5/1/2020 At Germany's SAP, employee mindfulness leads to higher profits - Reuters

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BUSINESS NEWS MAY 17, 2018 / 12:30 PM / 2 YEARS AGO

At Germany's SAP, employee mindfulness leads to higher profits

Emma Thomasson 5 MIN READ

BERLIN - Peter Bostelmann, an industrial engineer at Europe’s technology giant SAP, discovered meditation during a personal crisis
a decade ago.

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5/1/2020 At Germany's SAP, employee mindfulness leads to higher profits - Reuters

FILE PHOTO: The logo of German software group SAP is pictured at its headquarters in Walldorf, Germany, May 12, 2016.
REUTERS/Ralph Orlowski/File Photo

The impact was so profound that he persuaded his employer to start a pilot mindfulness training in 2013.

“It’s the new jogging,” said Bostelmann, who now runs a global mindfulness program at SAP. “Employees are more healthy and more
engaged and they can cope better with a changing world.”

Now SAP (SAPG.DE) is rolling out mindfulness training to all 22,000 German staff and offering consulting services to other firms. It
teaches them to pay attention to the present moment, and tune in to thoughts, feelings and surroundings.

Of SAP’s 91,000 employees, 6,500 have participated in a two-day program, including several top executives. Another 5,500 are on a
waiting list, with 21 trainers employed in 20 locations around the world and another 20 set to join in July.

After the training, SAP employees often start meetings with a minute of stillness. Groups also get together to practice “mindful”
eating and walking in their breaks, slowing down and paying full attention to their chewing or their steps.

The trend for corporate mindfulness started in Silicon Valley at companies such as Google and Intel but SAP says it has gone further
than most. It is now advising the likes of Siemens (SIEGn.DE) and Deutsche Telekom (DTEGn.DE) on mindfulness programs.

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5/1/2020 At Germany's SAP, employee mindfulness leads to higher profits - Reuters

Some skeptics question the benefits of firms investing in employee wellbeing, suggesting that many offerings amount to little more
than “well-washing” if they only gloss over a stress-inducing corporate culture.

At SAP, mindfulness is part of a broader push to tackle stress and improve employee health that it says is resulting in higher profits.

“As a company we really don’t want our employees to be ‘always on,’” said Cawa Younosi, SAP’s human resources head in Germany.

HIGHER PROFITS

Providing employees with the tools and skills to decompress can flow to the bottom line. Since 2014, SAP has sought to measure the
impact of factors such as employee engagement and health on operating profit, arguing that staff with a better work-life balance are
more resilient to stress and, therefore, more productive.

The company estimates that a 1 percentage point increase in employee engagement translates into a rise of 50 million euros to 60
million euros (43.7 million to 52.5 million pounds) in operating profit, while a 1 percentage point increase in its business health
culture index can add 85 million euros to 95 million euros.

SAP last month announced upbeat first-quarter results and raised its 2018 sales and profit guidance, saying it was gaining ground on
competitors Salesforce (CRM.N) and Oracle (ORCL.N) in the cloud and that its margin recovery was firmly on track.

SAP declines to detail how much it is spending on mindfulness but says it has seen a 200 percent return on investment, with the
training leading to a rise in employee engagement and a fall in absenteeism.

U.S. companies saw an average return on investment of $3.80 for every $1 they invested in disease management programs, but only
half a dollar for every $1 spend on lifestyle initiatives, although the latter did significantly reduce absenteeism, according to a 2013
study by public policy research body Rand Corporation.

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5/1/2020 At Germany's SAP, employee mindfulness leads to higher profits - Reuters

Focusing on the data and the neuroscience that shows the benefits of mindfulness, as well as examples of practitioners like tennis
player Novan Djokovic and Formula One champion Nico Rosberg, helped Bostelmann get buy-in from SAP’s higher ups.

After attending a course last year, Daniel Holz, SAP’s managing director for Germany, decided to roll it out to all staff in the country
as part of a program launched on Tuesday that includes 80 different training options. “The course helped me learn how to shut out
the noise of everyday life and concentrate on what really matters,” Holz said. “I have more mental peace and feel more balanced.

At the launch event on Tuesday, Bostelmann did a short trial mindfulness exercise for about 1,800 staff at SAP headquarters.

“This is no hippy-dippy stuff,” he said. “It is proven by scientific evidence, but also proven by what you can feel yourself.”

Reporting by Emma Thomasson; Editing by Bill Trott

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