Health in the Workplace

Beyond Benefits: How Employee Health Can Affect your Bottom Line

Beyond giving employers an edge over their competitors when it comes to attracting the most valued candidates, offering comprehensive healthcare has other advantages. Healthy, content employees have the potential to make a difference to a business’s financial performance.

In 2021, offering comprehensive healthcare benefits to employees is about more than covering the cost of doctors’ visits or hospital stays.

Mental health is a part of the equation, and the role of prevention of health problems is growing. The reasons employers cite for offering this type of benefits reach beyond social responsibility. ?

Mental health is a part of the equation

A healthy workforce helps your company’s performance

Measuring the effect of a healthy workforce can have on a company’s financial performance has not always been easy. However, a study by the American College of Occupational and Environmental Medicine has shown that, based on a theoretical investment of $10,000, companies with extensive health, safety and environmental programs outperformed the Standard & Poor’s 500 index.

In this case, companies were tracked over 13 to 15 years to allow for long-term analysis.

The example of Germany-based SAP clearly illustrates the high impact of employee well-being on business success. SAP’s approach includes enhancing both physical and mental health. Apart from its HR department, C-level and board leaderships are also highly involved in strategising and improving employee well-being. Since 2009, its success has been measured in the company’s own Business Health Culture Index (BHCI). The index measures employee well-being, whilst linking it to business performance. The results are staggering: an improvement of 1% on the BHCI delivers an impact of €90 to 100 Million on business performance.

The high impact of employee well-being on business success: an improvement of 1% on the Business Health Culture Index delivers an impact of €90 to 100 Million on business performance

It pays to look after your workforce.

The cost of ill health and absenteeism

If the example above has not yet convinced you, a look at the costs incurred by ill health and absenteeism may paint an even clearer picture.

Absenteeism has been a buzzword in HR departments for years. Whilst it is generally associated with low morale, absenteeism can also be considered a medical problem - mainly due to the fact that it can be linked to both physical and mental problems.

Moreover, according to the Centre for Disease Control (CDC), ill health costs companies hundreds of billions of dollars each year due to employees missing work days.

Some of these costs have increased since the start of the COVID-19 pandemic, which has put additional pressures on a number of occupations.

Problems on both sides

Employees struggling with ill health and missing work have a detrimental effect on both employers and employees, as the CDC’s findings show.?

Whilst employers might notice a drop in productivity or reduced quality of products manufactured and services delivered, employees also struggle. An inability to meet the expected standards may eventually lead to the employee losing their job. This, in turn, often triggers financial difficulties for families.

Indebtedness then might trigger anxiety and other mental health struggles.

On the other hand, as the SAP example shows, healthy employees and increased quality of life mean improved business performance. So, how does a company take advantage of the benefits staff well-being offers?

What businesses can do

Stepping aside from benefits for a moment, it is important to acknowledge that other benefits such as pay increase continue to be important when it comes to attracting and retaining employees.

However, a survey by Glassdoor showed that almost 50% of jobseekers indicated that attractive benefits such as comprehensive health insurance is a major factor for them when applying for a job and 80% prefer additional benefits over salary increase.

50% of jobseekers indicated that attractive benefits such as comprehensive health insurance is a major factor for them when applying for a job and 80% prefer additional benefits over salary increase.

Businesses that want to attract the best candidates need to offer a competitive salary alongside a benefits package. This package may be more multifaceted than employers or managers initially think.

Key components of a competitive and comprehensive benefits package

Healthcare: one of the cornerstones of any benefits package, attractive health insurance covers more than hospital care and outpatient services. Instead, to attract top talent, companies need to consider extending their offering to include dental and eye care services.

Another addition to a standard health benefits package are disability benefits. These offer employees peace of mind.

Prevention: integrating innovative workplace health and wellness programs such as nutritional and fitness coaching into benefits packages will help address multiple problems.

Nevertheless, prevention is often more efficient, both from a financial and a well-being perspective. Offering employees access to reduced-price gym memberships or wellness classes is only one example. Not everyone may be keen on sports, but leading an active, healthy lifestyle is not solely dependent on regular workouts.

Mental health: much has been written about the connection between excessive stress and a loss of productivity, let alone long-term health problems. The COVID-19 pandemic has emphasised on the importance of raising awareness on mental health. Speaking up about and seeking help for mental health concerns has lost some of the stigma previously attached to it.

Offering counselling and advisory services to employees is one step employers can take towards reducing the impact of stress and anxiety. Like physical health problems, in many cases mental health problems can be prevented before they become too serious.

Retirement benefits: besides healthcare, retirement benefits are another cornerstone of benefits packages. Employers matching their staff’s contributions are likely to attract and retain sought-after employees more easily.

Something unique: ask yourself, what’s one thing your company can offer prospective employees that your competitors simply cannot. Airlines offering preferential rates to family members of employees is one example for this.

If that is not something your company can offer, how about contributing towards further education for employees or covering (a part of) their tuition repayments.

Another example is LinkedIn’s recent decision to allow the whole company to take a paid week off to prevent burnout.

Cultural considerations

Beyond salary and benefits, company culture plays an important role. Throughout our working lives we spend more time at work than we do with our families. Financial incentives can only partially compensate for that.

A strong and supportive company culture can go a long way towards attracting top talent. Humans are tribal – we like to feel like we belong. Being a part of an organization with strong values gives employees that sense of belonging and helps develop a long-term employee relationship. As a consequence, staff are likely to stay with a business longer and perform better.

The result is a successful business with increased productivity and turnover leading to higher profits.