Ongoing research supports the benefits of workplace wellness programs as a proven health and productivity management strategy. For the small/medium-sized employer, the influence of wellness programs on health care spending may be negligible because of the type of health plan (e.g., fully funded rather than self-funded). However, the impact on productivity-related measures makes it indisputably (well) worth the investment.
1. Wish you were here – creating a company culture where employees feel valued.
Risk: High employee turnover. Small and medium sized companies have a much higher employee turnover rate than larger companies. What are the biggest factors affecting employee turnover in small business? The perception that employees view themselves as undervalued, feel they are not treated with respect and where there is a lack of teamwork in combination with low pay. The resources to train employees who may be gone within the year, in combination with the loss of productivity, represent an indirect expense that can significantly impact your bottom line.
Reward: A vibrant wellness program can be viewed as a powerful recruiting and retention tool and reinforces a healthy, supportive and productive work environment. By implementing a workplace wellness program, you distinguish your company as having a culture that cares for its employees. Remember, one of the key reasons employees leave is because they don’t feel valued.
While the exact cost of turnover is difficult to estimate, it’s clear those costs are significant and that a business that enjoys higher employee retention rates is in a stronger position to survive and thrive over the long term.
2. It’s about productivity…Genius.
Risk – Low employee productivity is the sum of absenteeism, disability and presenteeism. The productivity-related costs of poor employee health are far greater than direct medical costs to employers. Loss of productivity will impact your organization’s work output substantially. This negative impact is driven not only via the effects of common chronic health conditions like asthma, diabetes and heart disease on employee productivity, but lifestyle-related risks including tobacco use, obesity and low physical activity as well.
Absenteeism: (e.g., sick days, long or short term disability) When you’ve only got a small number of employees and a few are absent for illness or disability, even for a couple of days, it can have a significant impact on productivity and overall company performance. Can the business operations of your company of say, 8 or 10 employees, weather a 20 to 25 percent absenteeism rate due to employee health issues?
Presenteeism: (at work but with reduced productivity) Compared to other cost drivers, presenteeism is a significant liability to company performance. Presenteeism refers to diminished on-the-job performance due to impairment by health risk factors, health problems, tobacco use, or work/life issues. Unmanaged, presenteeism will reduce company productivity considerably. What would be the ongoing impact to organizational output (and quality) if your employees’ on-the-job productivity were reduced 10 to 30 percent because of health risks (e.g., obesity, stress) or health status (e.g., diabetes, migraine)?
Reward: Health and productivity are inextricably linked, regardless of company size. Creating a healthier workforce that feel more valued positively affects productivity, company culture, reduces employee attrition, and lowers direct and indirect costs.
3. Low risk investment = higher yield performance = increased bottom line
Risk: Indirect cost benefits: Small/medium-sized employers have limited influence on their direct medical costs because their health premiums are affected by the insurer’s experience with all covered employers within a particular health plan. However, they can have a significant influence on controlling productivity-related costs (e.g., so-called “indirect costs”) associated with poor health status. Ongoing research has documented that these indirect costs (which include absenteeism, disability, and presenteeism) , can be two to three times the direct medical costs.
Reward: Wellness programs have been shown to substantially reduce not only direct medical costs, but also indirect costs in companies of all sizes. While it’s difficult for small/medium-sized business owners to control escalating health premiums, they can have a considerable influence on controlling productivity-related costs associated with sick days, disability, lost days due to workers’ compensation claims, on-the-job impairment (e.g., presenteeism) and employee attrition by encouraging and supporting a healthy workforce.
Call to Action: Take the first step: If you are a small or medium-sized business, understand the right time to start your workplace wellness program is today. You can search for the perfect tools, methodology and evaluation measure along the way.
The empirical, cost analysis data can and should be measured. But in the meantime, start with a conversation. Ask your employees three simple questions that have the power to transform and grow your small or medium-sized company culture, productivity and bottom line.
- What do we need to do to get and stay well at work?
- How can we do it together?
- How will we make it fun?
To schedule a free workplace wellness strategy consultation CONTACT ME.