Central European Business Review 2019, 8(1):50-63 | DOI: 10.18267/j.cebr.211

Is the Mandatory Implementation of Workplace Health Management Systems Harmful to the Competitiveness of European Employers or an Obstacle to Economic Growth?

Thomas Schiller
University of Economics, Prague, Faculty of Business Administration, W. Churchill Sq. 4, 130 67 Praha 3, Czech Republic, Thomas.Schiller@gmx.de

This paper analyses, reviews and connects the existing literature about workplace health management systems. We investigate the empirical evidence if a mandatory implementation could lead to a Pareto improvement for all stakeholders. This evaluation is based on the inclusion of several studies, which are not yet connected to the health-related issue. The increasing incidence of employee health issues generates high costs for employers as well as for insurers. Workplace Health Management Systems act as preventive measures in reducing health-related costs. Many case studies are used to explain the concepts and the specific cost reduction for the companies analyzed. But there is still a lack of a broad empirical base to provide convincing evidence for the cost-effectiveness of these programs. To demonstrate the general efficiency of these systems, several studies of different concepts with similar characteristics are compared to ensure, that the mandatory implementation leads to positive effects on the economy. We find that by implementing just a few prevention measures, positive returns can be achieved for a majority of sectors. Given that the market seems incapable of creating this allocation improvement by itself, the integration of health management into the Working Conditions Act seems reasonable, since this could allow a Pareto-efficient outcome to be achieved. Consequently, implementation will not lead to a reduction in the competitiveness of European employers, but rather to increased staff retention and improved productivity due to fewer employee sick days and an improvement in public health and makes the mandatory implementation of workplace health management systems a considerable issue for policymakers.

Keywords: firm employment conditions, government policy and regulation, firm employment decisions
JEL classification: M14, M48, M51

Received: March 25, 2019; Revised: April 23, 2019; Accepted: April 25, 2019; Prepublished online: April 27, 2019; Published: April 28, 2019  Show citation

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Schiller, T. (2019). Is the Mandatory Implementation of Workplace Health Management Systems Harmful to the Competitiveness of European Employers or an Obstacle to Economic Growth? Central European Business Review, 8(1), 50-63. doi: 10.18267/j.cebr.211
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