Duty of care (DoC) is a legal requirement for any company, but new research by Chubb – 'Reworking Duty of Care' - reveals that there is a clear correlation between holistic DoC measures that enshrine employee well-being in a company’s core values and increased profitability, productivity and the ability to attract and retain top talent. Stéphane Baj and Bruce Robertson of Chubb explain.
The report, commissioned by Chubb and based on interviews with 240 managers of European companies with responsibility for employee DoC (Human Resources, employee benefits, risk managers), reveals that more than half (57%) of European companies believe that there is a strong link between the quality of their DoC provision and their corporate profitability and productivity. Significantly, the research also reveals that companies which take a more holistic approach to Duty of Care that goes beyond mere regulatory requirements experience even more positive corporate outcomes. Specifically, companies willing to go the extra mile are almost a third more likely to report greater profitability, reduced employee absence and a safer working environment which minimises accidents.
These findings are particularly timely as companies across Europe grapple with a complex economic picture that might suggest cost cutting would have a stronger bottom line impact than investment in DoC.
Mind the opportunity gap - companies with a holistic approach to DoC reap greater rewards
Companies with a holistic approach benefit more than companies with just a regulatory focus (% of companies)
Not all industries are equal
While our study shows that almost two thirds (63%) of European companies have a good understanding of their DoC legal responsibilities, it also highlights inconsistencies in approach across industries in Europe.
The chemicals, telecoms, construction and real estate industries are among those reporting the most significant positive impact of high standards of DoC – with 75% of those surveyed reporting a positive impact on profitability. Companies operating in these industries are typically exposed to more significant occupational hazards. They have generally invested time, money and expertise in hiring specialists to put policies in place. This puts them ahead of the game in terms of risk appreciation and deploying best-practice policies from which other industries can take inspiration.
At the other end of the spectrum, some IT, technology and manufacturing companies do not yet appear to adopt best practice policies. Retail and education sectors likewise appear to be meeting only minimum DoC requirements. These sectors also have a heightened risk of DoC issues relating to their supply chain partner companies and working conditions of their employees in developing countries where standards sometimes fall well below what is acceptable in Europe.
In our view, shortcomings in these sectors create risk and this research suggests that companies that fail in providing a consistent level of good-quality care may experience higher work accident rates, higher absenteeism and staff turnover and are at greater risk of under-performing their peers and experiencing reputational and financial loss.
Appetite to improve
European companies can improve many aspects of their DoC offering by seeking more advice from their insurance partners about solutions, tools, apps and policies that help in the smooth and effective running of their DoC provision. At present, however, just over one in five (22%) companies seek advice from the insurance industry when they define or update their DoC offering.
Clearly there is an opportunity here for risk managers and underwriters to work more closely together. While testing economic times might encourage companies to cut costs, our research shows how investing in DoC can help companies improve their productivity and profitability, hiring and retention of top talent, as well as boosting their brand equity. With the interests of employees and employers so clearly aligned, improving DoC via improved insurance solutions is surely a win-win situation for everyone.
Stéphane Baj is Regional Director, Corporate & Affinity, Accident & Health – EMEA at Chubb. Bruce Robertson, Head of Accident and Health for the UK and Ireland at Chubb.
Duty of care priorities
- Embrace a duty of care mind-set. Go beyond the legal minimum and enshrine DoC as a core value, aiming to protect employees wherever they work.
- Create a supportive working culture. Make employee well-being and work-life balance a priority.
- Enhance working conditions. Greater investment will help your workforce to be more content and the business will benefit from better productivity, profitability and staff retention.
- Broaden employee-related risk assessment. Ensure that your business has sufficient insurance cover to protect your staff in the workplace and when on business travel. Also consider insurance provision for serious medical conditions, even if not directly work related, as this can impact employee morale, absenteeism, productivity and loyalty.
- Consider the policies of your international business partners. Failing to extend your DoC across your international supply chain can result in dire consequences.
- Promote your DoC. Good quality DoC can boost company reputation and serve as a valuable recruitment and marketing tool.
- Stay up to date with services. There are many employee-assistance services available to employers and their employees at little or no cost provided by insurers as part of an insurance programme to support DoC provision.