Investing in employee health could create US$11.7 trillion in global economic value, according to a new report – Thriving workplaces: How employers can improve productivity and change lives – from the McKinsey Health Institute.

Produced in collaboration with the World Economic Forum and published for Davos 2025, the report says organisations that prioritise employee health and wellbeing see marked improvements in productivity, reduced absenteeism, lower healthcare costs and heightened employee engagement and retention. A healthy workforce is also more resilient and adaptable.

Research from the University of Oxford shows a direct correlation between employee wellbeing and an organisation’s financial success. A one-point increase in employee happiness scores was shown to be associated with between US$1.39 billion and US$2.29 billion increase in annual profits.

Wellbeing factors such as work-life balance and job satisfaction are proven to be as strong an incentive as salary, especially for Gen Z and those with lower mental health scores.

Investors are also increasingly paying attention to how companies manage employee health and wellbeing. Organisations listed on benchmarks such as the S&P 500 index are now assessed on job satisfaction, happiness, stress and purpose at work, as well as the more usual financial metrics.

The issues
More than 30,000 employees worldwide were surveyed and only 57 per cent reported good holistic health (defined as mental, physical, spiritual and social).

Employees who are women, LGBTQI+, younger, neurodivergent, lower education levels or poor financial status tend to report poorer employee health outcomes and these groups make up 80 per cent of the sample.

This underscores the need for tailored interventions to address and prevent health challenges and tackle workplace factors that contribute to them. For example, improving access to treatments for menopause and endometriosis alone would give an annual boost of $130 billion to the global economy by 2040.

Making LGBTQI+ individuals feel fully included can boost their wellbeing. Understanding and accommodating the strengths and needs of neurodivergent workers could boost their capacity for innovation and their holistic health.

Rather than solely addressing poor health, the report says promoting good health is also necessary and since 3.5 billion working adults spend around 45 years at work, the workplace has the potential to make a profound impact on health. As burnout increases to one in four people, not taking action will lead to a sicker, unhappier and less productive workforce.

Non-communicable diseases (NCDs) account for 69 per cent of today’s global disease burden. In the next 15 years the disease categories predicted to rise the most are NCDs with age-related diseases, such as kidney disease.

In the US, cardiovascular disease leads to the loss of US$156 billion in productivity annually. US employees with untreated insomnia cost employers approximately US$2,280 a year more than those without sleep issues, due to absenteeism, presenteeism, diminished performance and higher rates of accidents and injuries.

The rise of remote working has blurred the lines between personal and professional life, creating a workplace culture that can enhance or harm employees’ wellbeing and productivity.

Other impacts
Remuneration is positively correlated with holistic health. Only 41 per cent of individuals with poor financial status reported good holistic health compared to 76 per cent of those with good financial health. Those with low financial stability also reported 30 per cent more burnout symptoms (70 per cent versus 40 per cent).

Job insecurity also impacted mental health (depression, anxiety, burnout) and physical health (back pain, headaches and high blood pressure.)

Upper management is a blessing and a curse. The top three factors associated with positive holistic health for managers are self-efficacy, meaning and belonging. For non-managers the top three are self-efficacy, adaptability and belonging.

Globally, 10 per cent of employees are caring for someone with a mental or physical illness in addition to their paid jobs. Although caregivers are 17 per cent more likely to experience burnout driven by exhaustion, they are also more likely to report higher holistic health (61 per cent versus the global average of 57 per cent) due to better social and spiritual health.

Employers also need to prepare for an older workforce: by 2050 about 30 per cent of the global workforce will be over 50-years-old. Governments may rethink retirement age and pensions in response.

The solution
There is no one size fits all solution and leaders must address all the varying needs of different groups to develop targeted interventions to enhance holistic health and reduce burnout.

Effective interventions include support from psychologists to train employees in wellbeing tools to reduce stress, wellbeing workshops, encouraging movement breaks, offering yoga classes, wellness days, awareness campaigns and access to meditation apps.

The report recommends conducting health checks first to get a baseline of health and wellbeing levels. Develop a long-term sustainable strategy with evidence-based interventions. Set up pilots and refine strategies to ensure the most effective interventions are scaled. Track three to five metrics to measure success. Appoint a senior executive as a role model and embed a healthy mindset into the culture of the organisation. This requires continuous engagement, regular evaluation and flexible interventions to meet needs.

The ideal portfolio of interventions addresses immediate needs, root causes and includes a mix of interventions designed to help individuals and teams, reshape jobs and change the organisation.

Best practice
In response to employee feedback, IKEA Canada introduced Wellness Days allowing employees to take up to 12 days a year for a variety of reasons such as supporting a family member with illness, participating at a community event, volunteering for a not-for-profit, self care or spending time with a new pet. It also partnered with Mental Health Commission of Canada to introduce a training and digital platform that develops self-care, self-leadership, resilience and mindfulness practice. Employee turnover reduced from 35 to 24.5 per cent.

Health insurance company, Vitality, introduced health checks, mental health counselling, mental health awareness training, lunchtime leadership walks and medical support. Results included a 50 per cent reduction in presenteeism, 28 per cent few absences and those who were off sick took 46 per cent less time to recover.

Download the full report here.