Improving productivity through employee health

How much impact can employee health have on productivity levels? A recent seminar attempted to find out. Nic Paton reports.

Asking most occupational health practitioners to make a link between health and workplace productivity is preaching to the converted. OH professionals know that home life and work productivity are linked at many levels, with money and family stresses, for example, often compounding what might otherwise be a manageable workplace “issue”.

How people are managed or rewarded and its impact on productivity also feed into the ongoing debates around engagement and the importance of “good” work. For example, the evidence from US research suggests that employers can gain more by investing in the health of staff who are healthy rather than focusing on the minority who are sick.

Company boards are increasingly wanting to see clear evidence of return on their investment, that what they are doing is actually making a difference. Recent research by insurer and health provider Aviva, for example, found that nearly two-thirds of workers said that they would work harder for an employer that invested in their health, and more than three-quarters make a direct link between their health and their productivity at work.

The latest annual absence survey from the Chartered Institute of Personnel and Development (CIPD), along with insurer and healthcare provider Simplyhealth, also starkly highlighted the relationship between not just absence and productivity, but absence and workplace survival, with half of the employers polled saying that they used employee absence records as part of their criteria for selecting for redundancy.

The CIPD poll also found clear evidence of growing “presenteeism” in the workplace, with more than a quarter of organisations polled reporting an increase in people struggling into work while ill over the past year, and almost two-fifths noting an increase in reported mental health problems.

Furthermore, the Government’s absence review, published in November 2011, and led by national director for health and work Dame Carol Black and David Frost, former director general of the British Chambers of Commerce, puts the issue of work productivity and health at its heart, examining ways in which the current sickness absence system could be modified to keep people in work and how costs could be better shared between the state, employers and individuals.

Investment opportunity

Black was among a range of speakers who gathered in September for a seminar specifically looking at some of the realities for British employers of linking health and productivity. The seminar, “Health + Productivity – Fact or Fiction?”, was organised by health insurer WPA and included speakers from both sides of the Atlantic. It addressed what employers think they are “buying into” when they invest in workplace health and whether or not there is a proper understanding of how such interventions can feed back into productivity and better performance.

Rachel Riley, managing director of corporate healthcare company WPA Protocol and a speaker on the day, suggests that one of the key issues is that employers often misunderstand or expect too much from workplace health investment in financial return on investment (ROI) terms.

quotemarksOne of the key issues is that employers often misunderstand or expect too much from workplace health investment in financial return on investment terms.”

More often than not, companies look to what US firms have achieved through investing in workplace health (partly because there is better evidence), where a $3:$1 ROI is not uncommon. But what too often gets overlooked is the fact that the UK and US health systems are radically different, and so UK and US health insurance and private medical cover will often tend to be skewed or targeted in a completely different way, and therefore achieve very different results.

“US companies that invest in health and wellbeing often see a 3.5:1 return on investment. But that covers the whole range of healthcare: primary care, neo-natal, chronic care, disease management and so on. There is a logical, tangible effect,” explains Riley.

“In the UK, because of the NHS, private medical insurance is much more something for acute elective treatment only, and particularly for middle- to senior-level management. So you cannot say because you see a positive ROI from the US that you will see one for the UK too,” she adds.

“The challenge is how to get it out from being a nice thing to do and into the [finance director’s] office. You are not realistically going to get a 3:1 ROI but you are probably still going to get a positive return on investment.

“If an employee is overweight, unhealthy, smokes or is stressed, then they are unlikely to be as productive as an employee who is none of the above. And there is a huge amount of learning coming out on this from the US.

“Occupational health nurses are, of course, the ones who will be delivering this sort of thing. The challenge is getting board-level buy-in and ensuring there is a very company-specific strategy in place. It has to be within the DNA of the company and people need to understand why it is in place; it needs to be more than just something that sits within a silo within HR – it has to be across the company,” Riley contends.

Reality check

While there remains a compelling business case for elevating wellness and engagement to a boardroom issue, and to make it about productivity and sustaining performance, actually ensuring this becomes the norm is much harder, says Louise Aston, a director at Business in the Community, who also spoke at the event.

“One of the biggest barriers is how do you get occupational health linked to your business objectives? How do you elevate occupational health to become a standalone boardroom issue? It has to be part of an integrated approach which, along the way, recognises the importance of good job design, good management and good working, flexible working and agile working, and the vital role of the line manager.

“There is, obviously, too, a role for HR in this as well as an important positioning for occupational health in terms of leading what may well be a cultural change. It is about taking an integrated, holistic approach rather than one where HR, OH and health and safety are all operating in silos,” she argues.

quotemarksThere needs to be much more of a focus on creating employment and workplaces that protect and promote health, both mental and physical.”

“There needs to be a more collective approach to data and metrics gathering and articulating the ROI. A lot of companies, for example, do not even collect particularly good absence data and then have no idea what they should do with it.

“OH on its own does not have a strong strategic voice, so it is much better if it can find ways to link with HR and health and safety. OH has traditionally been about sticking plasters and, though that has changed considerably in recent years, there is still a need for the development of a more proactive prevention strategy rather than just being about a cure.

“For example, when it comes to the fit note and OH’s role in terms of reasonable adjustments and cost savings, there could be clearer links with HR and make it not just about OH. It is about engaging with HR policies,” Aston adds.

