putting "human" back in human resources
DESCRIPTION
The direct and indirect costs associated with Employee Health & Happiness has shifted Employee Wellness from voluntary benefit to Strategic Imperative. HR is on the front lines of this fight. Are you ready? Employee Health & Happiness lives at the intersection of employee's personal goals and employer's financial ones. Recruiting, developing, and retaining talent is no longer enough to remain competitive. Companies now have to find a way to keep their employees, healthy, happy, and engaged. This shift means that Employee Wellness is now part of the Talent Management Lifecycle and HR has to shift their role from Human Capital Management to Chief Wellness Officer.TRANSCRIPT
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HR’s Role in Employee Wellness
Putting Human Back In Human Resources
01
As odd as it may seem, this was exactly the news that
came out of a recent survey on corporate sustainability.
The combination of direct and indirect costs associated
with employee health and happiness has gotten so great
that executives participating in the CoreNet Global/Jones
Lang La Salle Sustainability Survey revealed that employee
health, satisfaction and productivity outranked energy
costs and real estate as top concerns in 2010.(1) You see,
in a world of rapidly increasing health costs and rapidly
In what can only be described as a bizarre turn of events, it would appear that doughnuts and soda have become more expensive than real estate and electricity.
Ben Franklin would be so confused.
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02
decreasing employee engagement,
a company’s sustainable competitive
advantage (or lack thereof) will be a
result of their ability to
positively impact the
health and happiness of
its employees.
Given this trend,
employers increasingly
turn their cost-cutting,
happy-making attentions
towards employee
wellness programs.
Let’s face it, wellness
programs are neither
novel nor new. Whether
it be an Employee Assistance Program
(EAP), a health “portal” on the company
intranet or an employer-sponsored
walk-a-thon, your company has spent
and will continue to spend time and
money attempting to impact employee
health. According to Human Resource
Executive, companies will increase
their wellness spend by 35% in the
coming year.(2) That, in short, is the
good news. The bad news is that
while companies are increasing their
wellness spend, more than half of
them still report that low participation
and engagement in wellness programs
is the number one obstacle to behavior
change. Put simply, companies are
admittedly spending more money on
things they know people aren’t using.
Try explaining that to the CFO.
Companies will increase their
wellness spend by
35% in the coming year.
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03
With total health expenditures at 16% of the U.S. GDP, it’s safe to say that Uncle Sam would appreciate it if we
quit spending so much time with Aunt Jemima.
At a time when 1 in 3 Americans is obese,(4)
you wouldn’t expect to hear good news
regarding our country’s health. Well,
depending on your perspective, that’s
exactly what the Journal of Occupational
& Environmental Medicine gave us when it
reported that 50-70% of healthcare costs
are attributed to lifestyle.(5) What’s so great
about that? Well, it means we can reverse
this trend by changing our behavior. Easy?
No. Doable? Absolutely.
Total Health Expenditure as a Share of Gross Domestic Product, U.S.
and Selected Countries (3)
This is clearly a race in which
the first place prize isn’t so
appealing.
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04
Most companies don’t consider Employee Health & Happiness part of the Talent Management Lifecycle.
That’s a huge problem.As a Human Resource professional, you’ve probably seen
1,000 versions of this diagram.
The utopian state
for any human-
capital-focused
organization
is comprised
of some
combination
of effective
recruiting,
developing,
evaluating and
compensating talent.
Do all of these things well and you probably compete well
versus your competition. Any of these areas start to suffer,
and you’re likely losing high performers and having
a hard time attracting new ones. However,
given that employer healthcare costs are
expected to increase 8.5% in 2012(6) and
that employee health and productivity are
directly connected (more on that later),
it’s safe to say that omitting employee
health & happiness from your talent
management “stack” is not a strategy
that will keep you competitive in the future.
Besides, what’s more “human” than helping
people get healthy?
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05
If one of HR’s roles is that of risk management, then the healthcare cost trend is a pretty significant risk. Manage away.
