoted under such conditions. Each crisis increases the drive to reduce costs and therefore limits or reduces measures and programmes for the promotion of health. This then closes the "vicious circle" and confirms already existing prejudices, according to which workplace health promotion programmes are only suitable in times of "fair weather" and are regarded as an opportunity for cost savings in difficult times.
The current crisis, in the view of Dr. Jürgen Pfister, Director of Corporate Human Resources at the METRO Group, one of the world’s biggest retailing enterprises with 290,000 workers in 150 countries, therefore also highlights a crisis in some traditional management concepts. The intangible assets such as engagement, motivation, health, customer orientation and qualification are central drivers for the performance of a corporation, but play only a subordinate role in the business valuation and control generally.
A second central theme closely connected to the current economic situation is "psycho-social health". The consequences of the downturn are manifest in the rise of unemployment and inevitably lead to considerable fear of imminent loss of work among many still employed. General changes in the working environment, such as work intensification and increasing psychological job demands prompted by the expansion of the service economy, increase the risks of psychological diseases and therefore increased costs. This not only raises major concerns for the social insurance system because of ill-health absenteeism, but means enterprises having to accept loss of productivity among employees who are in work but unable to perform to their full potential because of psychological stress (known as presenteeism).
Methods and instruments for recording work-related psychological stress and demands form another key topic at EfH network meetings, along with concepts such as reliable tools and measures for the reduction of stress and psychological diseases.
At the last EfH-conference, Prof. Dr. Peter Richter, occupational psychologist at the TU Dresden, presented an analysis and intervention programme for the prevention of psycho-social risks at the workplace as well as appropriate setting-related and behavioural interventions. Ava Fine of UK-based work2Health Ltd reported on the comprehensive 'Stress Management Standards' introduced by the country’s Health & Safety Executive (www.hse.gov.uk/stress/standards/). They include the assessment of psycho-social work risks which can be used as pointers for the improvement of leadership behaviour in an organisation.
Experiences within EfH show that the Business Case for health and corporate culture can today be included in the organisational reporting system via the integration of health-related performance figures. According to Prof. Dr. Holger Pfaff of the University of Cologne an important starting point is the integration of the 'health topic' into the general routine of employee attitude questionnaires. This makes health an important issue in a company and fosters a continual improvement process, which can promote health at the workplace.
Investment in health is always worthwhile
The evidence of a positive cost-benefit arising from health promotion (WHP) is long undisputed, especially in Anglo-American scientific literature, which support the view that individual corporate- and/or culture-specific differences have to be taken into account within a workplace. The so-called prospective Return on Investment (ROI), meaning the calculated and expected economical benefits of WHP-investments, represents a promising approach, which is also currently a focus in a project within the Health and Work ("Initiative Gesundheit und Arbeit" - IGA) initiative. It looks at the assessment of cost efficiency in the initial stages of prevention programmes, along with the practical application of different calculations. This is a promising instrument of persuasion and a decision support for the health insurances and WHP-professionals.
Prof. Dr. Dr. Rita Süssmuth, President of the EfH network, and the member organisations agree with the approach which can be summed up thus: "Especially at this time, one should not save at the wrong end". Despite difficult circumstances and restrictions to find solutions to combat the current crisis, companies need to maintain quality and employability among the workforce. Like Scania, other corporations are demonstrating that, with innovative solutions, they remain committed to improving the health of their workforce. The METRO Group, Unilever and the Allgemeine Hospitalgesellschaft (AHG) are among those who have implemented "Employee Assistance Programmes" - EAP.
This service enables all employees and their relatives to seek confidential counselling and help with concerns via external, contractually-bound professional service providers. Initially they receive advice via the telephone and, if required, personal counselling for any kind of problem. In addition, the "Family Service" provides support in matters of child care or care for relatives. Another EfH member, the Caixa Geral de Depósitos, Portugal’s largest bank based in Lisbon, arranges psychosocial crisis intervention for branch employees who suffer a trauma. As an early intervention, it effectively combats post-traumatic stress disorders.
In conclusion, investment in health pays dividends. The well-being of employees is not a luxury for good times only, but should be an inherent part of ongoing corporate policy. Successful concepts and practical action approaches are available. It may not be an easy time to effect changes in the value orientation of commercial enterprises, but it is just the right time to make sure we come out of this crisis stronger. This crucial topic will occupy the attention of Enterprise for Health going forward.