Identifying the return on investment of healthcare benefits is a complex business, as Georgina Fuller goes in search of specific evidence linking wellbeing perks to sickness absence improvements
With finance teams increasingly calling for benefits professionals to prove the return on investment in all areas of reward, the pressure to do so is on. Yet this is not always easy to do, particularly when it comes to options such as wellbeing perks. Identifying the impact of benefits such as subsidised gym membership, employee assistance programmes and nutrition advice on sickness absence levels, however, can help to prove their worth.
According to the CBI/Axa Absence and labour turnover survey 2007, the average employee takes seven days off sick per annum, with absence costing UK employers £13.4bn a year in lost productivity. Just how much wellbeing benefits can do to help to lower sickness absence, however, is the subject of much debate.
Dr Peter Mills, chief medical officer at Vielife, believes there is a link. According to the Vielife/Institute of Health and Productivity Management research, carried out by Harvard Medical School on Unilever staff, which was published in 2005, there was an 18% difference in work performance between so-called unhealthy employees and the more health conscious. The study also estimated that the likely annual return of investment from health programmes was at least £3.73 for every £1 spent.
Mills explains that carrying out annual health risk assessments is the most effective way of identifying a link between wellbeing perks and sickness absence levels. “Once you have an idea of the health issues you’re dealing with and the data to work from, you can then compare it with your sickness records. Reluctant employees can be offered incentives, such as cash prize draws, to complete the assessments. You can then draw out the ones who are most at risk.”
But while many wellbeing initiatives, such as free gym membership and nutritional advice, have become increasingly popular, some are having less of an impact. Naomi Saragoussi, senior consultant at Watson Wyatt Worldwide, says: “Employee assistance programmes are very commonplace now but there is still a mentality in the UK that makes us reluctant to see a counsellor and talk about our problems.”
She adds that there is also an issue with the “nanny state” culture and getting disaffected employees to take up wellbeing initiatives can be a challenge. “People can be offered a health screening but the ones that need it most may not take it up,” says Saragoussi.
Mills agrees that targeting disengaged staff can be tricky. “It’s easy to motivate people that want to change, who want to give up smoking or get fit. The real challenge is to motivate those who don’t. There are no easy answers,” he says.
Employers should also ensure that they don’t focus too much on implementing wellbeing perks at the expense of sickness absence, says Alex Bennett, head of health consulting benefit solutions at Aon Consulting. “Most businesses make decisions about what they’re going to spend money on in a formal way. At the moment, there just isn’t enough data to show how wellbeing benefits can cut sickness absence,” he says.
Whatever benefits employers use to tackle absence, early intervention is vital, says Dr Sayeed Khan, chief medical officer at engineering and manufacturers’ organisation EEF. He believes that more traditional healthcare benefits, such as private medical insurance, can make a big difference. “Having health insurance can relieve anxiety for employees and it makes sound business sense as the cost of paying for an employee to be off [sick] for three months is a lot more expensive than paying for them to get a health test. It’s about the psychological contract between an employer and an employee with the employer actively showing that they care,” he explains.
Employers should also make an effort to listen to staff about what benefits would best work for them. “Asking employees what would make a difference to them, whether it’s free parking or cr¿che facilities, should improve their wellbeing and make them less likely to go off sick,” says Khan.
Most employers are now beginning to recognise the need to measure the impact of wellness perks, particularly in relation to sickness absence.”There’s a definite culture shift going on. Employers are realising they have an obligation to look after the health of staff and hopefully employees are realising they have a responsibility to be fit to do their job too,”says Mills.
If you read nothing else read this…
- It can be difficult to identify the impact of wellbeing perks on sickness absence levels, but doing so can help to prove their worth and demonstrate a return on investment.
- Annual health risk assessments can be an effective way to gather the necessary staff data and measure the impact of wellbeing on sickness absence.
- Sickness absence is often recorded on a retrospective payroll system, so by the time problems are identified, it may be too late for an employer to intervene and reduce the length of the absence.