Healthcare CostsOn average, unhealthy workers cost employers
$11,176per active employee.(7)
Not only are costs going up for
employers but for employees as well.
According to Towers Watson, 73% of
companies will increase employees’
share of premiums in 2012.(7) Given
relatively flat wage increases, this
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06
means that many of your
employees will be taking
home less pay in the coming
year and what started out as
a conversation about health
costs has quickly become one
about compensation. Think
about this for a second —private sector employers
increased wages by 2.1% in 2011.(8) In 2012,
employer medical costs are scheduled to increase
by 8.5%.(6) By comparison, companies’ health costs
are increasing at a rate 270% greater than what
they’re paying their employees.
How much more is everyone paying for their healthcare than five years ago?
PricewaterhouseCooper’s Health Research Institute estimates that employer medical costs will increase by 8.5 percent in 2012. (6)
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07
The connection between employee health, engagement, productivity and costs is so great that maybe your company needs a Chief Wellness Officer.
Actively disengaged employees cost the U.S.
27% 54% 21% 58% 54%
for every $1 spent on
healthcare/pharma
for unhealthy
employees (10)
of employees plan
to leave when the
economy improves. (11)
of companies cite low
employee engagement
as the biggest obstacle
to behavior change. (14)
more likely that
engaged employees
will participate in
wellness programs (13)
of disengaged employees
report that work has a
negative impact on their
health. (12)
of employees are
actively engaged (11)
(9)
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08
If I wanted negative feedback, I’d call my doctor (or my in-laws).Herein lies the problem with many employee wellness
programs—negative feedback. Companies don’t understand
that the piece of information, data or feedback that keeps
someone training for a half marathon going that extra mile,
is the exact same thing that may keep your highest-risk
employees on the couch wondering, “Why do I even bother?”
If I’m unhealthy, I know that this “pie of death” contains
massive amounts of trans-fats, sugars, bad cholesterol,
chemicals I can’t spell, gluten I don’t need and likely isn’t
even remotely eco-friendly. I know I should be walking,
checking my blood sugar, staying on top of my blood
pressure and drinking eight glasses of water a day.
Reminding me of that just lets me know exactly how
unhealthy I am and how much I still want the pie in spite of
the needed life insurance adjustment.
If you want your employees to create healthy behaviors,
make wellness fun and make it positive. More on this later.
OMG!Don’t Eat
That
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09
Skinnier bottoms make for fatter bottom lines.
When is the last time a fellow employee gave you a
hug or high five? What about the CFO? Was it when you
implemented that goal management product? Or was it
the learning & development portal that you built? Probably
neither. And that’s unfortunate, because they’re both very
important and probably took a lot of your and your team’s
time and effort. Employee health and happiness is different,
though. There is nothing more personal, more emotional or
more human than helping employees get (and stay) healthy
and happy. Here’s the thing—it’s not charity work. It’s not
some altruistic HR initiative. It’s arguably the most strategic
initiative you can champion and it has direct, measurable
effects to your company’s top and bottom lines. Wellness
lives at the intersection of employees’ personal goals and
executives’ financial ones. What’s more “HR” than that?
less likely to lose
talent within one yearmore
productive
more likely
to be a best
performer
more likely to encourage
creativity and innovation
more likely to
have engaged
employees
According to The World Economic Forum,(15) when health and well-being are actively promoted, companies are:
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10
Pet insurance is a voluntary benefit. Employee wellness is a growth strategy. Sorry, Fido.
So, now what? What should you do next? First of all, lose
the mindset of wellness as a voluntary benefit. That’s not
saying that you have to make wellness programs compulsory
(though it’s a good idea), but if your company treats employee
wellness the same as concierge service, dry cleaning or pet
insurance, you’re not going to get real results.
Wellness is cultural, it’s strategic and it’s a
growth strategy.
Your company probably falls into one of two categories: (a)
you’re just starting to think about wellness programs or
(b) you’ve implemented programs and they either haven’t
worked or you’re looking for something fresh and different.
