Health, wellbeing and productivity: employers to consider health and wellbeing issues more deeply

Citation

Haymes, R. (2013), "Health, wellbeing and productivity: employers to consider health and wellbeing issues more deeply", Strategic HR Review, Vol. 12 No. 5. https://doi.org/10.1108/shr.2013.37212eaa.007

Health, wellbeing and productivity: employers to consider health and wellbeing issues more deeply

Article Type: Rewards From: Strategic HR Review, Volume 12, Issue 5

Short case studies and research papers that demonstrate best practice in rewards

The drivers behind health and wellbeing – to manage absence and rising healthcare costs; to support worker productivity; and a desire to be seen as a responsible employer – are leading employers to consider health and wellbeing issues more deeply. To address these issues Towers Watson surveyed 74 leading organizations in the UK during 2012 regarding their health and wellbeing programs and their future plans in this area. These organizations employed a total of 785,000 employees in the UK across a broad spread of industry sectors.

The Towers Watson Health, Wellbeing and Productivity survey examined the changing landscape in health and wellbeing in the UK workplace. It includes how companies are managing and communicating their programs, what value they get from the programs and how they impact upon worker effectiveness and productivity.

Wellbeing – current strategies

The topic of health and wellbeing continues to rise up the UK corporate agenda. Our survey shows that more than two-thirds of respondents plan to increase support for their health and wellbeing programs in the next two years. However, the results also indicate that the motivations for doing so are not clear.

Objectives for developing wellbeing programs may be being driven by corporate responsibility and the desire to be seen as a good employer, or possibly due to a broad understanding that such programs should help to manage absence, stress and, in some cases, benefit costs. For some this approach may reflect a recognition that such programs can contribute to improved worker performance.

However, our research shows there is very little direct focus on quantifying the value and return on investment associated with health and wellbeing programs. A third of organizations report a lack of evidence on financial returns as a significant obstacle to improving the health and wellbeing of their workforce, although two-thirds of respondents did not see this as an obstacle to developing wellbeing programs.

An opportunity to improve strategic focus

A strategic focus, whereby programs and spend are targeted at key issues, is therefore largely missing. In such circumstances, how can companies truly understand the payback on their programs and how sustainable they are likely to be? There are opportunities for organizations: to better measure the links between their health and wellbeing programs and employee productivity; to better meet employee expectations regarding the support surrounding programs; and to start making sustained progress towards justifying benefit spend, and in the process deliver real value to the business.

Organizations that report that they have been able to create an internal culture of health are more likely to regard linking health to productivity as essential to their health strategy and to measure employee outcomes associated with their programs.

Health, wellbeing and productivity link

The latest Towers Watson’s Global Workforce Study points to strong links between health, wellbeing and productivity. We find that days absent due to illness or injury are significantly related to engagement and health status. Companies with an engaged workforce with high wellbeing are found to have operating margins almost three times higher than companies with low engagement.

Despite the links between health, wellbeing and productivity only just over one-third of respondents to our survey view linking productivity to health improvement as essential to their health strategy. However, when asked what priorities are in place over the next two years a very positive 69 percent of respondents stated that their organization planned to bolster their health and wellbeing programs, with 15 percent planning to increase their support significantly. When considering strategies, the focus of respondents was to raise employee engagement, create a workplace culture of health and improve both mental health and general health awareness.

Despite the priority placed on raising engagement, employers do not seem concerned to understand the linkage between health and productivity (only 11 percent view this as a high priority). Employers seem to be taking a fairly narrow view that their role is to educate workers about their workplace programs, rather than motivate better behaviors. So, whilst employers are prioritizing the need to raise worker engagement, there is little focus on linking health and wellbeing to worker effectiveness. That employers seem to be focusing on health and engagement as separate priorities is also reflected in the fact that nearly three-quarters of respondents reported they were not able to measure the return on investment associated with their health and wellbeing programs.

Health risk factors

We see that many employers do not know or are unable to measure the extent to which their workforce faces health issues. Whilst around three-quarters could answer whether they felt that stress or work-life balance were issues for their workforce, around half could not respond regarding nutrition, obesity, smoking or physical exercise.

Organizations that can understand these factors are able to design and deliver health and wellbeing programs that target the risk factors that are important to their business and best suit their employees’ wants and needs. There is then an opportunity for employers to tailor their programs better and thereby deliver improved value for money to the business.

Programs take a narrow view

The Towers Watson research showed that employers currently concentrate on a narrow range of elements of the management of health and wellbeing. Some 93 percent of employers have an Employee Assistance Program (EAP) in place – or plan to introduce one within the next two years – to address mental health issues. Similar numbers are also observed with regard to support for identified health and safety issues and for web-based information tools; although given that organizations have indicated they are not focused on educating employees, this may simply be the provision of basic information on the programs available. A better understanding of the health issues facing the company’s workforce would enable a targeted education program and more focused spend on communication.

Delivery and measurement

Nearly half of organizations do not proactively manage their providers. Only 30 percent formally track quantitative outcomes associated with programs and 25 percent require providers to share data. This again raises the question about what is motivating employers to offer health and wellbeing programs: if they are not being monitored and measured, then how effective can they be?

We observe around half of employers regularly analyze employee participation in programs, the level of unplanned absence and employee satisfaction with programs; but fewer than one-in-five regularly monitor the health risk factors that may be associated with employee performance. So, employers seem more focused on monitoring outcomes (either those associated with programs or the costs of ill-health) and less focused on proactively tracking health risk factors.

Lack of clear goals

Our research shows that, whilst there is an increased focus on health and wellbeing, there seems to be a lack of clear goals and direction. This raises the question of why companies are promoting a health and wellbeing agenda. Is it seen as part of being an employer of choice (offering a competitive advantage), or are companies simply following the herd and adopting comparable programs to their competitors? Do companies recognize that improved health may help to manage absence, stress and employee performance and hence have a potentially significant commercial payback, or is it part of a corporate and social responsibility agenda that looks at the broader responsibilities of the organization to its staff?

Our experience suggests all of these motivations exist in the minds of UK employers. However, leading practice recognizes the full breadth of influences that health and wellbeing programs have: the role in the employee deal; the influences on worker behaviors; and measurement of value to the business. Currently, only a minority of employers in the UK are examining employee behaviors and the payback to the employer as an important part of their organization’s strategy.

Rebekah HaymesSenior consultant in Towers Watson’s Healthcare and Risk Consulting team.

About the author

Rebekah Haymes is a Senior Consultant in Towers Watson’s Healthcare and Risk Consulting team. She has over 25 years’ experience in the risk and healthcare benefits industry, advising companies on benefit design, financing strategies and provider selection. She has a particular focus on wellbeing and leads on this business area for the team. Rebekah Haymes can be contacted at: rebekah.haymes@towerswatson.com