Productivity, Performance, Profits - Employee Health & the 3P's

When employers invest in the health of their Human Capital everyone wins. A new movement called Health and Productivity Management (HPM) is gaining considerable momentum worldwide providing exciting opportunities for Australian businesses.

For  years there has been a widely-held belief that healthy employees are more productive, less absent, and contribute positively to the workplace. This may go some way to explain the explosion in prevalence of corporate health programs across the Australian landscape over recent years - not to mention the need to attract and retain quality staff in a tightening labour market, and the management of increased health and injury risks associated with an ageing population.

However, it is not until recently that landmark Australian research has decisively concluded that poor employee health acts as a considerable cost to business having a direct impact on workplace performance, and that investments in evidence-based health management programs achieve positive financial returns averaging upwards of 4:1.

Consequently, workplace health has evolved, moving away from the ‘warm and fuzzy’ stigma to take on a stronger economic argument with quantifiable opportunities for bottom line improvements. With this in mind smart and successful organisations are striving to become leaders in their field by delivering integrated and measurable health and productivity management strategies to achieve employer of choice status, improved performance of staff and, ultimately, a healthy return on investment.

Enter the new world of ‘Health & Productivity Management (HPM).’

Australian Research

Research conducted by Medibank Private in 2005 in conjunction with the Harvard Medical School concluded that employees with poor health worked on average 49 effective hours per month compared with 143 effective hours per month for a worker of good health. This adds significant weight to the notion that  “Presenteeism” (i.e when an employee may be well enough to come to work but his or her productivity is reduced as a result of illness) can cut individual productivity by one-third or more and that it is, in fact, a much more costly problem than absenteeism.

More recent research showed on a macro level that presenteeism alone costs the Australian economy in excess of  $17.6 billion and up to 2.79% of GDP.

Of course, absenteeism is also a pressing issue. The Medibank study showed that employees exhibiting poor health behaviour are absent from work up to nine times more than healthy individuals. This clearly has a huge impact on lost productivity plus the intangible costs of replacement labour, additional workload on staff and associated cultural pressures.

The overwhelming message is that regardless of the yardstick, health risks – such as smoking, diabetes and high stress – directly impact an employee’s performance, and the higher the number of health risks present, the higher the level of absenteeism and the lower the productivity of an employee. On average, for every health risk an individual has their productivity decreased by 2.4%. So what can be done?

The role of HPM

The fact that these highly common yet costly health conditions are preventable offers organisations real opportunities for improved profitability through the pro-active management and prevention of illness amongst its Human Capital. This forms the basis of what HPM is all about with its major emphasis being on employee health and its relationship with productivity and absence.

Programs typically stem from preventative population-wide programs that assist those employees with health concerns to improve their health status whilst keeping those employees with low health risks low. This is good news for

profits with researchers demonstrating that when an employee improves their health status by just one health risk they will increase productivity on the job by

9 percent and reduce absenteeism by 2 percent.

Analysis of program efficacy has also led to refinements in program models, staff engagement strategies and measurement. The introduction of sophisticated tools such as Health Risk Appraisals (HRA’s) and work productivity measures such as Harvard’s Health & Productivity Questionnaire (HPQ) enables the clear quantification of program outcomes including employee health improvements and organisational return on investment.

The Future

With the emergence of the age of Human Capital, and the never-ending challenge for businesses to improve productivity, opportunities now exist to integrate an outcome-focused and measurable strategy that favourably supports employees, increases engagement whilst also contributing to increased profits.

For those businesses currently implementing corporate health programs now is the time to step up to the new measurable model of HPM. For those just entering this field the time is right to feel absolutely confident about investing in the health of your employees, and in doing so, achieve bottom line growth.

Source:  Australian Corporate Wellness magazine