“According to the Mayo Clinic, the person you report to at work is more important for your health than your family doctor.”
—BOB CHAPMAN, CEO of Barry-Wehmiller and author of Everybody Matters
THE HEADLINES—AND THE DATA—TELL the tale. An Uber software engineer making $170,000 a year, Joseph Thomas, committed suicide in August 2016, by shooting himself. His father and his wife blamed workplace stress. “He worked long hours . . . he felt immense pressure and stress at work, and was scared he’d lose his job. . . . He became someone with very little confidence in himself. . . . He was saying he couldn’t do anything right.”1 Mr. Thomas was not an isolated case, with Uber employees attributing “panic attacks, substance abuse, depression, and hospitalizations to the stress of the job.”2
Workplace stress and its health consequences affect people everywhere. Between January 2008 and the spring of 2010, at least forty-six employees of France Telecom committed suicide, with observers pointing to cost-cutting and reorganizations as the cause.3 In just the four months between January and May 2010, nine employees at Foxconn, the large electronics manufacturer in China that supplies Apple and HP, among many others, killed themselves, and two other workers were injured in suicide attempts.4 The presumptive cause, according to employees, was the working conditions at Foxconn.
Moritz Erhardt, a twenty-one-year-old Merrill Lynch (part of Bank of America) intern, collapsed and died in London after working for seventy-two hours—three days—straight. The coroner’s report said that Erhardt died “as the result of an epileptic fit that may have been triggered by stress and fatigue.”5 Watami Food Service in Japan was “accused of driving a new female employee to suicide just two months after joining the company . . . the woman’s monthly overtime work exceeded 140 hours.”6 Severe economic problems in the agricultural industry in India resulted in almost two hundred thousand farmers committing suicide between 2007 and 2009 because of “rising debt and resulting economic and existential despair.”7
The consequences of workplace stress cut across countries, specific jobs, and organizational levels. A Chicago commuter train director being investigated for an unauthorized vacation payout stepped in front of a train and killed himself. A Maryland lawyer who discovered he was about to lose his job died from a self-inflicted gunshot wound. In 2008, as employment insecurity and stress from the severe recession increased, US workplace suicides reached their highest level ever.8
Some of the most problematic, stress-causing aspects of work environments include low wages, shift work, and the absence of job control. For example, low wages produce stress from having to survive with little income, and inadequate income impairs access to health-care services. Not surprisingly, a number of research studies find that low wages predict obesity, anxiety and depression, low birth weights, and hypertension.9
Many of these problematic job attributes affect primarily lower-level employees. However, professional and C-Suite executives are scarcely immune to the effects of poor working conditions on their health and well-being. For instance, “Swisscom CEO Carsten Schloter, 49, had trouble with being on call 24-7. Pierre Wauthier, 53, CFO at Zurich Insurance Group, was in the middle of a horrendous conflict with his CEO.” Both men committed suicide in 2013.10
Some people facing difficult workplace conditions get sick or die. Some people confronting toxic workplaces kill themselves. Some individuals facing intolerable workplace stress kill others. In June 2017, a former employee who had been fired from his job at Fiamma, a business that makes awnings and other accessories for recreational vehicles, arrived at his former employer and systematically tracked down and killed five people before he committed suicide.11 Such instances are all too common. In 1986, a mail carrier murdered fourteen coworkers and wounded six others—thereby prompting the phrase “going postal.”12
In 2013, 397 people were murdered at work in the United States. The presumably good news: that number was down from the 475 work-related homicides reported in 2012. Between 1992 and 2010, there were almost fourteen thousand workplace homicide victims.13 The number of people killed in work-related violence while at the workplace is “more than were killed by fires and explosions, getting caught in equipment or machinery and exposure to harmful substances combined.”14 Of course, killings are the most severe and dramatic form of workplace violence. The Occupational Safety and Health Administration estimates that some two million employees per year are victims of workplace violence, with many instances going unreported. Clearly, workplace violence is a serious health risk.
People, particularly educated, skilled people, often surprise themselves by their reactions to stressful work environments. A self-described “recovering banker” in South Africa wrote to me about “falling off the corporate hamster wheel” and slipping into a severe clinical depression, something that two business school degrees and numerous leadership training programs had scarcely prepared him for. The whole experience took him by surprise:
I ignorantly and arrogantly thought that depression didn’t happen to people who were “successful,” with a good job, house in the suburbs, station wagon, and so on. I never returned to work after my breakdown, but as part of my recovery process, embarked on a master’s degree in Applied Psychology, developed a stress symptom survey, and wrote a book about my experience. Data from some 2,500 white-collar employees uncovered that all organizations we have surveyed are displaying worrying levels of symptomology that is impacting all key business areas.
