THE PRINCIPLES OF FINANCIALLY RELEVANT PROMOTION OF WORK WELL-BEING – A FINNISH PERSPECTIVE

Keywords: occupational safety and health; workplace health promotion; work well-being; productivity; economic feasibility; human resource management.

Abstract

Despite abundant research indicating that promotion of work well-being is basically profitable for the corporations, the management in many organizations fails to see the financial potential of improving the working conditions of their personnel. The purpose of this paper is to present recent findings on the financial effects of work well-being activity mainly in Finland, and extract five success principles in this context. This study is based on a number of empirical studies in which the author of this article has participated during the past decade and similar studies in Finland and other countries. The main focus is on the relationship between activities which promote work well-being and their financial consequences for the employers. Particularly the findings generated by the decadelong Finnish strategic well-being-project are exploited. Survey data from more than 2000 randomized Finish private and public organizations were collected and analyzed. Finnish cases indicate that companies can benefit up to 20 % of their profits by investing in their personnel. Comprehensive Finnish surveys indicate that the management of work well-being is far from optimal and that companies that take well care of their people do financially well. It is maintained that companies have a limited view of the scope and possibilities of work well-being activity and therefore fail to see its financial potential. The main limitation of this study is that it is based on mainly Finnish and Nordic data and research. This means that some of the cost structures of the companies studied may vary from those of companies in other countries. The magnitude of the financial effects is, however, so large that the findings should be indicative for other countries as well. The practical value of the principles generated and presented in this paper is in that they demonstrate the mechanisms of how promotion of safety and well-being at work is transformed into financial value. That may help public and private policymakers in developing national and company-level human resource strategies. The findings add to the literature of the economic feasibility of occupational safety and health by introducing new explanations to how the economic effects emerge.

References

Braunig, D., Kohstall, T. (2013). Calculating the international return on prevention for companies: Costs and benefits of investments in occupational safety and health. International Social Security Association. Geneva. Available: https://ww1.issa.int/sites/default/files/documents/

publications/2-ROP-FINAL_en-157255.pdf.

Työkykyjohtamisen benchmark-tutkimus 2014. Loppuraportti 15.10.2014. Available: https://www.terveystalo.com/Global/tth/Tekem%C3%

A4tt%C3%B6m%C3%A4n%20ty%C3%B6n%20vuosikatsaus%202014%20loppuraportti.pdf.

Jain, A., Leka, S., Zwetsloot, G.I. (2018). Managing health, safety and well-being: Ethics, responsibility and sustainability. Springer. Dordrecht.

Lerner, D., Rodday, A. M., Cohen, J.T., Rogers, W.H. (2013). A systematic review of the evidence concerning the economic impact of employee-focused health promotion and wellness programs. Journal of Occupational and Environmental Medicine, 55(2), 209–222.

Baicker, K., Cutler, D., Song, Z. (2010). Workplace wellness programs can generate savings. Health affairs, 29(2), 304–311.

Chapman, L.S. (2005). Meta-evaluation of worksite health promotion economic return studies: 2005 update. American Journal of Health Promotion, 19(6), 1–11. DOI: 10.4278/0890-1171-19.4.TAHP-1.

Parvinen, L.A., Windischhofer, R., Gustafsson, M. (2010). Competitive advantage through value-based health care: The case of Metso Corporation. European Management Journal, 28(3), 195–207.

Ahonen, G., Parvinen, L., Vainio, H., Husman, K., Ylikoski, M., Parvinen, A., Liira, J., Puputti, I., Parry, S. (2011). Arvopohjainen työkyvyn hallinta tehostaa työterveyshuoltoa–Kahden yrityksen tapauskuvaus. Suomen Lääkärilehti, 66(11), 921–926.

Johanson, U., Ahonen, G., Roslender, R. (2007). Work health and management control. Stockholm: Thomson fakta. Available: https://www.researchgate.net/profile/Ulf_Johanson/publication/257871940_Work_health_and_management_control/links/54119d2f0cf29e4a23297097.pdf.

Ilmarinen, J. (2006). Towards a longer working life! Ageing and the quality of worklife in the European Union. Finnish Institute of Occupational Health (FIOH), Helsinki.

Jurvansuu, S., Seitsamo, J., Tuuli, P. (2000). Toimipaikan menestyminen, organisaation terveys ja henkilöstön hyvinvointi. In K. Tuomi (Ed.) Yrityksen menestyminen ja henkilöstön hyvinvointi. Työ ja ihminen tutkimusraportti, 15. Työterveyslaitos, Helsinki

Aura, O. (2006). Worksite fitness policy in an intellectual capital framework. Swedish School of Economics and Business Administration, Economics and Society, 164, Helsinki. Available: https://helda.helsinki.fi/bitstream/handle/10227/229/164-951-555-935-9.pdf?sequence=2&is

Allowed=y.

