2009/2010 North American Staying@Work Report: The Health and Productivity Advantage

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Despite numerous cuts to HR programs and financial challenges facing employers in this unprecedented economic environment, a large number of U.S. and Canadian companies remain committed to programs aimed at improving their workers’ health and productivity (H&P). Lessons can be learned from both sides of the border to improve employee health, combat presenteeism and reduce lost time from work. Leading companies believe in identifying the root causes of health care cost increases and productivity erosion and are strengthening the link between health and employee effectiveness.

The findings document essential programs that can help organizations in North America connect health improvement with worker effectiveness and workplace stress. Companies with effective H&P programs are also more likely to have lower health care costs, lower levels of presenteeism, fewer lost days due to disabilities and lower levels of turnover relative to their industry peers.

This year’s findings show companies are at a critical juncture. The pressure to reduce benefit budgets, especially health care costs, will likely continue. With a significant increase in utilization of programs — health care, disability and employee assistance programs were reported up over 35% or more — companies will need to focus on those programs that generate the greatest returns as well as communicate to senior leadership how and why they pay off. There are lessons to be learned from the highly effective companies: they have stronger balance sheets, lower benefit costs and higher workforce effectiveness. The research results show that companies that get it right have a significant financial and human capital advantage.

Key Findings:

• The H&P Advantage. Overall, organizations continue to show a strong commitment to health and productivity. More than two-thirds of companies have added or enhanced their existing programs or expect to do so in the next year. More than three-quarters of companies have already improved or plan to improve their H&P program communication and enhance worksite programs. This commitment is even stronger for companies with highly effective H&P programs. They are 50% more likely to indicate their organization has added or enhanced its worksite H&P programs, or plans to do so, than low-effectiveness companies. In addition, low-effectiveness companies are 2.5 times more likely to indicate a significant decrease in their H&P budget than high-effectiveness companies.
   
• The Financial Advantage. Companies with the most effective H&P programs experienced superior human capital and financial outcomes: 11% higher revenue per employee, lower medical trends by 1.2 percentage points, 1.8 fewer days absent per employee and 28% higher shareholder returns. High-H&P-effectiveness companies are also more likely to have lower health care costs, lower levels of presenteeism, fewer lost days due to disabilities and lower levels of turnover relative to their industry peers.
   
• Health and Employee Effectiveness. The link between healthy and productive employees goes beyond the physical and mental health of individuals to creating a healthy work environment. The most effective H&P organizations are more likely than other organizations to score highly in the areas of rewards, organizational leadership and effective communication, which contribute to overall employee effectiveness.
   
• The North American Distinction. Canadian organizations have more programs for managing absence, disability and stress at the workplace, whereas companies in the United States are more focused on health promotion and health management programs.
   
• Higher Program Use. Companies are struggling during the economic slowdown with swelling health care utilization. Forty percent of respondents report higher use of the health care plan, 35% cite a higher incidence of disability claims and nearly half of respondents indicate a marked increase in the use of employee assistance programs.
   
• The Stress Impact. Excessive work hours (75%), lack of work/life balance (65%) and fears about job loss (64%) are the foremost sources of stress affecting organizations today. Significant gaps, however, exist in companies’ actions to reduce these stressors, as only 24% of companies are taking actions to address excessive workloads, 40% are acting on work/life balance and 42% are addressing fears about job loss.
   
• Leadership Matters. Companies with the most effective H&P programs have strong commitment from senior managers who regularly communicate the importance of a healthy lifestyle, volunteer to be health champions and provide adequate budgets to support the H&P programs.