Managing Employee Wellness As A Business Imperative

Refresh and refocus

Employee wellness programs have multiple benefits, both for employers and their employees if it is well designed and effectively managed. In fact, there is no question that the health and wellness of employees is a critical component of a thriving workplace, but the key is in evaluating what the actual business benefits of employee wellness programs are. Prior to investing in employee health promotion, employers are encouraged to consider how their efforts will be measured, monitored and evaluated. More importantly, they need to define the financial and non-financial objectives, target specific health risk conditions and set employee wellness program objectives that align with the organization’s human capital management strategy. 

Rather than holding employee wellness programs up as an employer of choice initiative, organizations should reposition them as human capital development strategies. Poorly designed initiatives usually focus on “flavor-of-the-month activities” that rightfully create awareness and educate employees, but it fails to address specific organizational risks or to capitalize on any organization development opportunities.

As a result, senior executives become skeptic about the actual value of employee wellness programs. They want to analyze the cost and calculate the return on investment (ROI) and the net present value (NPV) of employee wellness programs.

For them, it is important to quantify the effectiveness of disease, pre-disease, health and wellness management in relation to the medical and economic cost that include aspects such as productivity, turnover, replacements, absenteeism and presenteeism cost. Basically, senior executives want to follow an outcome-based approach that addresses specific regions, population groups, health risk conditions and job functions in order to measure the impact of the interventions and its effectiveness on various diseases or health risk conditions. In fairness, they are looking for the evidence, and the link, between the financial investment and improved work performance.

Before implementing an employee wellness program, and from a strategic human capital management perspective, organizations should first endeavor to develop a proper business case for employee wellness. In developing the business case, successful employee wellness programs set out to determine what the burden of disease for their workforce are. With health risk assessments that are usually conducted at the annual wellness-day, employers aim to determine what the health risk prevalence and incidence of the organization’s workforce are. The intention is to determine the health status of employees, but much more can be gained from these assessments.

Health risk assessments typically measure and report lifestyle indicators such as physical activity, nutrition and diet, body fat, sleep patterns, and clinical preventative biometric measures that include for example blood sugar and cholesterol levels. This management information is then used to help the organization determine the collective or organizational health risk. However, the organization’s ability to predict future disease risks, and of course, to calculate the ROI and NPV for specific wellness and disease management interventions are still lacking.

More advanced organizations accurately access the immediate and the future health risks of employees, as well as measure and manage the probability and severity of these adverse effects. With the use of innovative health risk assessments and predictive analytics, they translate large quantities of wellness and disease management information into business intelligence and actionable insights. By understanding the financial and non-financial (business) risks, and the potential rewards, related to employee wellness organizations are able to manage it more effectively as a business imperative.

Both the health risk conditions and the costs associated with the health risks of employees are important sets of management information. To determine the wellness program objectives, organizations first need to identify the health risks of employees and similarly, determine the high, medium and low-risk population groups. Secondly, they need to forecast what the medical and economic costs for each risk group could be. When employee health risks are accurately assessed and monetized appropriate wellness and disease management interventions target specific organizational outcomes.   

When employers take more control over health risk assessment data, and the recording and reporting of their employee wellness and disease management information, they are better positioned to determine the impact of their management interventions. The more sophisticated the wellness and disease management information are, the more advanced the organization will be able to predict the future onset of pre-disease and disease, as well as the various pathogenic stages of diseases, aiming to deliver cost effective, targeted and appropriate interventions. The real value of the appropriate use of wellness and disease management information lies in the fact that the organization can better manage and control disease morbidity and its associated costs.

Furthermore, by understanding the different stages of disease development organizations are able to effectively manage the impact of the identified occupational and non-occupational diseases. Management intervention, and more specifically the employee wellness program, should then be utilized to tolerate, terminate, transfer, or treat employee health risks towards an acceptable level. In these instances, the intention is to focus on employee health and organizational risk mitigation strategies that prevent and treat health risks, pre-disease and disease, as well as promote employee health and wellness.

These organizations adopt a combination of curative (disease management), preventative and health promotion (wellness management) interventions. In addition, well-executed programs use wellness and disease management software to help with data gathering, predictive analytics, document control, and to manage absences and claims effectively.

By enabling employees to feel good and to function well at work, best practice employee wellness programs add significant value to the performance, quality of life and longevity of employees. In this regard, we should consider the difference between the consumption of health care services and an investment in employee wellness or health promotion. For example, when a temporary health condition such as a neck pain is treated and resolved at the onsite clinic, this treatment does not contribute to the employee’s longevity.

But when employees change their lifestyle or manage their health risk appropriately, and their life expectancy increase as a result of it, the benefits of the employee wellness program produce compounding effects from one term to the next. Furthermore, when employee wellness programs incorporate wellness coaching that focuses on the development of employee engagement, resilience, self-efficacy, agility, hope, and optimism, it supports also the development of the emotional and social wellness of employees. For this reason, organizations should follow a dual process by managing the health risks and the wellness of employees. This means that a true investment in employee wellness will always mitigate health risks and prevent disease but, more importantly, also promote the overall health, longevity and wellness of employees.

By embracing a holistic integrated wellness and disease management approach, enlightened organizations broaden their views on human capital management and the extent to which it supports, creates and promotes business value over time. When the health of employees is compromised, either by the employer`s misconduct or by the employee`s own doing, it is to be expected that the organization’s risks will increase that in turn promote the probability of actual harm or loss to the organization.

These organizational risks can be accurately measured in the organizational performance and the medical and economic costs of the organization. In contrast, when the health and wellness of employees are valued and promoted through appropriate management interventions it appreciates in value. With a robust employee wellness and disease management program in place, organizations can commit to help those employees who are sick better manage their health, prevent those who are at-risk from developing costly chronic conditions and support the healthy to be well.