Another key shift – and something we are already seeing among some employers – is to move at least some of the emphasis away from “treatment” to “prevention”, with employers needing to start focusing more on “low-risk” employees – the ones who are not always off sick but could nevertheless be helped to perform better – rather than those who are already a “problem”, although they, of course, do still need to be proactively managed back into the workplace.

As Black herself argued on the day, in an economic environment where you need your workforce to be resilient, engaged and high-performing, there needs to be much more of a focus on creating employment and workplaces that protect and promote health, both mental and physical, and make visible links between health, wellbeing and engagement to productivity. At the moment, for example, the state’s main interventions are focused on the after-job-loss period, while incentives to rehabilitate and retain individuals in work tend to lie more with employers, with GPs somewhere in the middle.

Making a difference

There needs to be, above all, “a change in culture, attitudes and behaviour”, with incentives more aligned, better education and training for healthcare professionals, managers and the public, and less “medicalisation” of common problems.

Rather than becoming overly focused on financial ROI, it makes more sense, at least in the UK, to look at “sustainables”, argues Karen Linn, health services manager, Europe, Middle East and Africa for Johnson & Johnson, another speaker at the event.

“For a company such as ours, we take our global programme and implement it in a way that is culturally appropriate, taking into account the different welfare and health systems. In the UK, instead of focusing on financial ROI, it is looking more at things such as employee engagement, recruitment, retention and productivity,” she says.

“It is more about the ‘sustainables’, the health of our people, the planet and the business. It also needs to take a long-term view; it is about trying to create a culture of health, a systematic, strategic approach rather than it just being about individuals,” she adds.

Effective health management

To be most effective, health management has to be integrated into the environment and the culture of the organisation, not just something bolted on to it. An organisation has to “fix the systems that lead to the defects”, argues Professor Dee Edington, from the Health Management Research Center at the School of Kinesiology at Michigan University, who also spoke at the Health + Productivity event. It is counter-productive to simply hector staff about their general health or lifestyle. Instead, it is important to improve the workplace first, such as cutting out fried food in canteens, opening up stairwells to make them more attractive alternatives to lifts and permitting flexible working.

Once employees start being gently encouraged to make changes to their lifestyles, then other incentives such as access to personal trainers or subsidised gyms can be considered.

There are, suggests Edington, around a dozen health risks that, when combined, can affect performance at work directly.

These include: weight, stress levels, blood pressure, life satisfaction, smoking and high cholesterol.

While the average healthy worker performs at around 85% productivity, staff with three or four conditions can be 6.2% less productive and those with five or more 12.2% less effective, he calculates.

“Occupational health practitioners, as the ‘subject matter experts’, may not be going to be the key drivers of this, because such drivers tend to have to come from the business itself. But occupational health can help develop the strategy that makes the business driver and work to align it with leadership support,” says Linn.

“Changing behaviours and habits is not going to happen overnight, but any small change is positive. The results need to be for the long term. It needs to be about the next five years and then the next five years after that,” she adds.

Of course, making the business case for something that is relatively intangible, and the benefits from which are only going to be seen over the long term, will always be a hard sell. At Johnson & Johnson, not only is a culture of health firmly embedded, the company has the luxury of being able to draw on a wealth of evidence going back 30 years, albeit much of it from America. “But, even though it is the US, we can use it within our own companies,” says Linn.

Linn argues that there have to be three key goals or aspirations. First, it is important to align health and wellbeing with the business so that it gets senior-level support. Second, a genuine culture of health needs to be created, one where the organisation is going to be in it for the long term. Third, whatever you do, it needs to be about engagement, recruitment, retention and performance, at least in the UK.

“It is about making a difference in those areas rather than through a financial ROI,” emphasises Linn.

Risky business

Although not a speaker at September’s event, Stephen Bevan, director at The Work Foundation, agrees that while many claims are made about the links between health and productivity, “some of the measures used are quite questionable”. Often, for example, the “evidence” is from little more than self-reporting methods or staff satisfaction surveys.

“If you found out that, say, 1% of your online transactions were vulnerable to hacking of some sort then making the business case would be simple and something would be done about it right away. You would not need to go into it in detail because it would be clear this was something fundamental and to which the company was vulnerable,” he explains.

“But if it emerged that 35% of your workforce was vulnerable to depression or long-term health conditions, would there be the same urgency? A complicating factor, of course, is that a fair proportion of health problems are not caused by work, so there can be an attribution issue. The UK is not like the US where there have been stories of people who said they did not smoke being dismissed because it has been discovered they smoked at the weekend. The boundary between the individual person’s responsibility for their health and the company’s responsibility has become blurred.

“How, for example, do you deal with someone who has a debt problem and then has a breakdown because of a change in their work? I was talking to an organisation recently which had reduced its headcount but had not diminished its workload. It had also cut its health and wellbeing team to one person. Clearly, then, health and wellbeing is seen as something of a risk from the business perspective and in terms of corporate governance, but it is not seen as enough of a one to make a proper investment.

“I would like to see OH being more of an antagonist. Its expertise lies within the profession and in being much more challenging, much more of a ‘critical friend’ to the employer. It needs to make the case much more strongly that early intervention does make a difference to patients; it can be much more activist about that. Simply sitting back and waiting meekly for referrals is not enough, it needs to be more activist.

“The only people who know what people can still do in their jobs are occupational health [specialists]. Who better than occupational health to be the independent third party who brokers job retention and return to work?” he adds.

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