multinational workforce health: challenges and prescriptions for success

© 2010 Towers Watson. All rights reserved.

Global Health for Multinationals:Challenges and Prescriptions for Success

A OneWorld presentation by Nicole Serfontein andFrancis Coleman

May 26, 2010

© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

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Nicole has worked in New York, London and South Africa, where she was a practicing attorney in the commercial and financial services industry. She has consulted on health insurance and related matters for many multinational companies, government and plan trustees, and was appointed in 2003 by the Minister of Finance in South Africa to the South African Financial Services Board to draft and comment on regulations to the Financial Services Advisory Act.

Nicole Serfontein is a senior international consultant for Towers Watson, based in Washington, D.C.

Today’s experts

Associatephotohere

Francis has more than 20 years of international benefit experience and has served in a number of different management roles and assignments worldwide, including in the U.K., France, Greece, Eastern Europe and the U.S.

Francis Coleman is a director in Towers Watson’s International Consulting Group and is based in the company’s Los Angeles office.


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Today’s discussion

Global health: The significance for global employers

Employee health programs: Prevalence and global reach

Program governance

Issues and strategies

Ingredients for success


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Global health continues to grow as an important topic for global employers

Offshore workforce strategies continue to increase

Public health systems are inadequate in many countries, and high-quality health care benefits and/or services can create a competitive advantage in the war for talent

Leadership recognizes the value of health and that governance will provide a consistent approach to health care across geographies

Vendors are starting to globalize their services/products

Health care regulation is growing in volume and complexity around the globe, forcing large multinationals to react


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TW continues to research and build on our database of global health risks, costs and medical intervention programs

Global Medical Trends Report

Country surveys, e.g., Health Care Benefits in India

Global Health Care Cost Survey

Global Benefits Benchmarking Database


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Health care trends and issues are transcending local country borders

Demographics

Technology

Disease Changes

Globalization

Consumerism

Definition of Health

Care

Governance

LargeGlobal

Employers


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About the survey

The survey included human resource and health and wellness executives in North America, Europe and Asia, and was conducted online between November and December 2009 Participation was limited to organizations with at least 500 employees and

significant business operations in more than one country

A total of 106 qualified participants completed the survey Titles of respondents: director of HR operations; director of global benefits;

global benefits manager; global head, human resources; senior director, global compensation and benefits; senior vice president, HR; team lead, health and welfare

All percentages are based on 106 respondents unless otherwise specified

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Employee Health Programs: Prevalence and Global Reach

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Global reach: Operations and employee health programs

Number of Countries Where Company Has Significant

Business Operations

Number of Countries Where Employee Health Programs

Are Offered

Average number of countries where employee health programs

are offered: 12

Average number of countries where company has significant

business operations: 20

34%

32%

34%

20 countries or more

5-19 countries

2-4 countries

One country

6%

16%

41%

37%

Source: Towers Watson Workforce Health Strategies: A Multinational Perspective


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Respondents have, on average, 25 employee health programs across their operations

Number of Employee Health Programs Companies Have Around the World

Average number of employee health programs: 25

13%

1%

45%

24%

17% 10 or fewer

11-25

26-50

51-100

More than 100



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Most companies have medical programs and pandemic preparedness in virtually all countries of operation

Number of Countries Where Employee Health Programs Are Offered in Lieu of or in Addition to Publicly Provided Programs

75%

42%

77%

23%

55%

23%

2%

3%

All/Most countries Some/Few countries No countries

Pandemic preparedness

Medical/health benefits

Wellness/health promotion programs



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Respondents have robust medical programs in virtually all countries of operation

Number of Countries Where Medical/Health Benefits Are Offered

25%

25%

40%

74%

75%

77%

77%

79%

80%

83%

57%

63%

56%

25%

25%

21%

23%

21%

20%

17%

18%

12%

4%

1%

2%

Health risk assessment (HRA)

Disease management

Case management

Short-term disability

Long-term disability

Physician care

Prescription drugs

Maternity

Hospital — outpatient

Hospital — inpatient




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Wellness/health promotion programs have been implemented in some countries

Number of Countries Where Wellness/Health Promotion Programs Are Offered

25%

32%

33%

34%

45%

46%

64%

58%

63%

65%

51%

50%

11%

10%

4%

4%

4%

1%


Vaccinations

Health screening

Employee assistance program (EAP)

Health promotion

Behavioral health

Health risk assessment



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A majority of participants have pandemic preparedness programs in most countries

68%

70%

78%

24%

20%

20%

8%

10%

2%

Number of Countries Where Pandemic Preparedness Programs Are Offered


Ready access to medical supplies, hospitals, clinics as required

Employee alert systems,communications

Evacuation processes


Program Governance

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Governance models vary: Global guidance with local decision making is most prevalent

How Employee Health Benefits Are Managed Within Organizations

2%

17%

27%

41%

13%Completely

decentralized; managed purely at the local level

Other

Corporate/regional guidance, but decisions made at the local level

Completely centralized; all decisions made by

corporate headquarters

Varies by type of health program or by country



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Respondents keep a global watch on the following metrics