Similarly, a Salesforce.com employee in San Francisco, someone with a business degree from a very prestigious school, told me that when she joined the organization in a management role, she almost immediately had to go on antidepressants to cope with the work environment. Over the years, she has relied on psychotherapy, a career coach, occasional weekends away, a supportive spouse, and massages among other things to help her handle a workplace in which the demands from her various bosses, long working hours, and the threat of being fired at any moment for any performance slipup or political miscue are omnipresent.
Like many “successful” people working in high technology, she doesn’t have that much control over her job and her life. Many months pregnant with her first child, she learned on a Thursday that she needed to miss a social engagement on that Saturday so she could be on a flight to Paris to arrive on Sunday for a Monday meeting. This is just one example of an ever-changing schedule and job demands that leave her feeling not in control of her environment. Her coping strategies, all of which are expensive—the total cost for the therapists, the personal trainer, and others undoubtedly exceeds $2,000 a month—are possible only because she and her spouse have excellent educations and good jobs. How do the majority of workers, whose salaries don’t top the charts, cope with similar workplace stress?
Her experience is scarcely unique, even within Salesforce, a company currently on Fortune’s Best Places to Work list. A colleague of hers who had recently delivered a child and was ostensibly on maternity leave felt pressured to return to work less than two weeks after giving birth so she could present a keynote speech at a major Salesforce event. Naturally enough, the request to come back into work was posed as a compliment: “You have this big role at this important, high-visibility meeting, so you should be flattered to be invited and certainly not miss the opportunity to shine in front of the Salesforce brass and the many attendees.” The not-so-implicit message: What’s wrong with you that your job doesn’t come before even your newborn?
Both individuals have contemplated leaving their jobs. That fact demonstrates that difficult bosses and stressful work environments harm not only people’s health: toxic workplaces are also an important cause of turnover, job dissatisfaction, and other forms of productivity loss for organizations.
Systematic data buttress the scores of case examples I uncovered in my research. There is the so-called Black Monday Syndrome, the fact that more people have heart attacks on Monday morning than at other times during the week, maybe because they are back at work after the weekend. The prevalence of heart attacks on Monday morning has caused hospitals to staff emergency rooms to correspond to the increased risk.15
The aptly named American Institute of Stress has collated numerous studies of stress. Some highlights from these data:
One report by the National Institute for Occupational Safety and Health “included data showing that one-quarter of employees view their jobs as the major stressor in their lives and that problems at work are more strongly associated with health complaints than any other stressor, including financial or family problems.”17
Work environments are for the most part the same in other countries—also frequently too stress-inducing. An annual national survey measuring stress in Australia found that in 2014, 45 percent of Australians “reported being stressed out about work,” that in 2013, stress was having at least some impact on the physical health of about three-quarters of Australians, and that workplace stress was at a two-year high.18 A 2012 Statistics Canada survey showed that 28.4 percent of Canadians found most work days to be either quite a bit or extremely stressful.19 And a report in the United Kingdom concluded: “The evidence is overwhelming that work-related mental ill-health is a major problem in our society with substantial economic, commercial, and human costs.”20
The Gig Economy and Workplace Stress
The evidence suggests that the adverse effects of work environments on people’s health may be getting worse. One reason is the changing nature of work and specifically the rising prevalence of precarious employment—the contract and freelance work of the so-called gig economy. Some forecasts predict that by 2020, “40 percent of the US workforce will be so-called contingent workers.”21 In 2015, the Freelancers Union noted that one-third of working Americans had engaged in some freelance work during the past year.
People working on short-term contracts confront more economic uncertainty and insecurity, and they seldom receive paid time off or other benefits, including training. While many people who perform “gigs” are doing it to supplement their income, data suggest that sharing economy workers don’t make very much money. A chart in Fortune reported that the average monthly income was $229 for people working for DoorDash, $364 for Uber drivers, $377 for Lyft, and $380 for TaskRabbit. People working for Fiverr made on average just $103 in a month and $98 for Getaround.22
A New Yorker article quoted platform economy companies’ own websites and blogs to make the point of how stressful and difficult such working arrangements are. One Lyft driver in Chicago was praised for picking up a passenger while nine months pregnant and finishing the trip as she went into labor. Lyft drivers net about eleven dollars per trip, so “maybe Mary kept accepting riders because the gig economy has further normalized the circumstances in which earning an extra eleven dollars can feel more important than seeking out the urgent medical care that these quasi-employers do not sponsor.” Fiverr, which touts itself as the freelance marketplace for the lean entrepreneur, apparently had an ad campaign on New York City subway cars that advocated eating coffee for lunch and noting that “sleep deprivation is your drug of choice” if you are a “doer.” A Fiverr video recommended answering “a call from a client while having sex.”23
Beyond the horrific stories, there is ample systematic evidence showing the adverse effects of insecure, often contingent employment on people’s health and well-being. For instance, one review of ninety-three studies of precarious employment in industrialized countries “found precarious employment was associated with a deterioration in occupational health and safety . . . in terms of injury rates, disease risk, hazard exposures, or worker (and manager) knowledge of OHS [occupational health and safety] regulatory responsibilities.”24
Management and Government Neglect of Workplace Stress and Its Costs
Notwithstanding the prevalence of workplace stress and its documented ill-effects on physical and mental health, strangely—and unfortunately—the workplace and its effects on social sustainability and health remain mostly under the radar. Workplace stress is largely ignored by employers, governments, and, yes, business schools, too, notwithstanding an enormous epidemiological literature on the effects of workplace conditions on physical and mental health25 with an enormous toll in both health-care costs and population mortality that I describe in Chapter 2. Chris Till, the former chief executive of the Human Resources Institute of New Zealand, told me that when he talked to the New Zealand government about the connection between workplace conditions and population health, the response was, “Stress is just a normal part of work,” with the implication being that nothing could or would be done. Till noted that the government has not yet figured out that workplace injury consisted of more than dramatic physical injuries or accidents—that chronic stress and exposure to management practices that adversely affect health causes both physical and mental health problems and imposes costs borne by business and society.
