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Investing in Workplace Wellness: The Business Case

This article outlines why workplace wellness programs makes good sense from a business and investment point of view. Several Canadian workplaces who offer wellness programs to their employees are highlighted.

The writing is on the wall when it comes to the need for workplaces to address the health and well-being of their employees, retirees, and family members. Investing in a workplace wellness program is not only the “right” thing to do but it also makes good business sense.

On an almost daily basis, the media reports on the rising rates of chronic diseases (e.g., heart disease, some forms of cancer, and type 2 diabetes) and other health issues. For example, almost one out of every two adults in the province of Ontario is overweight or obese (1). To address these health issues, a concerted and collaborative approach is needed, one that includes the contribution of the workplace.

There is no doubt that our health care system is overburdened; funding deficiencies, long waiting lists for diagnostic testing, and physician shortages across the province. Although they don’t tell the whole story, two significant contributing factors include a health system that is focused on treatment and a rapidly aging society.

PREVENTION AND TREATMENT COSTS

A focus on treatment versus prevention has created a “sick care” system in which the bulk of funding is spent on treating people once they are sick. In fact, the Ontario figures for this split in funding is in the range of 90% treatment vs. 10% prevention (2). While treatment is obviously an important feature of our health care system, the 2002 Romanov Report makes a strong case for the need to shift some of these funds to focus more on prevention and primary health care services (3). The bottom line: more efforts must be made to keep people healthy, thereby reducing the pressure on the “sick care” system and reducing the financial burden on all of us, including employers.

AGING SOCIETY

The impact of a rapidly aging society must also be considered. Projections from Statistics Canada indicate that by 2006, 50% of the baby boomers will be over age 50 and by 2016, 100% of the baby boomers will have passed age 50 (4). After the age of 50, a rise in health care costs is observed as these individuals access more health care products and services. These costs are passed on to the public health care system as well as to the workplace. Efforts must be made to help this age group stay healthy longer; while they are working and into their retirement.

HEALTHY WORKPLACES, HEALTHY COMMUNITIES

A comprehensive workplace wellness program can significantly contribute to improving the health of our society as a whole. Workplaces that provide these types of programs recognize that the workplace is not an island. Workplace wellness programs need to be an integral part of any effort to improve the overall health and well-being of a community.

MAKING A CASE

 Workplaces today exist within a competitive marketplace where the ability to contain costs is a primary determinant of a successful organization. Costs such as those associated with benefits, WSIB, sick leave, absenteeism, short and long term disability, employee turnover, and “presenteeism” can be staggering. While many employers consider these expenses to be part of the cost of doing business, in truth these costs can be significantly reduced with a relatively modest investment in a comprehensive workplace wellness program. Research in support of this consistently demonstrates a return of $2.00 to $5.00 for every dollar invested. The best return on investment comes from programs that are grounded in a comprehensive, population-based approach, integrated with the company health plan, combined with individualized risk reduction strategies for high-risk employees, and have had sufficient time to become established (3 to 5 years minimum) (5). From this perspective, workplace wellness programs should be viewed as “a long-term investment with some potential for short-term savings.”(6)

HIGHLIGHTS FROM COMPANIES IN CANADA

DOFASCO – A “Healthy Lifestyle Program” was implemented in 1993 as a result of an employee audit. Activities offered included CPR training, and classes in weight loss/weight control, smoking cessation, foot care, stress management, yoga, tai chi and aerobics.

Results: The lost time injury rate reduced from 7.0 per 200,000 hours worked in 1991 to 2.07 in 2000. In addition, from 1995 to 1998, Dofasco reduced its WSIB payments by more than $6 million (7).

IRVING PAPER LTD. - A health and safety program was implemented in 1991 in response to poor labour-management relations. Activities offered included classes in smoking cessation, healthy weight maintenance and fitness as well as health screenings and flu shots clinics. Employees were also provided with access to print resources and periodic information sessions on a variety of health-related topics.

Results: The program contributed to reductions in short term disability claims from $494,000 in 1995 to $260,000 in 2000. Cumulative savings from reduced grievances and arbitrations were estimated to be in excess of $250,000 (8).

NRC CANADA - The “HealthFirst Program” was implemented to improve employee health and to facilitate a smooth return to work for employees after injury or illness.

Results: A decrease in the reported days lost per employee per year was observed, falling from 3.4 in 1998 to 2.39 in 2001. As well, the company experienced direct savings of $194,981 and $146,235 in indirect savings in 2001 (9).

Workplaces are increasingly recognizing the importance of wellness programs not only because of the potential cost savings, but also because an investment in employee wellness improves the health of the workplace and the health of the entire community.

 


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