Ilmarinen, J. (1995). Työkykyä edistävät ja heikentävät tekijät. Julkaisussa: Rautoja, S.(toim.). Hyvä työkyky: työkyvyn ylläpidon malleja ja keinoja. Työterveyslaitos. Helsinki.

Hussi, T. (2005). Essays on managing knowledge and work related wellbeing. Swedish School of Economics and Business Administration, Economics and Society, 150, Helsinki. Available: https://helda.helsinki.fi/bitstream/handle/10227/122/150-951-555-892-1.pdf?sequence=2&isAllowed=y.

Aura, O., Ahonen, G. (2016). Strategisen hyvinvoinnin johtaminen. Helsinki: Talentum Pro. Helsinki.

Pahkin, K., Leppänen, A., Kajosaari, K., Ala-Laurinaho, A., Welling, I., Väänänen, A., Joensuu, M., Koskinen, A. (2010). Työhyvinvoinnin kehittäminen ja sairauspoissaolojen hallinta paperiteollisuudessa. Työympäristötutkimuksen raporttisarja, 48, Finnish Institute of Occupational Health (FIOH), Helsinki 2010.

Galabova, L., Ahonen, G. (2011). Is intellectual capital‐based strategy market‐based or resource‐based?. Journal of Human Resource Costing & Accounting, 15(4), 313–327. DOI: 10.1108/14013381111197243.

Sveiby, K.E. (1997). The new organizational wealth: Managing & measuring knowledge-based assets. Berrett-Koehler Publishers. 220 p. Available: https://books.google.com.ua/books?hl=ru&lr=&id=xKNXlgaeCjAC&oi=fnd&pg=PR9&ots=9XEhbqx496&sig=iOhFUfR7En2xXNPTqx

BBXLCPXZA&redir_esc=y#v=onepage&q&f=false.

MERITUM 2002: Cañibano Leanadro, Sánches M Paloma, Garcia-Aysuo Manuel, Chaminade Cristina (eds.): Guidelines for managing and reporting on intangibles (Intellectual Capital Report). Dundatión Airtel Móvil. Vodafone. Madrid 2002.

Roberts, L. Update On Market Overvaluations——-43% to 90% Above Historic Means. Another Measure Of Overvaluation. Available: https://www.davidstockmanscontracorner.com/update-on-market-overvaluations-43-to-90-above-historic-means/.

Ahonen, G. (2000). Generative and commercially exploitable intangible assets. Classification of intangibles, (712), 206–213.

Aura, O., Ahonen, G., Hussi, T., Ilmarinen, J. (2014). Strategisen hyvinvoinnin tila Suomessa. Excenta Oy. Helsinki 2009 and 2010 (Excenta and Finnish Institute of Occupational Health (FIOH) 2011, OP and FION 2012, OP, Terveystalo and FIOH 2014, Ossi Aura Consulting 2016, unpublished reports).

Johanson, U., Foldspang, L., Mark, M., Lund Rants, L., Römer Hjorth, L., Langholz-Carstenssen, C., Melchior Poulsen, O., Ahonen, G., Aasnæss, S. (2014). Working environment and productivity. A register-based analysis of Nordic enterprises. Copenhagen: Nordic Council of Ministers. Series: TemaNord 2014:546. p. 87. ISSN 0908-6692. DOI: 10.6027/TN2014-546.

Aura, O., Ahonen, G., Hussi, T. (2015). Henkilöstö­tuottavuus ja eurot – case rakennusala. Helsinki: Keskinäinen Eläkevakuutusyhtiö Etera.

Lindström, K., Schrey, K., Ahonen, G., och Kaleva, S. (2000). The Effects of Promoting Organizational Health on Personnel Well-Being and Effectiveness in Small and Medium-Sized Enterprises. In book: Healthy and Productive Work: An International Perspective (Eds. Murphy, L. and Cooper, C.). Taylor & Francis, London: CRC Press, https://doi.org/10.4324/9780203305645.

Aura, O., Ahonen, G., Ilmarinen, J. (2010). Toward Better Work and Well-being proceedings: Strategic Wellness Management in Finland. The First National Survey of the Management of Employee Well-being. Journal of Occupational and Environmental Medicine, 52(12), 1249–1254.

Rissanen, M., Kaseva, E. (2014). Cost of lost labour input. Finland: Ministry of Social Affairs and Health, Department for Occupational Safetyand Health. Available: https://valtioneuvosto.fi/documents/1271139/1332445/Cost+of+lost+labour+input_en.pdf/d5790088-8e3e-4d13-a5cd-56c23b67de0c/Cost+of+lost+labour+input_en.pdf.pdf.

Published
2020-09-30
How to Cite
Ahonen, G. (2020). THE PRINCIPLES OF FINANCIALLY RELEVANT PROMOTION OF WORK WELL-BEING – A FINNISH PERSPECTIVE. Labour Protection Problems in Ukraine, 36(3), 3-9. https://doi.org/10.36804/nndipbop.36-3.2020.3-9