Dame Carol Black, a principal in Newnham College at Cambridge University, told me that in 2011, she and Professor Sir Cary Cooper, a noted organizational psychologist, conducted a quick survey of more than one hundred UK business schools to assess whether they included teaching on health, employee engagement, and well-being in any of their courses. They found that the answer to this question was “a resounding no.”26 Nor is the situation much different inside employers, with a very small fraction of organizations measuring workplace-related stress and an even tinier proportion trying to address the problem.
Christy Johnson, a Stanford MBA graduate who is the founder and CEO of strategy consulting firm Artemis Connection, has been interested in the people aspect of strategy implementation. She commented to me on “the striking resistance to getting people to be honest about what’s going on with their workforce.” When I pushed back on that comment and asked her about the activities of HR departments and the employee surveys that many places conducted, her response was that these activities were mostly about compliance with rules and legal regulations and risk management—not getting sued—and that many places did not do much with the survey data they collected.
One notable exception to the neglect of systematically measuring workplace-induced health and well-being is the Gallup-Healthways national surveys of well-being, data that, along with Gallup’s research expertise, has brought attention to well-being, employee health, engagement, and company performance. But note that Gallup’s results are reported by geographic area, not by specific company—so there is no spotlight on specific workplaces that are doing particularly well or poorly. Moreover, Gallup reported that “only 12 percent of employees strongly agree that they have substantially higher overall well-being because of their employer.”27
It Doesn’t Have to Be This Way
Of course there are exceptions, albeit not enough of them. Some companies demonstrate that it is both possible and profitable to care for people’s physical and mental health and overall well-being.
In 2004, Mark Bertolini, currently the CEO of health insurance company Aetna, suffered a severe skiing accident that almost killed him and left his left arm in constant agonizing pain. That, plus a son dealing with a rare cancer, caused him to get more interested in health as well as in alternative therapies. Aetna has made employee health a priority, with a focus on physical, mental, social, and financial health.28 In 2015, Aetna increased its internal minimum wage to sixteen dollars per hour, which was a 33 percent increase for the company’s lowest paid employees. About 5,700 people saw their wages increase. The company also changed its health benefits to reduce employees’ out-of-pocket expenses. The company offers free yoga and meditation classes that about one-quarter of the workforce has participated in. People who have taken at least one class “report, on average, a 28 percent reduction in their stress levels, a 20 percent improvement in sleep quality, and a 19 percent reduction in pain. They also become more effective on the job.”29 The company also offers a weight loss program and health screenings for its employees. In 2016, Aetna launched a student loan repayment program under which it will make matching loan payment contributions up to $2,000 per year. At Aetna, health-care costs have either gone down or, some years, gone up less than the national average—possibly because of the company’s focus on employee well-being.
Bob Chapman is the CEO of Barry-Wehmiller, a $2.5 billion manufacturing company with about twelve thousand people working in plants all over the world. One day a number of years ago, Chapman had an insight that he explained to me: “We became aware that all twelve thousand people who work for us are somebody’s precious child, and we know that the way we treat them will have a material impact on their life.” Chapman decided that the goal of the company should be to send people home fulfilled at the end of the workday. When the company began seeing employees not as objects but as people who are precious to others, they built a culture in which people cared for one another. One consequence: a much higher level of altruism “where people genuinely offered to do things for others without expecting anything in return.” The company has been quite financially successful, with a compound growth rate in earnings of about 16 percent per year, even though it operates in very difficult manufacturing industry segments.
Chapman is now an evangelist for this way of thinking, having written a book, Everybody Matters,30 and going around giving talks about the Barry-Wehmiller approach and its journey to building a culture focused on employee well-being. He commented, “Eighty-eight percent of all people in this country feel they work for an organization that does not care about them. Three out of four people are disengaged. We know for a fact that when people do not feel valued, when they do not feel like they work in a good environment, there are consequences. I think there’s something like a 40 percent reduction in health-related issues when people feel happy in their work compared to feeling stressed.”
