Can wellbeing be outsourced?

Tory leader David Cameron’s recent proclamations on creating a better work-life balance and employee wellbeing have added to the growing pressure on employers to put their houses in order in relation to workplace health, sickness absence and safety. And that means reviewing their use of/need for an occupational health (OH) service.

For many organisations, this can have serious cost implications. Should they build up an in-house department or keep an existing service, and pay for full-time, permanent staff who combine professional skills with an intimate knowledge of the company’s culture? Or is outsourcing the answer, paying for access to a team of specialists who know a lot about OH, but not much about the quirks and politics of an individual organisation?

Weighing up the options

“Outsourcing does mean incurring expense – although in the short term it may look as if employers are saving by avoiding paying national insurance, pensions and so on,” says Dr Chris Sharp, medical director of occupational health provider WorkFit. “But outsourcing does mean that OH practitioners are used more efficiently.

“Bringing in [external] OH staff is an effective way of delivering across a range of businesses. For instance, OH practitioners may be brought in for one day a week, focus on what needs to be done, then leave until the following week.”

With OH professionals in short supply, this can help save the HR department a recruitment headache. Outsourcing means firms can use scarce skills more effectively. For instance, WorkFit, which is staffed by four doctors and five nurses, advises a quarter of a million employees across a range of employment sectors on diverse health issues.

Sharp points out that the apparently high rates charged by providers like his own are inevitable, as they carry the burden of employment costs. He also says that in-house OH departments can come into conflict with HR or line managers, wasting valuable time.

“Medical staff can seem to be recalcitrant,” says Sharp. “They see it as part of their professional independence to say ‘no’ if they think something isn’t right, and employers don’t like that. The outsourced relationship can be easier.” And while independent OH specialists may also be the bearers of bad news, their contract will be more specific, making long, drawn-out disputes less likely. Once their report is on the table, it’s up to the employer to take the next step, Sharp adds.

Not only do internal OH departments sometimes see it as their role to hold out against management decisions, they also tend to set their own agenda in terms of their skills base.

“A smart in-house department will make sure they have a broad range of skills,” Sharp concedes. “But in-house providers can become quite complacent.”

Dr Mark Simpson, managing director of AXA PPP Healthcare, agrees.

“OH can be a law unto itself in-house,” he says. But outsourcing isn’t always appropriate, he warns. “Some industries ought to keep OH in-house – for example, the nuclear industry, which needs high levels of technical knowledge, and certain confidential services within the Armed Forces.”

Defined objectives

Whether employers outsource OH or not, they need to be clear about that they want to get out of OH, and approach the service in a considered, strategic way. Otherwise, they will inevitably waste resources – and organisational health will suffer.

“Some organisations have unrealistic expectations, and use OH as the last port of call, or offload everything related to absence and health on OH,” says Simpson.

While this can make life difficult for an in-house service, external providers have a role to play in showing employers what their options are. Simpson believes that OH providers have improved in this respect.

“Nowadays, there is more professionalism in the OH provider community – more clarity about what is going to be delivered, and what is not going to be,” he says.

But this move towards focus and clear thinking in the provider community needs to be matched by a similar approach in HR, he says. HR directors need to appoint champions or leaders of the relationship with the outside OH provider – or else take on this role themselves. And they need to benchmark what is happening in the organisation, and to manage their suppliers more transparently.

“It cannot be a quick fix,” says Simpson. “There are more opportunities now for HR people to learn how to manage OH services. Non-clinicians can help clinicians by asking the right questions. You do have to put the time in.”

And Simpson also counsels against just expecting OH providers to take on an OH function without first assessing this function, taking a fresh look at how the in-house OH service is working, and re-evaluating its effectiveness. “It’s not about preserving something in aspic and farming it out to an outside employer,” he stresses.

Whether HR decides to outsource OH or keep it in-house, the message is that analysing organisational needs and looking closely at the existing OH service will ultimately mean a better-run, more economical service.

Getting the best from occupational health



  • Clearly define what you want an OH service to provide.

  • When reviewing existing services, carefully analyse organisational needs.

  • Do not simply offload all health-related matters on OH and expect the service to work.

  • If you opt for the in-house route, ensure your OH team has a wide range of skills.

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