Lower costs?
Higher employee engagement?
Something fun for employees?
Trying to “treat” your highest-risk employees?
Attempting to keep healthy employees healthy for the long run?
Both?
In either case, here are some questions to ask:
What are your goals?
Who is this for?
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Questions (Continued)
Too passive?
Focused only on one population?
Lack of executive support?
Yes
No
Total costs?
Rate of increase/decrease?
Average age of employee population?
Ratio of high- to low-risk employees?
If you implemented something in the past, why didn’t it work?
Five Questions, five relatively easy answers. Completing some sort of “inventory” like this will help you build a business case for wellness and also help you determine what type of wellness program is right for your organization.
If you’d like more information, or need help building a case for wellness, feel free to contact us at [email protected] or on our website at www.keas.com.
Do you have executive support now?
How well do you understand your data?
11 Visit keas.com, call 415-537-7669, or email [email protected]
Endnotes1 “Employee Health, Productivity, Gain Importance in Sustainability Survey,”
CoreNet Global/Jones Lang LaSalle Sustainability Survey, National Real
Estate Investor, 14 February 2011, http://nreionline.com/brokernews/
greenbuildingnews/news/employee_health_survey_0214/
2 “Wellness Spend Up, But Measurement is Lacking,” Human Resource
Executive Online, 1 April 2011, http://www.hreonline.com/HRE/story.
jsp?storyId=533334568
3 “Health Care Spending in the United States and Selected OECD Countries,”
Kaiser Family Foundation, April 2011, http://www.kff.org/insurance/snapshot/
OECD042111.cfm
4 “Adult Obesity,” Centers for Disease Control and Prevention,
http://www.cdc.gov/obesity/data/adult.html
5 Whitmer R., Pelletier K., Anderson D., et.al, “A Wakeup Call for Corporate
America,” Journal of Occupational and Environmental Medicine, September
2003, abstract at http://www.the-hero.org/Research/Studies.htm
6 “Employer Medical Costs increase 8.5% in 2012,” PwC, 18 May 2011,
http://www.pwc.com/us/en/press-releases/2011/Employer-Medical-Costs-
Expected-to-Increase.jhtml
7 The Road Ahead: Shaping Health Care Strategy in a Post-Reform Environ-
ment, 16th Annual Towers Watson/National Business Group on Health
Employer Survey on Purchasing Value in Health Care, 2011.
8 “National Compensation Survey,” United States Bureau of Labor Statistics, http://
bls.gov/ncs/
9 “Dilbert Is Right, Says Gallup Study,” GALLUP Management Journal, 13 April 2006,
http://gmj.gallup.com/content/22381/dilbert-right-says-gallup-study.aspx
10 “Unhealthy Employees Cut Productivity, Study Finds,” Workforce, http://www.
workforce.com/section/benefits-compensation/feature/unhealthy-employees-cut-
productivity-study-finds/
11 Kevin Sheridan, “Top 2011 Employee Engagement Trends,” Monster Thinking, 10
January 2011, http://www.monsterthinking.com/2011/01/10/employee-engagement/
12 ”Gallup Study: Unhappy Workers Are Unhealthy Too,” GALLUP Management
Journal, 13 January 2005, http://gmj.gallup.com/content/14545/gallup-study-
unhappy-workers-unhealthy-too.aspx
13 Jennifer Robison, “The Business Case For Wellbeing,” GALLUP Management
Journal, 9 June 2010, http://gmj.gallup.com/content/139373/business-case-
wellbeing.aspx
14 “Boosting Employee Wellness Participation Without Breaking the Bank,” Towers
Watson, July 2010, http://www.towerswatson.com/research/2395
15 “The Wellness Imperative: Creating More Effective Organizations,” World Economic
Forum and Right Management, 27 January 2010, http://www.right.com/country-sites/
nz/news-and-events/press-releases/2010-press-releases/item5032.aspx
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