In this book, we will meet some of the companies that do care about their people’s well-being, and we will also review numerous research studies (and books) that speak to the economic and social rationales for taking care of employees.31 It is possible to do well and to do good at the same time. But the data on work stress, employee health, and employee engagement suggest that many more company leaders need to get—and heed—the message.
WHERE ARE THE PEOPLE IN THE SUSTAINABILITY MOVEMENT?
Sometimes even the most mundane actions and decisions reveal a lot about existing social values and priorities. So while economic development and land use decisions have many—some argue too many and too onerous—requirements for preserving the physical environment, such regulatory oversight invariably mostly ignores the well-being of the employees who may be affected.
A simple example. When in 2010, Safeway, the large grocery store chain, sought to expand its store in Burlingame, California, near where I live, the company filed an environmental impact report open to the public’s inspection. EIRs are of course required for any significant building or redevelopment projects. The report detailed the effects of the store expansion and construction on traffic patterns and congestion, outlined the landscaping and signage plans to preserve as much aesthetics as possible, and highlighted the many things that the company and its contractors would do, such as recycling waste from the demolition of the old structure, to minimize the environmental impact of the project.
There was, of course, nothing unusual about this report—one of hundreds of thousands filed each year. The fundamental premise behind such environmental reviews is simple: building anything invariably disturbs aspects of the physical environment, and good stewardship requires that companies take care to minimize the physical disruption and conserve and preserve as much as possible of the natural environment while still permitting economic progress and development to occur. Should such building or remodeling entail the significant modification or destruction of structures deemed to be of historical significance, the burdens placed on the project are correspondingly higher and the requirements for preservation all the greater. In addition, filing such reports and going through environmental reviews prior to construction recognizes the fact that it is easier to prevent harm than it is to subsequently remedy possible adverse impacts to the physical environment or historically significant buildings or gardens once damage has occurred.
It has become taken for granted that in the case of the physical environment, we are concerned about sustainability and environmental degradation. Laws and regulations preclude and punish activities that foul the air or dirty the water. Many companies trumpet their “green” credentials in their advertising, annual reports, and other messaging. They detail their actions to offset carbon emissions and mitigate other forms of environmental danger. These practices have become such a part of everyday business conduct that people often forget there was a time not that long ago when environmental regulations were vigorously opposed and many fewer businesses had made environmental sustainability an important part of their branding, targeted at both their customers and employees.
At first glance, nothing seems missing from the Safeway EIR, which is, because of the limited scope of the project—just replacing some existing buildings in an already developed commercial area—quite boring to read. But something is missing from consideration of the store remodeling’s impact. The store would be closed slightly more than a year during its reconstruction. The existing store had scores of employees. This store closing occurred in 2010, during a time of economic stringency as the US job market slowly recovered from a severe recession. So while Safeway would remove trees and temporarily disrupt traffic and parking during construction, all factors addressed in its EIR, the company’s actions would also affect the economic well-being and lives of its employees, something not discussed anywhere in its environmental impact statement. Although as it turned out Safeway did offer transfers to nearby stores to at least some of its employees, there is no mention of this in the EIR, no mention of what would happen to the other employees, no mention, in short, of the human impact of this relatively routine act of economic development.
Nor is this case unusual. The European Union risked a trade war with the United States by seeking to force airlines, including those from countries outside the European Union, to pay for the carbon pollution created by flights into and within Europe.32 Meanwhile, the European Union apparently was unconcerned about whether or not those same airlines, such as United, Delta, and American, had already reduced and continued to cut wages, jobs, and pensions, thereby negatively affecting the human environment and the psychological and physical well-being of their employees.
Want more evidence of this neglect of people in the sustainability reporting movement? If you go to the website where automobile manufacturer General Motors presents its sustainability bona fides, you can learn that GM is number one in clean energy patents, is among the top five in the world in the number of solar arrays hosted, has eleven landfill-free sites, and operates in twenty-six sites certified by the Wildlife Habitat Council.33 What you won’t learn is the number of jobs the company has cut over the past decade, what GM has done to reduce wages and benefits for new and experienced employees, and how the company manages its office and plant work environments in ways that affect people’s well-being. Nor does General Motors in its sustainability reporting present data on the aggregate physical and mental health of its current or former employees.
Similarly, Walmart, the largest employer in the United States with more than one million employees, has three environmental sustainability goals that cover energy, waste, and products.34 The company’s global responsibility reporting emphasizes renewable energy and emergency preparedness, among other things. When the report speaks to measures pertaining to people, the focus is on the number of associates promoted, the proportion of new hires that were women and people of color, and the company’s record of hiring veterans.35 No mention of providing wages that people can live on, health insurance so they can access health care, or work-family policies such as scheduling regular hours so associates can meet their nonwork obligations.
