Over the last 20 years, we have seen the emergence of a major trend in North America: employee health and wellness are suffering. In Canada and the United States, there have been alarming increases of hypertension, diabetes and obesity. Between 1994 and 2005, the rates of arterial hypertension among Canadians increased by 77%, diabetes by 45% and obesity by 18%, affecting people of every age. Even more concerning is that hypertension rates among Canadians aged 35 to 49 rose 127% during the same period, and almost doubled among young people over the last 15 years (CBC News). The long-term effects of these issues will be dire; for the first time in decades, life expectancy has decreased in the United States, according to a study by the Centers for Disease Control and Prevention published in December 2010.
Health care costs increasing
For employers, these factors should be worrisome, since research shows that employee health directly impacts work behaviour, attendance, on-the-job performance and, of course, health care costs. According to the 2010 Health Care Cost Survey by Towers Watson, employers are now paying 28% more for healthcare than they did just five years ago, and employees are paying 40% more.
A serious challenge faced by businesses today is a high turnover of qualified, motivated and loyal workers. Many employers are failing to support and sustain their best people and create trusting relationships with their employees. The evidence: according to a report by TLNT, 74% of workers are passive job seekers ready to consider a move. In today’s competitive markets, employers must find new ways to attract and retain the best and brightest talent. One way to do this is to offer employees an environment that promotes healthy and active lifestyles.
Root of the problem
“Seventy-five percent of health care costs result from unhealthy lifestyles,” writes Barbara Schaefer, senior vice-president, human resources for Union Pacific Corporation, in her article, “Long Train Running”. In health matters, factors such as smoking, physical inactivity and poor eating habits are responsible for the vast majority of health risks and their associated costs.
There is good news for employers, however. These leading causes of illness are largely preventable. A 2007 study of more than 200,000 employees, conducted by the University of Michigan, determined that 61% of employees have two or less health risks, 28% have a moderate risk (three to four risk factors) and only 11% have an elevated risk (five or more health risk factors). The study determined that reducing health risk factors could save an employer US$354 per employee, per year, for an organization of 1,973 employees. These are savings that can add up quickly.
High performance companies: health and wellness leaders
Businesses today are left with no choice but to create a healthy workplace culture if they want employees to perform to their best potential. High performance companies such as SAS, Wegmans Food Markets and Google have understood the profound connection between employee health, productivity and insurance costs. According to a report by the SHRM Foundation, “more than 75% of high-performing companies regularly measure health and wellness as a viable component of their overall risk management strategy.” A survey conducted by Towers Watson and the National Business Group on Health “found that 83% of companies have already revamped or expect to revamp their health care strategy within the next two years, up from 59% in 2009. This year, more employers (66%) plan to offer incentives for employees to complete a health risk appraisal, up from 61% in 2009. Also, 56% of employers now offer health coaches and 26% now offer on-site health centres.”
And it’s working! The Public Health Agency of Canada reported that by implementing a physical activity program, Canada Life in Toronto improved productivity and reduced turnover and insurance costs while achieving a return on investment (ROI) of $6.85 per corporate dollar invested. A study conducted by the U.S. Centers for Disease Control found that “comprehensive worksite health programs focused on lifestyle behaviour change have been shown to yield a $3 to $6 ROI for each dollar invested.” According to a report by the Medisys Health Group, out of the Top 100 Employers in Canada, 77 have a structured wellness program in place and those who track the results generally find their expectations are met or exceeded.
If you ask the managers and HR directors of these Top 100 companies about the benefits of workplace wellness programs, they will tell you benefits include decreases in insurance costs, absenteeism, presenteeism and turnover rates; increases in productivity and recruitment; and improved creativity and overall motivation of the workforce.
How to build an efficient wellness program
Corporate wellness programs should focus on changing poor health habits in order to maintain affordable benefits coverage. A successful wellness program will help employees improve their physical health, improve communication throughout the organization and improve the workplace culture.
Quebec’s Groupe de promotion pour la prévention en santé (GP2S) is an organization that has worked for a number of years to establish an ISO standard for workplace wellness. According to GP2S, there are a number of factors that will affect the success of wellness programs. Firstly, commitment must come from top management; the leaders of the company must be convinced of the value of the endeavour and must lead by example. Secondly, the program should be structured and integrated; managers need to define a comprehensive wellness strategy that is integrated to the business strategy, with a budget, timeline and thorough planning of resources. Third, the objectives of the program must be linked to the business objectives and the needs of employees, meaning that the program must be well integrated into the management system.
GP2S also emphasizes the importance of effective communication. As stated in the Harvard Business Review’s article, “The Pillars of an Effective Workplace Wellness Program”, “Wellness is not just a mission—it’s a message. How you deliver it can make all the difference. Sensitivity, creativity and media diversity are the cornerstones of a successful communications strategy.” Backing up the launch of a wellness program with a strong marketing and communication strategy prevents employee cynicism and skepticism and builds employee enthusiasm and excitement.
There is one very critical action that must be taken to ensure a wellness program achieves a return on investment; the entire implementation process should be based on a detailed diagnostic that evaluates the global health of the business and the health risk factors of the employees. Conducting a diagnostic to uncover employee needs and the most common health risk behaviours allows companies to invest in real problems, which drastically improves the potential return of the wellness program.
Employers, entrepreneurs and HR managers must understand that when it comes to health and wellness, they must invest now to save later.
Fabien Loszach is a visionary sociologist and co-owner of Loszach Report.