People & Strategy Winter 2015 Vol. 38 Issue 1 - 31

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s more employers focus attention on
employee health and wellness, they
need to understand better how health
and productivity effectiveness drive the
human capital and financial outcomes critical
to organizational success and improved total
shareholder returns. With this enhanced
understanding must come more effective
strategies for achieving the full array of financial, productivity, and health results. HR collaborates with senior leadership in the design
of these strategies and plays a critical role in
executing and managing the resulting
programs.
But first let's consider what organizations
have to gain from improving employee health
and wellness.

The Business Value of
Health and
Productivity Initiatives
Towers Watson's 2013-2014 Staying@Work
Survey revealed that improved health and
productivity is a business priority in all countries studied. The majority of respondents
said they expect to increase support for programs in these areas over the next two to
three years.
Our findings uncover a solid link between
highly effective health and productivity strategies and strong human capital and financial
results-including improved worker productivity, increased turnover savings, and
improved benefit cost management-that
underpin organizational health. These results
are not only evident within the United States,
but extend out on a global basis. The Towers
Watson Statying@Work research has demonstrated over the last decade the strong link
between health and productivity effectiveness, a high-performing health care program,
and ultimately superior financial
performance.
The critical question is, what are the key
ingredients of an effective health and productivity strategy? By examining two critical
outcomes of highly effective health and productivity programs and practices-improved
workforce health and increased workforce

effectiveness-we can better understand the
value of these initiatives.

Improved Workforce
Health
Improving workforce health and lifestyle
behaviors lowers medical and disability
claims and reduces unplanned sickness,
absence, and lost productivity. Using the U.S.
as an example, our research shows that companies with highly effective health and productivity programs experience:
* Reduced health care costs of more than
$1,600 per employee, giving a company
with 20,000 employees a $20 million
advantage over companies with lowperforming programs
* Fewer lost days due to unplanned
absences and disability (3.3 compared
with 4 days), which can increase a typical company's benefit savings by considerably more than 30 percent when
combined with related savings on health
care costs
* Reductions in some health risks (tobacco
use and sedentary lifestyles or physical
inactivity) as well as lower voluntary turnover rates
In addition, on a global basis, employers with
highly effective programs that contribute to
improved workforce health report 34 percent
higher revenue per employee and market premiums that are 20 percentage points higher
than low-effectiveness companies.

Emphasize Workforce
Effectiveness
An effective health and productivity strategy
invests in a comprehensive set of programs
that spans the entire health continuum. But
the recipe for a successful health and productivity strategy involves much more than having health programs in place. The most
effective health and productivity strategies
extend beyond physical and mental health to
encompass the work environment, culture,
and interpersonal relationships that connect

employees to the mission and goals of the
organization. Strategies that create a compelling, enterprise-wide employment deal
through the organization's reward structure,
leadership, and communication program cultivate a highly engaged and effective
workforce.
Our recent research points to a consistent
relationship between high employee engagement and strong buy-in for employer
initiatives promoting a healthy workplace
environment. Absent some compelling personal reasons, disengaged employees are
unlikely to connect with their employer on
health and wellness issues.
In contrast, highly engaged employees are
three to four times more likely to be aware
of, receptive, and responsive to the goals of
the wellness programs (see Figure 1). In
fact, these dialed-in employees are more
than three times more likely to respond to
their employers' wellness efforts and take
actions to live a healthier lifestyle than
their disengaged counterparts. As we see in
Figure 1, highly engaged employees have a
greater awareness of their employers' wellness initiatives, such as the availability of
healthier food options in the cafeteria or
tools to make better health decisions. This
awareness predisposes employees to be
receptive to manager involvement in wellness activities and to respond positively to
various employer-sponsored initiatives.

Falling Short-And
What to Do About It
Despite the evidence supporting the potential
employee and employer benefits of improving workforce health and lifestyle behaviors,
many employers are falling short in these
areas. For instance, in the U.S., half of
employers participating in our Staying@
Work Survey say they offer various employee
programs but do not have a formally articulated health and productivity strategy. Only
30 percent, however, report having effectively
communicated a strategy and accompanying
value proposition.
Globally, roughly half of survey respondents
in each country indicate that, while they offer
VOLUME 38/ISSUE 1 - 2015

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People & Strategy Winter 2015 Vol. 38 Issue 1

Table of Contents for the Digital Edition of People & Strategy Winter 2015 Vol. 38 Issue 1
