Health is wealth: A healthy workforce equals a healthy bottom line
David Woods, June 24, 2011
'Good health is good business.' These words were put to the Government in 2008 in Dame Carol Black’s report, Working for a Healthier Tomorrow.
Moving to remedy illness and absenteeism in 'sick-note Britain', Black accepted there was a 'lack of a well-developed business case as to why employers should invest in wellbeing initiatives'. At one fell swoop, the good Dame forced workplace wellbeing onto the Government agenda and for that she is to be applauded. But over the past three years, how much has changed? Was there a surge in employee wellbeing?
Pamela Gellatly, CEO of healthcare risk management consultancy Healthcare RM, thinks not. She explains: "The problem with healthcare is that the industry traditionally operates in silos. Providers sell in silos and employers buy in silos.
"The HR, health and safety and occupational health departments are not always working together, all purchasing products to meet their needs. They are treating the symptoms of workplace ill-health, but not the causes."
Peter Mills, director and founder of wellbeing consultancy Glasslyn, agrees: "Black has raised awareness of the issues - but we are not reinventing the wheel. I have been talking about the importance of wellbeing strategies for 11 years.
"Companies such as Goldman Sachs and O2 have inte-grated healthcare offerings in place, but the majority of organisations are not strategic - and when it comes to healthcare strategy, the UK is lagging behind the US."
HRDs know wellbeing contributes to a healthy, happy, motivated and engaged workforce, lowering absence, keeping stress levels down - and arguably helping to retain employees.
In its whitepaper, Healthy Lives, Healthy People, the Government admitted 'being in work leads to better physical and mental health, and reducing working-age ill-health could save the UK up to £100 billion every year'.
The whitepaper says the Government is committed to changing adults' behaviour towards wellbeing, as this could reduce premature death and illness, avoiding a substantial proportion of cancers, vascular dementias and circulatory diseases. This is turn would save the NHS the £2.7 billion cost of alcohol abuse, not to mention the £13.9 billion a year spent on tackling drug-fuelled crime.
The Government has pledged to make it 'pay to work'. It plans to collaborate with business and the voluntary sector through the 'Public Health Responsibility Deal' launched in March, with networks on food, alcohol, physical activity, health at work and behaviour change.
The Government has also said it will 'support ownership of a new public health system. The DoH will take forward work with relevant organisations, seeking their help and expertise in developing proposals that work in practice.'
Two years on, Black is back. In February, the Government announced it was to commission an independent review of workplace sickness absence and Black is leading this.
The review will be sponsored jointly by the Department for Work and Pensions (DWP) and the Department for Business, Innovation and Skills (BIS). It will explore how the sickness absence system could be changed to help people stay in work, reduce and share costs for the taxpayer and businesses and contribute to economic growth. It will also examine whether the balance of these costs is appropriately shared between individuals, employers and the state.
According to the 2011 Aviva Health of the Workplace 4 Study, employees are reluctant to put their health into the hands of their employer. Only 4% UK of staff say they would approach their boss with a health concern; 1% said they would trust their problems to the HR department.
The research reveals a worrying distance between employer and employee, where 21% of employees think admitting to health concerns could affect their work prospects and 11% claim they simply don't trust their boss.
Experts say a more holistic strategy to workplace wellbeing is the best approach to engage employees with their health. Ben Moss, MD of workplace wellbeing consultancy Robertson Cooper, explains: "When clients ask us how to get to grips with wellbeing, we talk about getting the 'six essentials of workplace wellbeing' right: resources and communications; control; job security; work-life balance with a balanced workload; work relationships; and good job conditions. With these in place, you create high levels of psychological wellbeing and a strong sense of purpose as measurable outcomes - from which individual and organisational benefits flow.
"We will need to remember to maintain these areas as priorities when things do turn around. Psychological wellbeing is not just for bad times - it is important during good times too. "Those brave enough to take on the challenge will come out of the dip more quickly and have greater built-in strength to overcome future challenges," says Moss. But employers can't consider healthcare without looking at the situation arising in the NHS. Mills explains: "Economically, we are in a desperate situation. Public spending has to be reduced and that includes health. Headcount cuts will happen and it's inevitable there will be cuts to frontline services. From an employer point of view, this will make healthcare a more attractive benefit."
In the US, mailing and software company Pitney Bowes has received acclaim for its wellbeing strategy - lowering staff absence and reducing costs. Last year, CEO Michael Critelli met US president Obama as part of a review of US healthcare.
But the rewards didn't come without an investment. For example, Pitney Bowes provides US employees with health screenings, has a health clinic at its HQ, provides flu vaccines for all employees and subsidised - or even free - pharmaceuticals, as part of a broad, preventative healthcare policy.
Investment in the HQ clinic has seen a return of $2.3 for every $1 spent, as a result of reduced absenteeism, disability and long-term sickness.
Speaking to HR magazine, Johnna Torsone, chief HRO at Pitney Bowes, explains: "This is something we have been working on for 10 years. It involved a lot of analytical work. We wanted to remove barriers and change employee behaviour to make for healthier staff. We took a holistic approach."
While Torsone admits she had to keep to a budget, she adds: "In the past, employers put cost before strategy and lost sight of what they were trying to do."
In the US, employees do not have the same state-provided health service as their UK counterparts, but Torsone advises her UK peers: "Even if there is a national health service, you end up paying for sickness - either through absenteeism or tax. Employers need to implement a wellbeing system, to put the onus on the individual to look after their health, rather than a sickness system, to pay for them when they are ill."
One example of a UK organisation reaping the strategic benefits of healthcare is travel firm TUI. In October, it appointed Healthcare RM to integrate all existing healthcare management services and to plug any gaps in provision. This joined-up approach enabled TUI to incorporate all its employee healthcare benefits, initiatives and legal obligations in one package. TUI's global reward director David House is proud of the achievement: "We expect it to pay for itself within a year. Normally employers run healthcare benefits in isolation, but we have mitigated costs by combining them."
He issues a note of warning to his non-strategic peers. "Employers without a strategy need to rethink - they are not getting any bang for their buck. Medical expenses are rising and if you do not proactively manage this, you will see your costs getting significantly higher over the next few years."
Case study:Rodda's Creamery
Rodda's Creamery in Cornwall is an example of a small business successfully adopting the fit-note culture - and proving wellbeing strategy doesn't need to break the bank.
The company offers employers and employees flexibility, encouraging staff who have been off work to return to the workplace, such as by varied working hours or a phased return.
One of the aims is to break down the barriers and misunderstandings that sickness leave can engender.
Rodda's reforms have caught the attention of Dame Carol Black, former UK national director for health and work. She has been collaborating with the creamery to assess the impact of the changes on the wellbeing of the company's workforce. Rodda's is optimistic about the success of the programme and the positive implications for the employees of this traditional, family-run business.
Managing director Nicholas Rodda explains: "Our employees are at the heart of our family business. It makes good commercial sense to ensure that, whenever possible, the people who make up our company are happy and healthy."
Rodda's was the first factory in Cornwall and the Isles of Scilly to receive a Gold Healthy Workplace Award earlier this year. This prestigious award recognises excellence in areas such as mental wellbeing, reduced stress and healthier eating within a company's workforce.
Innovations such as six-monthly health checks, 24-hour counselling facilities, social events and free fruit are also in place at the company.