Do well-being policies need a health check?

Taken at face value, the importance of corporate wellness programs is a given. Looking after employees’ health – both physical and mental – could reduce a company’s sick pay bill, as well as being a good example of corporate responsibility. But a closer examination raises important questions about the best way to implement such schemes and how their outcomes should be assessed.

Businesses go to great lengths to seek best practice in most aspects of their operations. Yet the corporate wellness industry – worth USD 6 billion annually in the U.S. alone according to the think-tank RAND Corporation ­– has proved surprisingly immune to scrutiny. That needs to change if wellness programs are to play a fuller role in closing income protection gaps (IPGs), as part of a preventative approach.

IPGs are defined as shortfalls in earned income due to the incapacitation or premature death of a household breadwinner. They are a growing problem as people live longer and are expected to work until later in life, as highlighted in a report, entitled Embracing the income protection gaps challenge: options and solutions, by Zurich Insurance Group and the Smith School of Enterprise and the Environment, University of Oxford. Workplace-based solutions to close IPGs are even more crucial given that demand for government support is rapidly outpacing supply.

But as yet, there is no long-term data with which to benchmark the effectiveness of corporate wellness programs in addressing IPGs for employees and reducing the costs of absenteeism and presenteeism for employers. Even the short to medium-term evidence suggests that, in many cases, they at best offer marginal gains or break even financially.

Proving the personal benefits of wellness programs

The time is ripe for a reassessment. But how should a company go about assessing the true value of wellness initiatives? "The difficulty of analyzing the outcomes can make running corporate wellness programs look like a Sisyphean task," says Paolo Marini, Director Global Customer & Distribution Management, Corporate Life & Pensions, Zurich Insurance Group.

Research carried out by RAND Corporation into well-being schemes at 600 companies found no sustained improvements in employee health, nor a notable reduction in medical spending. (Source: ‘Workplace Wellness Programs Study’, 2013)

Even where encouraging results have been seen, they have been tempered by concern about selection bias; evidence suggests the majority of employees who elect to take part in wellness programs are already predisposed to make lifestyle changes.

The best-case scenario is one where employees recognize the personal benefits of taking part in such programs, not only as a means of feeling better but also ensuring they continue to earn throughout their working lives.

Pon Holdings, a Netherlands-based conglomerate in the transport sector, has learned a great deal about best practice in tackling IPG challenges through its corporate wellness scheme, which has been running since 2006.

"After six years we took a close look and saw that our health checks weren't producing results," says Rik-Jan Modderkolk, the company's International Health Manager. "They needed a health check of their own.

"Sure, we were offering great resources to our staff but the health of our workers was not noticeably different from the national average."

The crucial change in approach was to move away from a doctor-led scheme. "Their job is to diagnose sickness, not promote health," says Mr Modderkolk. Instead, the company began to follow a proactive, collaborative approach where members of staff are encouraged to take an interest in their own good health.

"The key word is reciprocity," says Titus Tiel Groenestege, Pon's Director of Risk and Insurance.

Pon’s wellness program is entirely voluntary, yet four out of five employees take part. The positive, incentivizing approach assesses levels of "workability" as opposed to disability.

"In simple terms, our healthcare program has made a 25-30 percent improvement in workability rates among our staff compared to the average for the Netherlands," says Mr Groenestege.

The crucial thing is that our workers understand this is for their own good. We say to them, 'If you want to keep working and earning until retirement you need to be fit for the job.'

A culture of commitment – and the need for clear goals

One tool that shows promise – featured in Zurich’s report – is the ‘commitment contract’. This requires an employee to agree to a specific well-being goal – perhaps a predefined weight loss target or regular gym attendance – in return for their employer matching their payments into a pot of money. Should they succeed, then the money is paid to them, otherwise it goes to a mutually agreed charity.

The report also encourages employers to promote awareness of mental health issues as a way of helping to tackle presenteeism, where workers become significantly less productive. And it suggests that governments “should consider offering companies incentives to make medical monitoring, health and fitness programs part of their work culture.” To read the full report click here.

Wellness programs can undoubtedly deliver advantages to both businesses and their customers. But companies need to be clear and realistic about their objectives and balance any perceived financial benefits against the costs of setting up their scheme.

A long-term approach is essential, as is board-level support to ensure the programs are given sufficient time and resources to yield results. Meanwhile, companies and governments both have an interest in establishing a better evidence base to show how these schemes can be run effectively.

“So many wellness programs are set up with clearly defined and detailed expenses, but their objectives are quantified much more softly,” concludes Mr Marini. “We need both ends of the process to be clear and measurable. Only then can proper conclusions be drawn about the correct way forward.”

Key takeaways

• Preventative measures to close income protection gaps (IPGs) are urgently needed and, with careful design and evaluation, corporate wellness programs could play an important role in achieving this alongside measures taken by governments, insurers and individuals.
• Currently, many corporate wellness programs are insufficiently supported by the evidence base for companies to be confident of their true value or about how best to maximize their potential benefits.
• Both private companies and governments have an interest in improving their understanding of how these schemes could be run more effectively to help tackle IPGs and absenteeism, particularly in an era of aging workforces.
• Businesses need to take a long-term, collaborative approach to promoting their employees’ well-being in the future with measurable objectives that individual workers and the board have a shared interest in proactively pursuing.