Benefits to business. The evidence for investing in the health and wellbeing of your people.
There’s a lot of ‘nice’ reasons to invest in a health and wellness program but is there real benefit to your business? Let’s take a look at some of the evidence.
A recent Australian Government report looking at the evidence for investing in the health of your people came to the conclusion that ‘good work is good for you’.
Put simply: healthy workers = healthy organisations = healthy business performance
Employers who run health and wellbeing programs do so because they want to:
- Improve work performance and productivity
- Reduce costs associated with absenteeism, presenteeism, disability and workers’ compensation
- Improve the culture of the organisation and retain existing employees
- Improve the organisation’s image, attract talented employees and fulfil corporate social responsibility obligations.
Let’s look at the 4 main reasons that it makes good business sense. Health, engagement, productivity and human capital (or as we like to call them… people).
Workplace health and wellbeing programs can significantly improve the health of employees.
The following positive findings from research on workplace interventions have been found:
- Strong evidence that interventions addressing physical activity and/or nutrition are effective in increasing physical activity levels, promoting healthy eating and preventing obesity.
- Interventions targeting physical activity are effective in preventing musculoskeletal disorders, such as low back pain.
- Measures addressing organisational culture are effective in improving musculoskeletal health.
- Interventions utilising a comprehensive approach are effective in preventing and controlling job stress at an organisational level.
Unhealthy workers are less productive
Healthy workers rate their work performance as much higher than unhealthy workers and have far fewer short-term absences than unhealthy workers. When an Australian study considered the combined effects of self-rated work performance and absenteeism data they found that the healthiest employees are almost three times more effective than the least healthy, with the healthiest employees working approximately 143 effective hours per month compared to 49 effective hours per month by the least healthy.
Chronic disease is on the rise and impacting on the health of Australia’s workers.
Chronic diseases, which include arthritis, musculoskeletal disease, depression and anxiety, cardiovascular disease, cancer, diabetes and hypertension, make up more than 70% of Australia’s overall disease burden. Chronic disease, considered to be largely preventable, is identified as the prime cause of lost work time and often leads to disability and early retirement. Health conditions mainly associated with lost work time are back problems, arthritis and related disorders and mental illness.
Most chronic diseases in Australia are associated with one or more of the following lifestyle-related risk factors:
- unhealthy eating;
- physical inactivity;
A person’s likelihood for developing chronic disease increases with the number of risk factors they have, therefore reducing the prevalence of risk factors is key to preventing chronic disease. Whilst smoking rates are dropping, data shows other risk factor rates in Australia are rising and 72% of working-age Australians report multiple risk factors for chronic disease.
The workplace can contribute to some risk factors for chronic disease, for instance via sedentary work and work-related stress. Work-related stress is becoming increasingly problematic in Australia, as evidenced by a 54% increase in mental stress claims as a proportion of all accepted claims by premium payers in the Comcare scheme since 2006/07.
Health and wellbeing programs make staff feel valued and positively impact on workplace culture.
Health and wellbeing programs attract quality employees who value personal health and wellbeing and assist in retaining existing staff members. 60% of employees surveyed by the American Association of Occupational Health Nurses regarded wellness programs as a good reason to remain with their employer. Programs have the potential to improve workplace culture as well as workplace health by developing a closer congruence between employer and employee values—increasing the satisfaction level of employees.
Health and wellbeing programs are associated with increased employee engagement, creativity and innovation.
Global research has found that when employee health and wellness is managed well the percentage of engaged employees increases from 7% to 55%. This research also found self-reported creativity and innovation increases from 20% to 72%.
Health and wellbeing programs save employers money
There is a wealth of evidence indicating that successful health and wellbeing programs provide an excellent return on investment. For instance, one evaluation looking at economic return of worksite health promotion programs found on average programs:
> decrease sick leave absenteeism by 25.3%
> decrease workers compensation costs by 40.7%
> decrease disability management costs by 24.2%; and
> save $5.81 for every $1 invested in employee health and wellbeing.
Successful health and wellbeing programs are likely to improve productivity
While it is difficult to ascertain 100% the link between health and wellbeing programs and productivity, there are good indications that productivity can be positively impacted by these programs. For example, studies found worksite lifestyle promoting programs focusing on increasing physical activity and improving diet have resulted in reduced absenteeism and higher productivity. Further research found that where health risks increased presenteeism also increased and conversely, where health risks decreased, presenteeism decreased. It can therefore be inferred that improvements in health risk factors in employees are highly likely to improve work productivity.
The costs of ill health to business include staff turnover, absenteeism and presenteeism
Research has identified an association between health and wellbeing and employee turnover: where an organisation does not manage health and wellbeing well it is four times more likely to lose talent in the next twelve months. The Australian Human Resources Institute (AHRI) estimates the cost of replacing an employee is at least 75% of the employee’s annual salary and may be as much as 150% in some cases.25
Absenteeism rates in Australia are on the increase, up from 8.5 days per person in 2006 to 9.87 per person in 2010. Workplace absences are expensive for employers, costing on average $3741 per employee per year. As 75% of unplanned absences are for illness, the link between worker health and absenteeism costs is obvious. Organisations can calculate their own absence costs using online Absence Calculators, such as that available at: www.dhs.net.au/.
When employees at work are not fully functioning due to illness or a medical condition, it is estimated the cost to the employer is between three and four times that of absenteeism. Economic modelling of the cost of presenteeism related to 12 chronic diseases in Australia estimated overall average labour productivity loss in the region of 2.5%. As presenteeism is a ‘hidden’ cost the true cost of an unhealthy workforce is likely to be much larger than most employers realise.