For all the laudable advances made in reporting about and to various stakeholders, we have not begun to scratch the surface when it comes to reporting on and promoting human sustainability. It remains the case that “the study and reporting of human rights and labor issues linked to sustainability risks are far less advanced than environmental and governmental ones.”36
These examples are not to single out Safeway, GM, Walmart, or any other specific company for its reporting or lack thereof about the human consequences of its management practices. Reporting on initiatives to reduce waste, conserve energy, recycle, and generally protect the physical environment is rapidly becoming the norm among a growing number of particularly larger companies that are increasingly embracing evermore comprehensive sustainability reporting. Reporting on employee well-being, when it occurs at all, is frequently limited to data on time lost from accidents and other very limited indicators that fail to adequately assess social sustainability.
Of course, there are exceptions, and some companies have adopted, and report on, a more comprehensive perspective on employee well-being. Other companies could learn from these cases. For example, in 2012, BT (British Telecom) revised their health and safety policy to include employee health and well-being as key components of the company’s people strategy. The company reports on lost time because of illness as well as accidents. Promoting good health is the first item listed in BT’s health and well-being strategy. The company provides support for people who become ill or disabled to be able to transition to different jobs so that they do not have to leave the workforce. BT has developed a “mental health toolkit” and a “stress risk assessment and management tool” and trained almost “5,000 people managers in mental health support since 2008.” Most important, BT’s management system and philosophy begins with: “The first and foremost principle for any organization should be to avoid doing harm to its people.”37 If more companies took employee health this seriously in both goals and training, companies and people would benefit.
The simple fact that as a society we are apparently profoundly concerned about the physical environment and largely indifferent to what companies do to the social environment, to the human beings who work for them, has important implications for understanding the contemporary world. It helps explain why jobs, particularly good jobs, are disappearing and why many employees, in numerous countries, report increasing levels of stress and psychological and physical distress. The world of work provides a daily manifestation of the simple truism: out of sight, out of mind, or its corollary from the quality movement, what gets inspected gets affected, and what does not get measured, doesn’t change or even degrades. With no measurement, no reporting, no requirements for considering the consequences of creating social pollution, as distinguished from environmental pollution, work organizations continue to use decision logics that leave them blissfully—perhaps even willfully—unaware of what they are doing to their employees.
People Are Missing in Public Policy, Too
The emphasis on the physical over the social environment holds not just for companies and their reporting but for public policy as well. At both local and national levels, environmental regulations, for instance, limit waste discharges and carbon dioxide emissions and mandate automobile mileage standards. There are best practices, policies, and regulations for corporate governance, such as requiring outside directors on certain board of director committees, and efforts to measure, disclose, and limit environmental and governance risks. These activities are much more extensive than are comparable efforts focused on employee well-being. Monitoring the most basic aspects of physical safety such as workplace accidents and deaths has, over time, driven down workplace fatalities and injuries substantially, and some aspects of chemical exposure have been regulated. But otherwise employers in the United States and elsewhere are mostly free to impose layoffs, require flexible hours and shift work, and inflict other hardships that have important consequences for human health without considering the effects of these decisions.
It is true that there has been some, albeit limited, policy focus on the effects of workplace conditions on employee health and well-being, and such an emphasis is growing. The World Health Organization, recognizing that health is a human right and that population health confers many benefits, has acknowledged the psychosocial causes of ill-health, including such causes located in the workplace.38
In the United States, for decades the National Institute for Occupational Safety and Health (NIOSH) has recognized that the work environment can be a threat or risk factor for people’s physical and mental health. The agency has sought not only to assess the magnitude of the health risks at work but also to have employers remediate unhealthful conditions in workplaces to reduce the enormous human toll.39 However, it was only in June 2011 that “NIOSH launched the Total Worker Health Program . . . as a strategy of integrating occupational safety and health protection with health promotion to prevent worker injury and illness,”40 and around the same time, the US Department of Health and Human Services announced Healthy People 2020, with the goal of increasing access to programs to reduce employee stress.41 But for the most part, the emphasis remains on preventing occupational injuries and exposure to hazardous physical conditions coupled with encouraging health promotion programs, with comparatively limited attention focused on changing the psychosocial dimensions of work that have profound effects on health.
There has been somewhat more policy attention to the connection between work and health in the United Kingdom. Possibly because of more and better measurement, and partly because health costs created by harmful workplace practices affect governmental budgets because of how health care is delivered and paid for, the United Kingdom has focused somewhat more public policy attention on this issue. Dame Carol Black, a principal at Cambridge University, noted in a personal communication to me that “The British Government (of whatever political persuasion) has been increasingly interested in this agenda since 2005 when they produced the report ‘The Health, Work and Well-Being Strategy—the Vision’. . . . We still have a long way to go, but the effect of poor work, poor workplaces, poor leadership, and inadequate, poorly trained managers is now gaining traction.”42
Policy attention and reporting permits public entities to estimate the costs of harmful work environments, and that measurement, in turn, spurs action. So, in the United Kingdom, “between 2007 and 2008 an estimated 13.5 million working days were lost to stress-related absence.”43 And “an estimated 1.1 million people who worked in 2011 to 2012 were suffering from a work-related illness.”44 Because of the enormous economic costs of workplace-induced stress, the UK Health and Safety Executive agency has promulgated management standards to try to reduce the incidence—and therefore the costs—of work-related health problems. Nevertheless, the UK guidelines and the NIOSH initiatives rely more on voluntary implementation by companies than do comparable policies instituted by other agencies that are focused on the physical environment and that have more substantial fines and regulatory enforcement resources behind them.
