Health and Productivity Management (HPM) is the term now used to describe the field of corporate health and wellbeing. There are many very good reasons to focus on this aspect of your organsitional culture. Apart from our moral obligations and the fact we all want to be good corporate citizens - there are also very clear financial and business returns. They include tackling absenteeism, presenteeism, reducing stress, attraction and staff-retention, and being employers of choice.
Presenteeism
This is where a staff member is present in body but not in spirit. It takes two forms:
- A lack of engagement - this can reduce “discretionary effort” by 20% or more.
- Illness - employees who come to work but are sick can suffer a 30% reduction in productivity.
Absenteeism
Staff exhibiting poor health behaviours are absent up to nine times more than healthy individuals. In fact for every health risk they they have (smoking, weight, stress etc) their productivity decreases by 2.4%.
The Hidden Costs of Stress
Stress costs you a lot more than you might realise:
- Every employee with untreated depression costs the organisation $9,600/year due to lost productivity and absenteeism [4]. Given that 1 in 3 adults suffers from moderate to extreme stress that’s a cost of $320,000 per 100 people in your organisation or almost $1,000,000 per year for an organisation of 300 staff.
- Up to 75% of all time lost in workplaces is stress-related.
- 40% of job turnover is due to stress and it costs 50-150% of an employees salary to replace them.
These are just some of the visible costs.
Counterproductive Behaviour
Far higher is the cost of ‘counterproductive behaviour’:
- A silo mentality - poor cooperation, too much internal competition, destructive politics, insufficient information sharing, a dominating “what’s-in-it-for-me” mentality.
- Poor creativity and low incidence of innovation.
- Too many customer complaints.
- A high rate of faults.
- Passive-aggressive behaviour, bullying.
These can be up to ten times higher than direct workers compensation payouts.
Benefits of Corporate Wellness
The business case for healthy workplaces is now undisputed. A meta-study of 300 workplace health studies found that the average return on every dollar spent was three to one as well a reduction in insurance costs by $393 per person [5]. The benefits take many forms:
- increases attraction
- improves retention
- reduced absenteeism
- higher engagement
Happy Workplaces Have Further Benefits
Healthy workplaces are good but happy workplaces do even better, so rather than just improving health why not strive for workplace happiness? Here are just some of the benefits:
- The share price of happy organisations increases 3 x more than the share index (98-05).
- Happy organisations increased their sales by 15.1% compared with 0.1% for ‘unhappy’ organisations over an eight-year period.
- Lower staff turnover and higher customer loyalty, sale and profit.
- Increased trust.
Danish software company Four Systems increased sales by 40% and reduced stress by 75% be introducing a laughter program.
It adds up to making you an employer of choice. That helps you attract and retain staff and keeps them performing at optimal levels.
That translates to the bottom line:
Organisations which focus on their people and culture have a 60% greater return than those that don’t.
If you would like to know more please contact us - details are on the contact page.
[4] Hilton, M. Assessing the financial return on investment of good management strategies and the WORC project. 2006. Sydney, Australia.
[5] Companies Today Keep the Doctor Away. Human Resources Magazine Last accessed: 20/7/07.