Workforce Health-Related Metrics Monitored Around the World From Corporate/Regional Headquarters

0%

25%

27%

27%

59%

63%

70%

71%

78%

79%

Other

Employee health status and risks

Employee well-being

Costs of employee absenteeism

Employee engagement

Key developments in your environment

Competitive trends in benefits and human resources

Changes to employee health programs

Costs of employee health programs



Issues and Strategies

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About one in four respondents has an employee health strategy today, with an equal number planning to develop a strategy by 2012

Organizations That Have a Documented Employee Health Strategy

20%

28%

26%

16%

10%

Not considering

Currently have a documented global strategy

Have a global strategy, but not documented

Plan to have a global strategy in place by 2012

Considering developing a global strategy



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Stress, aging workforces and chronic conditions are top cost and productivity challenges

Impact of Health Issues on Health Care Costs and Workforce Productivity

12%

16%

21%

25%

28%

37%

39%

40%

55%

32%

30%

20%

32%

38%

26%

38%

40%

28%

56%

54%

59%

43%

34%

37%

23%

20%

17%

Increased prevalence of infectious diseases

Negative workplace culture

Accidents on the job/safety

Tobacco use

Poor nutrition

Increased prevalence of obesity

Increased prevalence of chronic conditions

Aging workforce

Stress

High impact Moderate impact Minor/No impact



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Health program costs are a concern for more companies than absenteeism costs

How Costs of Employee Absenteeism and Costs to Provide Employee Health Programs Compare With Those of Industry Peers/Competitors

18%

28%

55%

63%

27%

9%

Lower About the same Higher


Costs to provide employee health programs



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Implementation challenges still exist, with cost information and service gaps topping the list

Difficulties Implementing Employee Health Programs in Countries Where There Are Significant Business Operations

32%

39%

44%

51%

Cost information is not available or reliable

Health care products/services are not available

Desired health care vendors are not present in the marketplace

Available health care vendors do not have capacity



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Most health strategies aim to address critical talent management issues but fall short of meeting objectives

Importance of Employee Health Strategy Objectives and the Extent to Which Health Programs Meet These Objectives

44%

44%

56%

21%

30%

36%

55%

27%

60%

32%

45%

43%

45%

28%

33%

39%

41%

41%

51%

64%

67%

69%

70%

70%

81%

83%

Supplement public health system

Improve workplace conditions

Increase employee access to health care

Improve quality of health care

Reduce presenteeism costs

Reduce absenteeism costs

Demonstrate interest in employee well-being

Increase employee engagement

Provide competitive rewards (remuneration) package

Increase productivity

Ensure business continuity

Contain/reduce the organization’s health care costs

Retain key talent

Absolutely critical/High importance Completely/Mostly met objectives



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Controlling costs, addressing health risks and incenting healthy behaviors are top priorities

Top Priorities for Employee Health and Wellness

9%

15%

15%

18%

62%

69%

85%Controlling costs of employee health programs

Other

Addressing emerging health risks

Providing incentive programs to improve employee health/wellness

Improving pandemic preparedness

Expanding health coverage to more/all employees

Increasing quality of health care


Ingredients for Success

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Successful companies are more likely to have a global health strategy than less successful ones

Documented Employee Health Strategy — Successful vs. Less Successful Companies

32%

29%

29%

3%

7%

6%

28%

22%

22%

22%

Successful companies Less successful companies

Currently have a documented global strategy

Not considering

Have a global strategy, but not documented

Plan to have a global strategy in place by 2012

Considering developing a global strategy

Successful companies have health benefit programs that are meeting six or more of the health strategy objectives they consider important. Less successful companies have health benefit programs that are meeting two or fewer health strategy objectives.



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Measurement disciplines are likely to be a key driver of success

Workforce Health-Related Metrics Monitored Around the World bySuccessful vs. Less Successful Companies

11%

9%

6%

34%

37%

60%

46%

66%

51%

31%

33%

36%

67%

67%

69%

75%

78%

86%


Employee well-being

Employee health status and risks

Employee engagement

Key developments in your environment

Changes to employee health programs

Competitive trends in benefits and human resources


Costs of employee health programs




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Successful companies are turning their focus to leading indicators and not responding to cost only

6%

22%

19%

66%

94%

53%

14%

9%

17%

66%

77%

80%

Top Priorities for Employee Health and Wellness for Successful vs. Less Successful Companies

Addressing emerging health risks


Increasing quality of health care

Controlling costs of employee health programs

Providing incentive programs to improve employee health/wellness

Improving pandemic preparedness

Expanding health coverage to more/all employees



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The survey’s key findings suggest that:

It’s important to have a global strategy Sponsorship by senior leadership is critical

Local adaptation

Governance approaches should include local/regional involvement

Health is considered holistically A full suite of health management programs

Measurement Not just ROI (behavior change/productivity/well-being/engagement etc.)


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Contact details

Francis Coleman

[email protected]

JP Provost [email protected]

Nicole Serfontein [email protected]

multinational workforce health: challenges and prescriptions for success

Health & Medicine