The implication: if we truly care about human beings and their lives, including how long people live—if we are concerned with social sustainability and not solely environmental sustainability—we need to first understand and then alter those workplace conditions that sicken and kill people.
HEALTH AS A MEASURE OF WELL-BEING AND SOCIAL SYSTEM EFFECTIVENESS
We should care about mortality and human well-being for several reasons. In the first place, international human rights laws and conventions, such as the Universal Declaration of Human Rights and the International Covenant on Economic, Social, and Cultural Rights, consider workplace health and safety issues to be fundamental human rights.45 The moral and social justice foundations for considering human health abound.
Second, health status is one important indicator of organizational or any other social system’s performance. As British epidemiologist and expert on health policy Sir Michael Marmot wrote, “Health functions as a kind of social accountant. If health suffers, it tells us that human needs are not being met.”46 He quoted Nobel Prize–winning economist Amartya Sen: “The success of an economy and of a society cannot be separated from the lives that members of the society are able to lead.”47 Health status and well-being—self-reported physical and mental health—and other indicators such as infant mortality and people’s life expectancy, are all good barometers of how well any social system, be it a country, city, or work organization, is functioning.
In well-functioning systems, people are well and live long. When systems break down or suffer dysfunction, people get sick and die. This general principle is nicely illustrated by analyses of the missing men of Russia and Eastern Europe. The dissolution of the Soviet Union and the freeing of the Soviet-dominated or occupied countries of Eastern Europe would eventually lead to economic growth and improving health. But in the transition, access to formerly state-provided health services declined, unemployment and economic inequality and insecurity all increased and social problems including alcohol abuse soared. During this turbulent time, there were dramatic declines in life expectancy in much of Eastern Europe and a decrease in average male longevity of seven years in Russia following 1989.48 Put another way, “in the decade following the collapse of Communism . . . there were an estimated 4 million excess deaths . . . over and above what would have been expected from the historical trend.”49 Declining health and increased mortality mirrored and reflected the economic insecurity and breakdown of social support systems as Eastern European countries transitioned to new governments and social arrangements.
Another oft-used indicator of social system functioning is life satisfaction or subjective well-being, and economists as well as other social scientists are increasingly interested in understanding the determinants of happiness as well as how to best measure the construct.50 Not surprisingly, happiness and health status are positively related. A study of 151 early adolescents reported a positive correlation between health and happiness,51 with a similar positive relationship between health and happiness observed in a sample of 383 older adults.52 A study of the relationship between happiness and health in forty-six countries found a strong relationship between the two,53 and the World Database of Happiness summarized numerous studies from multiple countries evidencing strong correlations between health status and happiness.54 These results make sense because it is harder to be happy if a person is ill. The relationship between health status and measures of subjective well-being further make the case that the health of an organization’s employees is a useful and important measure of one dimension of organizational effectiveness.
In addition to the moral importance of human life and the role of health as an indicator of system functioning, there is also a strong economic rationale for a greater focus on the effect of the workplace on employee well-being. It should not be news that health-care costs are soaring all over the world, in part because of aging populations—birth rates have declined, which means that average population ages have increased—but also because of ever-eroding employment circumstances. One study linking working conditions to mental health noted that “available evidence provides support for the idea that job quality in most European countries has progressively deteriorated,”55 and what is true for Europe holds also in the United States with its more laissez-faire approach to labor market protections.
Much if not most of the increase in health-care costs faced by countries around the world arises from chronic (and somewhat preventable) diseases such as cardiovascular disease and diabetes. A World Economic Forum (WEF) report noted that in the United States, 75 percent of the more than two trillion dollar annual health-care spending was accounted for by people with chronic diseases. And these chronic conditions such as diabetes and circulatory problems are spreading throughout the developing world, including to countries such as China, Russia, India, and Brazil.56 Ill-health exacts a huge toll on productivity at both the societal and individual company levels of analysis. That same WEF report stated that the productivity losses from employees with chronic disease were as much as four times the already-large direct costs of treating those diseases.
HEALTHY PERSONAL BEHAVIORS COME FROM HEALTHY WORKPLACES
Because of ever-increasing health-care costs, the productivity loss arising from sickness, and the costs coming from having to replace employees who left the labor force because they were too ill to work, employers and governments around the world have instituted programs to enhance employee health and well-being. Such initiatives, however, focus almost exclusively on influencing individual decisions such as those concerning diet, exercise, smoking, and alcohol and substance abuse, leaving the context—the work environment—that affects people’s stress levels, and consequently their behavior, largely untouched.
