Rapidly aging and shrinking workforces around the industrialised world are forcing employers to deal with a new phenomenon, a looming massive shortage of skilled, productive workers for the next decade or more. In a tight labour market, a company’s ability to offer employees flexibility to help them achieve a balanced and healthy lifestyle can be the key to finding and holding good employees.
Enlightened companies realise that the pressure they put employees under in order produce results needs to be balanced by investing in their health and wellbeing. Companies cannot afford the loss of skilled workers and one of the best ways to attract and retain productive employees is to improve the health of those workers through a Corporate Wellness Program.
Employers have a particularly important role to play as the workplace is a significant ‘point of contact’ for promoting preventative health issues. At the same time, developing a healthier workforce can result in tangible business benefits. Numerous studies have found that the benefits (such as significant increases in employee motivation and productivity, improved employee satisfaction and increased staff retention) far outweigh the costs of such programs. It is definitely a win-win situation.
Effects of specific health conditions on labour force participation
Different health conditions have different impacts on a person’s willingness or ability to participate in the labour force. According to “Productivity Commission (2007) Effects of Health and Education on Labour Force Participation”, the following health conditions reduce the probability of a person participating in the labour force:
• mental health, by around 50 per cent;
• diabetes, by around 30 per cent;
• arthritis, by around 23 per cent;
• cardio-vascular disease, by around 22 per cent; and
• cancer, by around 15 per cent.
Evidence shows that the more people undertake physical activity and the better their nutrition, the more likely they are to be free of chronic and mental illness. Research also shows that physical activity in itself can prevent many illnesses. There is no getting away from the fact that an individual’s health status can significantly impact on that person’s ability and willingness to participate in the labour force.
The link to performance and productivity
Research into “presenteeism” (i.e. when an employee may be well enough to come to work but his or her productivity is reduced because of illness) 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. According to Econtech Pty Ltd the direct cost of presenteeism to Australian employers is estimated to be around 1.9 per cent of GDP (equivalent to about $17.6 billion of real GDP in 2005/06). The overall average labour productivity loss caused by presenteeism is estimated to be about 2.5 per cent. This adds significant weight to the notion that Presenteeism can cut individual productivity by one-third or more and that it is, in fact, a much more costly problem than absenteeism.
According to a GoodLife spokesperson, absenteeism costs businesses and industries 225 times as much as labour disputes and strikes annually; backaches account for 91 million days of lost work per year; and stressed employees have higher rates of absenteeism, accidents, illnesses, and productivity errors. All preventable conditions!
The Medibank study showed that employees exhibiting poor health behaviour is 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. From an employers’ perspective it is not just about finding and keeping great employees, it is also about creating an environment in which they are most productive.
So if money is not the main motivator – how can companies retain staff?
Recent research studies confirm what management gurus have maintained for decades: as long as salary is in the general range for a particular role, most employees will not consider it the deciding factor in job satisfaction. So, as long as you are paying at the appropriate level what else can you do to attract top talent, retain them and ensure they are performing at their peak? Leading edge organisations are increasingly reviewing and enhancing their employee value proposition to provide wellness benefits.
Employee wellness programs can take many forms but they have an overriding theme of improving the general health and wellbeing of employees. They are a win win for both the employer and its staff. Employers gain the benefits of potentially lower Workcover claims, reduced absenteeism, increased productivity, reduced risk of injuries or illnesses to staff, and greater employee morale and loyalty which all contributes to the employers bottom line. On the other hand, employees stand to benefit from improved work-life integration, better health, and cost savings on services that would otherwise be at their expense.
As our skills shortage worsens, the community ages and the number of people with chronic disease continues to balloon, the reality will hit home more forcefully for companies that do not invest in workplace health and wellbeing. With global skill shortages placing a major restriction on business growth the last bastion of competitive advantage is how many healthier people do you have than your competitors?
We will look at how you can develop a Corporate Wellness program to attract and retain high performing employees in next month’s newsletter.
This article was written by Michael Alonso, who is a Health and Performance Coach specialising in preventative health, movement, and post rehabilitation conditioning for individuals and corporates. He has over 18 year’s experience in the fitness industry and is a Certified Health & Fitness Professional. www.pbworks.com.au
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