“The global workforce is becoming fatter, sicker and less productive due to chronic conditions such as heart disease and diabetes,” reports a 2006 Price Water House Coopers study. This research confirms that employees and the organizations they make up have neglected a fundamental reality of doing business- the health and wellness of employees has a major impact on productivity rates and your overall cost structure.
The American workplace is changing as the economy is experiencing a slow down and companies are forced to find ways to cut costs. Forbes.com had an article, The ROI of Wellness, I came across recently that stated a $1 investment in wellness incentive award programs saves $3 in healthcare costs. With a 3-two-1 investment ratio or ROI of wellness incentives, human resource managers have found a way to increase the productivity of employees by decreasing the occurrence of absenteeism and presenteeism (occurs when workers are present at work but are not working at full capacity due to health and life issue distractions) through wellness incentive programs.
Although the tangible costs of absenteeism are easily calculated, the costs of presenteeism are more difficult to track. Ryann Acton, author of Wellness Programs Generate Return on Investment, estimates that “annually employers spend $136 per employee for stress, $70 per employee for weight issues, $44 per employee for tobacco use, and $29 [per employee] for glucose problems.”
With so many unhealthy habits to lose and lifestyle merchandise awards to gain, employees at more than half of multinational companies worldwide are expected to be involved in some type of wellness incentive program over the next five years according to another Price Water House Coopers survey from 2006. The survey recommended that “With the commitment of business leaders, workplace wellness strategies and collaboration of public-private partnerships, the epidemic of chronic disease can be managed effectively.”
The results of implementing an employee health and wellness program can be staggering. Julie Jacobs,American Medical Association writer, discussed a case study in which after one year of a corporate wellness program, medical claims dropped by $225 per employee. The program also achieved over 90% participation rate. Considering that in 2005 alone the United States spent $2 trillion or 18% of the national GDP on healthcare, and that employers paid more than one third of these costs, the time for organizations to implement wellness incentives as a means to save on healthcare costs is now. Please see the two previous posts for more information on Tips for Successful Wellness Programs and How to Inspire Employees with Wellness Incentive Awards.
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