Such health improvement programs are particularly common in the United States, where employers have traditionally been more directly responsible for paying for employee health insurance and, thus, indirectly employees’ health-care costs. A RAND Corporation report evaluating employee wellness programs noted that almost 50 percent of the employers in the United States with more than fifty employees and 92 percent with more than two hundred employees offered some sort of wellness promotion program in 2009.57 These programs encourage employees and their families to exercise, give up smoking, eat a healthier diet, restrict their alcohol intake, and monitor various biomarkers such as blood pressure and cholesterol to keep them at healthy levels. A survey of some eight hundred large and midsize employers by the consulting firm Aon Hewitt reported that 79 percent used rewards such as lower insurance premiums to try to get people to improve their health. Increasingly, Aon Hewitt found, companies were also imposing penalties for employees who did not improve on various biometric and lifestyle measures.58
Although employers are obviously concerned about health insurance costs and also employee absence, turnover, and productivity, and therefore attempt to improve these outcomes as they are affected by individual health, the focus of most wellness programs is too narrow to accomplish much. Employer interventions such as nutritional and stress counseling and exercise classes and the modest financial incentives offered to workers to induce them to participate in wellness screenings, and even public policy interventions such as cigarette taxes, focus almost exclusively on getting individuals to make decisions to engage in lifestyle changes.
As one example, the large grocery store chain Safeway has received much attention for its Healthy Measures program. That CEO-inspired initiative offered employees reductions in their health insurance premium contributions if they stayed within certain predetermined limits on smoking, obesity, blood pressure, and cholesterol.59 The assumption of this and similar programs is that if you improve people’s knowledge about nutrition and exercise, offer them exercise and stress-reduction opportunities, measure their health status, and possibly offer some financial inducements for participating, these interventions will be sufficient to get behavioral change. The problem is that employers seldom consider the workplace itself and what occurs there as important causal factors affecting individual behavior.
Such neglect is unfortunate because extensive research shows that individual health-relevant decisions such as drinking, smoking, drug abuse, and overeating are profoundly affected by job-related conditions.60 For instance, we know that work hours are long in many law firms that are also often characterized by very interpersonally competitive cultures. A New York Times article reported that “21 percent of lawyers qualify as problem drinkers while 28 percent struggle with mild or more serious depression and 19 percent with anxiety.”61 Moreover, as that article noted, many lawyers apparently have serious drug addiction issues that start by using stimulants to help them maintain their demanding schedules.
The work environment affects how people think about their lives and also their level of psychological well-being. Not surprisingly, people who do not like their lives are less likely to take good care of themselves. As psychiatrist Richard Friedman, explaining addiction, wrote:
No one will be shocked to learn that stress makes people more likely to search for solace in drugs or food (it’s called “comfort food” for a reason). . . . Now we have a body of research that makes the connection between stress and addiction definitive. More surprising, it shows we can change the path to addiction by changing our environment.62
Companies know about these work-environment effects, but nonetheless fail to act. For instance, a 2008 study by human resource consulting firm Watson Wyatt (now Towers Watson) found that 48 percent of organizations said that job-related stress, caused by long work hours and lean staffing policies that resulted in fewer people doing more work, affected business performance. However, only 5 percent of the employers said they were doing anything to address these health- and performance-related issues.63
Because the job conditions that affect health are not the primary focus of most employer wellness interventions, not surprisingly, workplace wellness programs often don’t work very well, although the evidence on their success is mixed. The first important fact about wellness programs is that only a tiny fraction of these interventions have been evaluated at all. Second, an important issue with workplace wellness programs is employee participation. For instance, supermarket chain H-E-B found that annual health-care claims were about $1,500 less for participants in its workplace wellness program.64 But a RAND study reported that employee participation rates frequently were not that high, with fewer than half of employees in workplaces offering wellness programs participating. A Gallup survey found that “only 24 percent of employees at companies that offer a wellness program actively participate in it.”65 Even at Stanford University, which has a long-running, well-administered, comprehensive, leadership-supported program with financial incentives for participation, a significant fraction of employees—more than 35 percent—do not avail themselves of the program.
One meta-analysis of thirty-two published studies concluded that “medical costs fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent.”66 However, a more recent, comprehensive analysis concluded that “wellness programs produce a return-on-investment . . . of less than 1-to-1 savings to cost.”67 And a study of PepsiCo’s wellness program, Healthy Living, found that “seven years of continuous participation in one or both components [of the program] was associated with an average reduction of $30 in health care cost per member per month,” with the disease management component accounting for the lower costs while the lifestyle-altering component had no effect.68 The RAND report found that wellness programs had some effect on lifestyle choices such as diet and exercise, but an analysis of more than 360 thousand employees from five employers noted that the difference in health-care costs between people who participated in wellness programs and those who did not was just $157 annually, an amount that is neither statistically nor substantively significant.69 You can’t expect people to adopt healthy lifestyles when their work environments reinforce or even cause poor habits.
