Health kick can nurse ailing balance sheets

Employers are often well positioned to school their workers on wellbeing issues, even if it is only by passing on basic information – and this may result in some impressive returns, says Debbie Lovewell

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Yet, a high number of the UK population are still failing to do so. Figures published by the government last month showed that two-thirds of men and nearly 60% of women are now considered unhealthily heavy, the highest proportion in any European country. Also on the increase is the occurrence of diseases such as diabetes, mental ill-health and alcohol-related health complications.

There is much debate about how to tackle our lack of healthy lifestyles, and whether it is the responsibility of the government, employers or merely individuals themselves. Among the most effective ways of reaching a large group of people in one go is through the workplace. So employers are often ideally placed to educate their workforce about health and wellbeing issues, even if it is only by passing on basic information about the subject.

However, most employers will not be given the freedom to be altruistic without justifying their work around employee health and wellbeing with hard financial facts and figures. Rory Murphy, head of commercial at First Assist, explains that finance directors, in particular, will typically want to be shown the potential return on investment (ROI) that an organisation can expect after introducing health-led perks. “We worry about the health of our computing systems and accounting systems, but don’t worry about the health of our employees, and they are the biggest investment,” he says.

But not everyone believes that calculating ROI is the best way to justify providing wellbeing benefits. Linda Torr, head of development at Gissings, explains: “If you’ve got an organisation that really believes in putting in a wellness proposal, the best ones I’ve seen are where the organisation did it as a leap of faith. They thought it was the best thing to do rather than for the return on investment. It should be a company initiative from the top saying ‘this is the right thing to do even though it is going to cost us money’.”

Just how easy it is to measure the financial impact of initiatives such as providing nutritional advice for staff, healthy eating options, or on-site gyms and fitness classes, is a matter of some debate. Ben Willmott, employee relations adviser at the Chartered Institute of Personnel and Development (CIPD), says: “ROI on these sorts of initiatives is tricky to assess. The difficulty is isolating the impact of any one intervention. You would need to be very specific on what productivity measures you were going to employ.”

One area that employers could choose to focus on is the impact of wellbeing perks on sickness absence levels. According to the CIPD’s 2006 Absence management survey, sickness absence now costs UK employers £598 per employee per year, with employees taking an average of eight days off sick a year. So anything that employers can do to reduce this will save their organisation money in terms of gained productivity and decreased costs associated with providing cover for some roles.

“The point is that most organisations suffer from attendance at work issues, so if they can reduce the number of days people take off, that’s got to be good for the bottom line,” says First Assist’s Murphy.

Wellbeing initiatives aimed at improving employees’ health can help to reduce both short- and long-term absence, although employers shouldn’t expect to see results overnight. Fitter, healthier employees are typically less susceptible to illnesses such as colds and flu, and will theoretically have fewer absences throughout the year. “Prevention is much better than cure. If you can spot there’s a problem before it develops, it’s much better,” adds Murphy. Helping staff to become healthier and lose weight can also help to reduce the number of long-term absences caused by problems such as heart disease and diabetes, which are often linked to obesity or unhealthy lifestyles. Rick Haslam, director, client relationships at Nuffield Proactive Health, explains that obesity costs organisations 18 million sick days per year.

Unless they already record absence levels, however, some employers may be reluctant to use this method to measure the return they are gaining from investing in employee wellbeing. Employers recording sickness absence levels for the first time, for example, may find that these are higher than they expected.

Even helping employees to stop smoking can result in them spending a little bit more time at work, as they will no longer be popping out for several smoking breaks throughout the day.

Improving employee wellbeing not only helps to cut absence rates, it can also help to ensure that the time employees spend at work is put to good use. There is little point in employers measuring the effect of their wellbeing policies in terms of presenteeism if staff are consistently underperforming.

Increased productivity is undoubtedly good for business, but can be difficult to measure. Clive Pinder, managing director at Vielife, explains that this can be best achieved using statistical analysis. “You can’t manage what you don’t measure. (With) statistical analysis, you can map a nutrition score against a productivity score. By measuring health and by measuring other business metrics (such as) absence (or) stress, you can show (that there is a) correlation.”

To help them with the task, employers can now choose from a number of health risk assessment tools to record such information.

Employees’ productivity can be affected by a number of factors, many of which can be easily addressed. “If you are dehydrated, that can lead to up to a 20% decrease in productivity. If staff get to work and feel tired and ill, then any other investment is wasted,” says Pinder.

Providing staff with supplies of fresh water or offering advice on how to overcome any issues they may have with sleeping can be relatively cost-effective ways of improving productivity. As these can be provided at little cost, even a small improvement in productivity may produce a tangible return for the business.

According to the Vielife/IHPM Health and performance research study, for every £1 employers invest on wellbeing benefits, they can expect to obtain an annual return of £3.73. The report also showed that, at the beginning of the study, employees were not working effectively 24.6% of the time. A year later, following a health promotion programme, this figure had fallen to 18.2% of the time worked. This equated to an average return of £280 per employee for the year.

“It proves that a fit employee is more productive than an unfit one,” says Haslam.

Also linked to the rise in productivity is employee recruitment and retention. Staff who are engaged and motivated to perform better are more likely to want to stay with an employer, particularly if this enables them to access wellbeing perks they believe make a difference to their life. This can potentially save organisations substantial sums by reducing their spend on recruiting and training new hires.

“You know that if you put all these things in place people want to come to work. Wellness is the organisation saying ‘we want to look after you and we want you to look after yourself’. Employees will feel loved and not like they’re just (seen as) a number,” explains Gissings’ Torr.

Wellbeing initiatives can also help when recruiting staff, not least because these can help an organisation to project an image of a caring employer, explains Haslam. “A lot of graduates are (looking for) wellbeing as a key part of their offering. Lots of organisations want to be seen by their shareholders to be caring for employees,” he adds.

Carrying out staff surveys can be a good way of identifying what employees feel about their employer’s approach to wellbeing. Following the introduction of health and wellbeing initiatives at Cadbury Trebor Bassett, for example, 70% of employees said that it had improved their perception of their employer, while 81% told family and friends about the project.

In time, employers could also find that they qualify for lower healthcare costs. Willmott explains that research in the US has already found this to be the case. “It’s in an organisation’s interests to pick up the ball and run with this one because there is a lot of research that shows there is a link between wellbeing and lower healthcare costs,” he says.

On British shores, this has yet to become widespread practice, with private medical insurance (PMI) provider PruHealth being the only firm to offer cash rebates based on employees’ fitness activities.

“If you went to the PMI market and said ‘we’ve got all these things in place’, (most providers) will say ‘we’ll take those into account in future claims’ but you won’t get a discount,” says Torr.

She adds employers should also consider that, in some cases, wellbeing perks could even increase the costs of some healthcare benefits, which would need to be offset against any potential savings. Conversely “you could argue that by encouraging people to go to the gym, you could end up with increased physiotherapy claims, “she says.

Even though it may be difficult to measure at times, investing in wellbeing benefits for employees can produce a tangible return. As Willmott states: “Anything that organisations can do in terms of promoting healthy lifestyles will show employees their employer is investing in them.”

Key factors against which to measure your return on investment:

• Absence levels
• Recruitment
• Retention
• Productivity
• Employee engagement and motivation