Guest post by Fabien Loszach
Over last twenty years, we have seen the emergence of a major trend in North America: employee health and wellness are suffering. Less than one third of American employees (28%) say their overall health is “excellent”, a significant decline of 6% since 20021. In Canada and the United States, there have been alarming increases of hypertension, diabetes and obesity over the last number of years. 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: hypertension rates among Canadians aged 35 to 49 rose 127% during the same period, and almost doubled among young people over the last 15 years2. The long-term effects of these issues will be dire; several researchers believe that the North American life expectancy rate will soon decrease for the first time in hundreds of years.
Healthcare costs increasing
For employers, all of these factors should be very worrisome, especially since research shows that employee health directly impacts work behaviour, attendance, on-the-job performance and of course, healthcare costs. In fact, 76% of American businesses report healthcare cost increases of as much as 10% year-over-year3. According to a recent study by the firm Towers Watson, employers are now paying 28% more for health care than they did just five years ago, and employees are paying 40% more4. Some would say that that’s a lot of money; I believe that it’s far too much money.
Pressure is building on businesses and forcing them to develop solutions to counteract the increase in health-related costs and improve employee health. 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 best employees. The evidence: 74% of workers are passive job seekers ready to consider a move5. In today’s competitive markets, employers need to make the best use of all talent within their organization, so the bar for workplace quality has been rising. Employers must find new ways to attract and retain the best and brightest talent. To keep their top employees around, companies today must develop bonds of trust and offer their employees a healthy environment that promotes healthy and active lifestyles.
Causes of this problem
Many of our health problems in Canada and the United States are due to the aging population, but this is far from being the only factor. As Barbara Schaefer of the Union Pacific Corporation sums it up, “75% of healthcare costs result from unhealthy lifestyles.”6 In health matters, relatively few 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, as they result from health risks such as physical inactivity, smoking and high stress. A brief study of the risks that impact Canadian workforces shows that 60% of workers have a low risk (0 to 2 health risk factors), 25% have a moderate risk (3 to 4 risk factors), and only 15% have an elevated risk (5 health risk factors or more). According to a 2007 study of over 200,000 employees conducted by the University of Michigan, reducing a single risk factor creates savings of $153 (U.S.) per employee, while avoiding a risk factor results in savings of $350 (U.S.) per employee per year.
High performance companies: health and wellness leaders
Businesses today are left with no choice but to create a healthy workplace culture if they want 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”7. 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 centers.”8
And it’s working! 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.9 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.”10 Out of the Top 100 Employers in Canada, 77 have a structured wellness program in place and those who track the results generally find that their expectations are met or exceeded.11
If you ask the managers and HR directors of these Top 100 companies about the benefits of workplace wellness programs, they will tell you these benefits come in two forms: tangible and intangible. The tangible benefits consist of decreases in insurance costs, absenteeism, presenteeism and turnover rates, and increases in productivity and recruitment. The intangible benefits are realized through an improvement of the workplace environment, improved creativity and overall motivation of the workforce.
How to build an efficient wellness program
The most important questions still need to be answered: what makes a wellness program efficient and how do organizations implement them?
To be efficient, a wellness program must be well structured, meaning the program is tied to the overall business objectives and the implementation process must include leaders from every division of the business. Moreover, it must have an organizing committee that includes members at all levels, from top management to entry-level employees. To truly be successful, staff members must adhere to the program and ultimately claim personal ownership of it.
Corporate wellness programs should focus on the changing of poor health habits as a top challenge in order to maintain affordable benefits coverage. A successful wellness program will help employees improve their physical health, will improve communication throughout the organization and improve the workplace culture.
An organization named GP2S 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, “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.”12 Backing up the launch of a wellness program with a strong marketing and communication strategy prevents employee cynicism and scepticism and builds employee enthusiasm and excitement from the start.