Separate from debates about the effectiveness of employer-initiated workplace wellness programs, it is quite instructive to think about the criteria most often used to evaluate these wellness interventions. Evaluations focus almost exclusively on health-care costs. Costs obviously are important. But maybe, just maybe, assessments of employee wellness programs should also focus on employees’ wellness and well-being—their health, both physical and mental, and even their mortality and morbidity. Health status is not perfectly correlated with costs. After all, if a person drops dead, health-care spending stops. Privileging economic costs over human well-being shouldn’t occur as thoughtlessly as it now does, and costs certainly should not be the sole criterion used in assessing whether wellness programs worked or did not.
EMPLOYER CHOICES AND HEALTH-CARE SYSTEM PERFORMANCE
Discussions of health and health-care costs often begin, as I have noted, by focusing on individual choices. One analysis estimated that poor individual decisions concerning diet, exercise, and substance abuse contributed to more than 1 million of the 2.4 million annual deaths in the United States.70
In addition to individual decisions, much public policy discussion and empirical research focuses on two other possible causes of the underperformance of the US health-care system, where underperformance means spending a large amount of money without obtaining better health outcomes. To be clear, the United States, despite being a leading source of drug and medical device innovation and despite enormous investments in technology and health infrastructure, clearly underperforms. According to the OECD, the United States spends $7,662 per person (adjusted for purchasing power parity) on health care, which is 2.6 times the OECD average and is the highest amount in the world. America devotes 16.9 percent of its GDP to health care, 1.8 times the OECD average, and again has the highest proportion in the world. Nonetheless, the United States ranks just twenty-seventh for life expectancy at birth, fifty-third in deaths per one thousand live births—a measure of infant mortality—and twenty-third in life expectancy for men aged sixty-five.71
One focus for reducing health costs and improving health system performance has been on societal-level choices such as the way the health-care system is organized and paid for and the administrative cost burden thereby created.72 Because the administration of much health-care reimbursement in the United States has been left to insurance companies, the evidence suggests that the United States confronts a particularly large administrative overhead expense of about 30 percent. Such expense is an almost inevitable result of health-care providers having to deal with a multitude of insurance companies and insurance companies transacting with numerous providers. A related more macro-level focus has been on what insurance should and should not be required to cover (for example, preexisting conditions, birth control, and alternative health therapies). Yet another macro-level focus has been how to pay for the medical costs of the aging populations that most advanced industrialized countries confront, and particularly how the cost burden should be shared between individuals and the larger society.
A second focus on the determinants of health system performance has been on the internal administrative dynamics of health-care organizations that actually deliver care, including how to ensure that the incentives providers face work to ensure cost-effective care. For example, there have been studies of the effectiveness of incentive pay and also analyses of practices that encourage learning and continuous improvement in health-care organizations.73
These are important factors to consider, of course, but ignoring the effects of employer actions that determine workplace conditions seems singularly unwise. Looking at what employers do daily to create healthy or harmful workplaces is a crucial missing piece of the story of human well-being, health, and health-care costs.
Consider as just one example the effects of employer decisions about wages. Although wages are partly determined by labor market conditions, there are low-wage and higher-wage employers in the same industry—Costco and Walmart being one example of such differences. And the evidence is clear: wages affect health. For instance, a study of more than seventeen thousand people using Panel Study of Income Dynamics data reported a negative and strongly statistically significant correlation between wages and the self-reported (based on a physician’s diagnosis) incidence of hypertension. The data show that the higher the wages earned, the lower the likelihood of reporting high blood pressure. The effect of wages on health was greater for women and for younger working people between twenty-five and forty-four years old. This was a prospective, longitudinal study, so that wages in an earlier wave of the study were used to predict newly diagnosed high blood pressure, thereby helping to establish the direction of the causal relationship. The evidence showed that a doubling of wages was related to a 25 to 30 percent diminished risk of hypertension.74 Many other employer decisions affecting work hours and work-family conflict also affect health, as we will see throughout this book.
My fundamental message is simple: employers have a choice. They can implement practices that enhance human well-being—physical and mental health—thereby reducing their own costs from employee medical expenses, absenteeism, workers’ compensation insurance costs, and the productivity loss from having employees who are physically at work but not “really there” (a problem called presentism in the research literature). Such employer actions will also reduce the costs to society from people’s poor physical and mental health and the harm done to individuals. Simply put, employers can make decisions to improve people’s lives in fundamentally important ways. Or, alternatively, employers can, either intentionally or through ignorance and neglect, create workplaces that literally sicken and kill people.
If we want to build a healthier society, develop policies that promote social sustainability and healthy workplaces, and cut unnecessary health-care costs and sickness and death, one important place to focus is on workplace-specific interventions that enhance people’s health and the social sustainability of work organizations.