Benefits of Workplace Health Programs

Workplace health programs are having their day in the sun, and for good reason.

We know that healthy workers (employees with 1 or no modifiable risk factors for chronic illness) take 9 times less sick days, are 3 times more productive, and 3 times less likely to file a workers compensation claim than their unhealthy counterparts (employees with 3 or more modifiable risk factors for chronic illness).

We also know that employees who are actively engaged in a workplace wellness program are 88% more likely to recommend their employer to a friend and 4x less likely to leave their employer in the next 12 months. So, if we can take workers from one end of the spectrum to the other, our staffing costs are going to plummet.

Further to this, there is a great deal of data showing the positive return on investment when wellness programs are run correctly. A meta-analysis of Australian workplace health programs showed that on average, wellness programs returned $5.81 per $1 spent, and a Harvard Business Review reported that health programs on average return between $2.27-$6 per dollar spent.

Beyond all of these tangible and observable benefits, there is also a great deal of bleed through from a culture of health into increased profits. 

A study was done in the US that looked at the companies that either won or scored highly on the Corporate Health Achievement award, which was established in 1995 by the American College of Occupational and Environmental Medicine to “recognize the healthiest, safest companies and organizations in North America.” 

What they found is that the companies who had won, or scored highly in, the award had outperformed the S&P by 3 times. These gains can not be explained solely by looking at the cost savings. There has to be something else going on in the companies that truly consider health and safety to be a priority.

The prevailing theory is that by creating an environment where workers feel appreciated, supported and cared for, these companies are creating a sense of commitment and reciprocity. A place where employees want to give their best, because they believe they get that back.

In short, companies who look after their workers, get looked after by their workers, and that just makes good business sense. 

Let’s take a look at why companies are seeing these sorts of savings and return on their investment.

Good will

Companies have a duty of care and a responsibility to look after not only the safety of workers on the job, but their health as well, and to be seen to be doing it. This raises the good will of the company in the eyes of their staff, their customers, their investors and the community. We’re moving towards a more ethical standard of operation and the companies who don’t look after or, much worse, mistreat their workers, will be left behind by the market. 

Increased employee engagement

Employees who feel engaged and cared for by their employers produce more work at a higher standard than those who do not. One study found that workers who felt engaged and inspired were up to 125% more productive than those who felt satisfied in their work but unengaged. We know that these days money is not enough to satisfy people, and rightly so. They need something else. They need to feel like the workplace that they contribute so much time and energy to actually cares about them. When people feel this, it creates a feeling of reciprocity, where they develop the need to give back to the company, rather than take everything they can get. This is one of the reasons why money is a poor motivator. If you increase the salary of an employee, you get a temporary bump in productivity, if that salary increase is seen as sufficient, but then output tends to plateau back to previous levels when the increase becomes the expected, and they look for more money, because that’s the reward system that has been established. Monetary rewards are inconsistent and expensive. Give people a reason to care about your company beyond the money you pay them and you will create an engaged workforce. 

Increased productivity

We know that healthy employees, that is those with 1 or fewer chronic disease risk factors, are up to 3 x more productive than their unhealthy counterparts (which are those with 3 or more chronic disease risk factors), and this makes perfect sense. In the same way that race car drivers need to be in top physical condition to deal with the mental pressure of concentrating so hard for a long period of time, so do your employees. The fitter and healthier they are, the less energy they will have to expend for a better outcome. 

Unhealthy employees have to battle for every ounce of energy they give, whereas your healthiest come by this energy easily. Increase health, increase productivity. It’s simple. 

Decreased absenteeism

We know from the research that the healthiest employees take the fewest days off, typically between 1-3 days per year, and the unhealthiest take the most, up to an average of 18 per year. Considering that the national unplanned absenteeism days has grown to an average of 12.3 days pp/pa in many industries and 9.8 across all industries, this paints a damning picture of the health of our workforce. We know that stress, sickness and chronic disease risk factors are the chief contributors to unplanned absenteeism, so If you can decrease these things, you greatly decrease the amount of time employees spend out of work. A study conducted by the International journal of occupational health and environmental medicine also found that workers with 2 or more chronic diseases, which is around ⅓ of people, take 2.5 x longer absences when they are off sick than their healthy counterparts. This shows us that healthy people might get the occasional cold and be off for a day or 2 a year, but unhealthy people get sick more often and require longer absences, typically to manage the symptoms of chronic disease. In addition to this, a study conducted by Price Waterhouse Coopers found that employees who consider their workplace to be mentally unhealthy took 4x as many unplanned absences as workers who consider the environment to be mentally healthy. The evidence on this is clear. Healthy people take less time off and cost considerably less to manage than unhealthy people. This doesn’t mean that we should only hire healthy people, but it does mean that we should be trying to actively improve the health of all people within an organisation.

Decreased workers compensation costs

Workers compensation costs are on the rise, and mental health claims are leading the charge. Mental health claims are now the number one claim by disease, and have an average of 17.3 weeks of absence from work, with work-related stress being a contributing factor in 91% of these cases. Physical health claims, by comparison, have an average of 5.3 weeks. 

The total cost of physical compensation claims is estimated by Safe Work Australia to be $124k per claim, whilst mental health is $342k. This is a shared cost between employers, insurers, communities, and workers, with workers bearing the majority of this burden. 

When you consider that unhealthy workers are 3x more likely to file a compensation claim than healthy workers, having an unhealthy workforce is like a ticking time bomb.

Decreased turnover

Studies are showing us that the majority of workers say that an effective workplace health program is a factor that would attract them to, or keep them in, a role, and that healthy and engaged workers are 4x less likely to leave their employer in the next 12 months. We know that, according to the Australian Human Resources Institute, the cost of turning over one staff member is anywhere between 75-150% of their annual salary. When you consider that the average turnover rate is 18% across all industries, this becomes an enormous figure.

Create a culture of health

This is one of our primary goals when looking at workplace health programs. By creating a culture of health, we not only improve the health of employees through standard work practices, but we are creating an environment where employees feel safe and supported. We know that poor company culture is the primary reason that employees leave, and is a major contributor to work-related stress, so creating this culture of health is crucial in the success of your program, and the success of your company long-term. 

Flow on effect

When we improve the health of one person, it has a flow on effect to those around them. We know that if a close contact of yours, a friend, a sibling or spouse, becomes obese, that your risk of becoming obese increases by 57%, but the reverse is also true. If we can change the health behaviours of staff, their family and friends are more likely to adopt those same behaviours, reinforcing the original behaviour and creating a positive health cycle. In this way, we are not only improving the health of employees, but of their families and the community as a whole. This feeds back into the culture of health that we are aiming to create. If enough workplaces actively participate in these programs, we can ultimately change the health of the nation, which is something that is sorely needed.

The benefits of properly run workplace health and wellness programs are well-documented and plain to see.

It just takes the foresight and commitment to realise them, and the more companies that introduce them, the better off we will all be. 

At Kinex Health we literally wrote the book on Workplace Wellness programs, and we design and implement them for companies everyday. So, if you would like the experts to do it for you, give us a call. We’re here to help. If you’re keen to run one yourself but don’t know where to start, or if your current program isn’t getting the results you want, check out our Workplace Wellness Blueprint course.