Health and productivity Featured

7:00pm EDT January 29, 2008

Employers are reinventing their wellness programs into comprehensive health and productivity (H&P) programs for a very good reason — improved profits. A recent study conducted by Watson Wyatt Worldwide of 355 human resources and health benefits managers at U.S. organizations with at least 1,000 employees reveals that the companies with the most effective H&P programs acheived 20 percent more revenue per employee, 16.1 percent higher market value and 57 percent higher shareholder returns.

“Companies are embracing the progress that has been made in the health and productivity space,” says Caty Furco, office practice leader, Group and Health Care, for Watson Wyatt Worldwide, San Francisco. “Companies with effective H&P programs outperform other companies. Organizations that understand the linkage between effective programs and their company’s performance are ahead of the game. We are in an era that can have a positive impact on both business and employees, and that’s exciting.”

Smart Business spoke with Furco about what constitutes an effective H&P program.

What is the current thinking regarding H&P programs?

Global competition and pressure for greater efficiency are causing employers to seek new ways to help manage benefit costs and increase worker output Increasingly, companies are looking at the health of their workers as the new growth engine to stave off health care inflation and keep employees on the job and productive.

In addition to stronger revenue per employee, companies that have a strong H&P program were more effective at managing direct benefit costs. The philosophy behind the new H&P programs is that companies need to appeal to their entire range of employees in order to drive employee engagement toward improved health and productivity.

What drives employee engagement toward health and improved productivity?

A traditional siloed approach toward employee health and productivity is out; a holistic approach is in. What this means is that employee programs that support stress reduction, a healthy work environment, support for time off, management of chronic conditions, health education, on-the-job safety, health insurance and disability coverage are no longer viewed separately — they are combined and integrated into a single approach. Employees’ life experiences are not segmented, so benefits should be approached in a way that can provide the right services across the entire benefit and workplace continuum. A single access point makes it easier for employees to use the program. Creating incentives that inspire excitement and employee adoption rates are also part of the holistic approach. An integrated approach also gives the company a single data repository, so it can use the information to refine its offerings and construct effective employee incentive programs. A lack of actionable data was one of the barriers to H&P effectiveness as cited in our study, so a single data repository is a plus.

What constitutes an effective H&P program framework?

An effective H&P strategy goes beyond simply adding more programs; it integrates prevention (at home and work), manages health and provides incentives for behavioral change. Our survey identifies that the top three elements for an effective H&P framework include: employee engagement driven through the use of incentives and communication; appropriate programs, including the use of technology; and a way to measure and continuously improve the results.

A single technology intake from a user perspective makes it easy for employees to do everything from recording a sick day to signing up for an education program; on the back end, the technology tracks utilization, membership and ROI, and provides an integrated set of data analytics. Naturally, the one constant throughout the framework is communication. The more the program is communicated, the greater the results. H&P must become part of a company’s corporate culture and new reality of how business is run.

Will an H&P program be costly?

A best-in-class H&P program does not have to be expensive to be effective. It’s important for each program to uniquely reflect the culture of the organization and its employees. Monetary incentives as low as $50 for weight reduction or smoking cessation can often catch the attention of employees, and doing something as simple as waiving co-pays on drugs used to manage chronic illnesses may be enough to encourage employees to take those drugs consistently and manage their conditions. While we can look at the results and the H&P framework used by other companies and learn from them, the best design is one uniquely tailored to that organization, and it’s not necessary to keep up with leading-edge inventions to be successful.

How quickly can CEOs expect results after installing an H&P program?

A successful H&P program will produce results over time because you are changing employee behaviors. While deploying these concepts and programs won’t necessarily produce immediate results, the numbers in the survey should be incentive enough to begin and sustain the journey.

CATY FURCO is the office practice leader for Group and Health Care Practice of Watson Wyatt Worldwide for Northern California. Reach her at caty.furco@watsonwyatt.com or (415)733-4309.