There is one very critical action that must be taken to ensure that 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 in the company. Conducting a diagnostic to uncover employee needs and find out the most common health risk behaviours allows companies to invest in real problems, which drastically improves the potential return of the wellness program. Finally, the program must be supported by an adequate budget.
In closing, if I had just one message to deliver to employers, entrepreneurs and human resources managers, it would be this:
In terms of health and wellness, you should invest to save.
About the author:
About the author
For the last several years, Fabien Loszach (pronounced |’lō,zak|) has been working on a comprehensive implementation program for corporate health and wellness programs. His vision was based on the understanding that employers often overlook the most important element of a successful wellness program: a diagnostic of their employees and their business as a whole. Through on-site meetings with employees, managers and visionary HR leaders, as well as a research database that expands daily, Fabien and his team have developed an integrated solution called Loszach Report.
Loszach Report assists employers for every step of the implementation of a wellness program, from initial awareness through to concrete action. The solutions and advice provided to employers are based on the innovative diagnostic tool, which provides an in-depth understanding of the health and wellness issues that are impacting the well-being of employees and the bottom line of the business itself. Employers use the Loszach Report – which includes detailed results, innovative solutions and a customized catalogue of the best wellness vendors – to improve productivity, reduce absenteeism and minimize their insurance costs.
1 Families and Work Institute. (2008). National Study of the Changing Workforce. New York, NY: Kerstin Aumann, Ellen Galinsky
2 (2010, February 18) High blood pressure: Canada’s crisis in the making. CBC News. Retrieved July 20, 2011, from http://www.cbc.ca/news/health/
3 Virgin HealthMiles, Inc. (2011, May 13). 2011 National Employee Wellness Month Employee/Employer Survey Summary of Findings. Retrieved July 20, 2011, from http://us.virginhealthmiles.com/resources/Documents/2011_NEWM_Survey_Summary.pdf
4 Towers Watson. (2010). 2010 Healthcare Cost Survey. Retrieved July 20, 2011, from http://www.towerswatson.com/research/reports/
5 Hollon, J. (2011, March 8) Survey: More than 74% of Workers Are Passive Job Seekers Ready to Consider a Move. TLNT. Retrieved July 20, 2011 from http://www.tlnt.com/2011/03/08/survey-74-of-workers-are-passive-job-seekers-ready-to-consider-a-move/
6 Schaefer, B. (2009, April). Long Train Running. HR Management. Retrieved July 20, 2011, from http://www.hrmreport.com/article/Long-Train-Running/
7 SHRM Foundation. (2011, June). SHRM Foundation’s Effective Practice Guidelines Series, Promoting Employee Well-Being. Retrieved July 20, 2011, from http://www.shrm.org/about/foundation/products/Pages/HealthWellBeingEPG.aspx
8 More Employers Eye Changes to Health Benefits to Control Costs, Improve Worker Health Behavior, National Group on Health/Towers Watson Survey Finds. (February 22, 2010). Retrieved July 20, 2011, from http://www.towerswatson.com/press/1257
9 Public Health Agency of Canada. (2007). Canadian evidence suggest that businesses who support active living get a real return on investment. Retrieved July 21, 2011, from http://www.phac-aspc.gc.ca/alw-vat/execsum-resumexec-eng.php#a6
10 Centers for Disease Control and Prevention, U.S. Department of Health and Human Services. (n.d.) Reducing the Risk of Heart Disease and Stroke, A Six-Step Guide for Employers. Retrieved July 21, 2011, from http://www.cdc.gov/dhdsp/pubs/docs/six_step_guide.pdf
11 Medisys Health Group. (2008). Wellness in the Workplace: Aligning Intentions and Outcomes. Retrieved on July 21, 2011, from http://www.medisys.ca/docs/whitepapers/wellness_top_100.pdf
12 Harvard Business Review. (December, 2010). The Pillars of an Effective Workplace Wellness Program. Retrieved on July 21, 2011, from http://hbr.org/2010/12/whats-the-hard-return-on-employee-wellness-programs/sb2