Dr. Lynne Zimmerman
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Corporate Applications

 

Stress vs. Wellness Programs:  Cost / Benefits analysis 

Occupational stress is pervasive and invasive.   It is currently estimated that 60% of all absenteeism from work is caused by stress, resulting in roughly 1 million persons absent each workday.  Nearly one-fifth of employed adults now employed acknowledge that workplace stress has caused them to quit a job.  American businesses pay the price of workers who suffer from job-related stress. Recent estimates are that job stress costs employers between $200 and $300 billion a year in absenteeism, tardiness, burnout, lower productivity, high turnover, worker’s compensation and medical insurance costs. To put this in perspective, this figure amounts to more than 10 times the cost of all strikes combined, or the sum total profits of the Fortune 500 companies. 

 

 

Stress at Work is Bunk for Business

The 2012 Workplace Survey released by the American Psychological Association suggests that many Americans report chronic work-related stress. 41% said they “feel tense or stressed out during the workday,” an uptick from last year’s 36% figure.  In its annual wellness report, Employee Assistance Program provider ComPsych found that 38% of employees can’t stop thinking about problems like emotional, health, financial and job concerns.

As for business?

The World Health Organization estimates that stress costs American businesses $300 billion dollars a year.  Businesses must consider the costs of skyrocketing insurance rates and health care costs.  Stress was the most common cause of long-term sickness absence for both manual and non-manual employees in CIPD's 2011 Absence Management Survey    (a global HR development organization.)  Some research suggests that health benefits for highly stressed employees cost some 40 percent more than average.
Forbes.com 2012

Nearly half of all workers suffer from moderate to severe stress while on the job, according to a recent survey.   66 percent of employees report that they have difficulty focusing on tasks at work because of stress.  Stress has been called the “health epidemic of the 21st century” by the World Health Organization. In addition to reporting difficulties with focusing on tasks at work, employees also said that stress was responsible for errors and/or missed deadlines (21 percent), trouble getting along with co-workers/superiors (15.5 percent), missed days (14.9 percent) and lateness (14.4 percent). 
Business News Daily


Businesses pay around $2,189 in workers' compensation costs for smokers, compared with $176 for nonsmokers.To make matters worse, nonsmoking employees can receive workers' compensation, unemployment compensation, disability benefits, and other settlements due to secondhand smoke. Indirect costs of smoking in the workplace include lost worker production time ($92 billion lost to smoking attributable diseases over a four year span), air cooling and ventilation costs, property damage, and the recruitment and retraining of new workers after the old ones get sick or die off. 
National Business Group On Health
2011

A 2010 study showed that obesity among full-time employees cost their employers $73.1 billion a year  Another health-related issue that can cost employers big time is weight. Besides direct health care costs, "presenteeism," or showing up to work despite health issues, cost companies $12.1 billion per year.  And the more obese you are, the costlier: "...severely obese individuals with a body mass index greater than 35 accounted for 61 percent of all obese employee costs, though they represent only 37 percent of the overall obese population."

ABC News

Substance abusers cost their employers $7,000 a year and are 33% less productive than the average American worker  Drugs and alcohol are major productivity killers. Alcohol alone can be responsible for $119 billion in lost profits in a single year.  Furthermore, drug using employees are more often late or no-shows, more likely to get in workplace accidents, more likely to commit violations, and have higher medical costs.

National Drug-Free Workplace Alliance

Grief can lead to reduced productivity and increased mistakes, adding up to $75 billion a year  It may be a touchy subject, but grieving employees are costly. And how the company and co-workers handle the situation can either break or make that person's commitment to the company.  
The Wall Street Journal, Career Resources Institute

Is A Corporate Wellness Or Preventive Care Program
Right For Your Company?

Gaining a healthy lifestyle is often at the top of a New Year’s resolutions list, but a recent study suggests companies who help their employees achieve that goal can have happier workers and also benefit from health care cost savings. up http://i.forbesimg.com t Move down

Weighing the Benefits

A corporate wellness program has the potential to reduce an employee’s chance of incurring key health risks such as obesity, high cholesterol and blood pressure, as well as the potential to help him stop smoking or abusing alcohol.

With those risks mitigated, companies could cut their health costs by about $650 (or 18% per average working-age adult) and up to 28% for older adults and retirees, according to a study in the Journal of Occupational and Environmental Medicine.

In addition, companies with wellness programs find that productivity among employees is better because they are sick fewer times. According to Corporate Wellness Magazineeach dollar invested in a wellness program can yield  about $4 in increased productivity,  with less absenteeism and lower insurance costs.

Employees are also more likely to stay with a company they perceive to be  making an investment in their well-being, according to an article posted by GreenIndustryPros.com.

The article cited a study by Wellness Proposals that found at companies where wellness programs were implemented,   sick leave was down by 28%, use of health care benefits was lowered by 26% and compensation claims made by employees were reduced by 30%.  Forbes.com 2013

Corporate Wellness Programs

Corporate wellness programs, for many years, have proven to reduce health care costs. Many corporations have looked to the Hewitt studies on wellness programs and ROI for some guidance. While national health care costs rose at a rate of about 9% in 2009 (Hewitt Associates, 2009), companies such as Motorola, who provided a comprehensive corporate wellness program, saw a modest increase in health care costs of only 2.4%.

Much research has been done on the corporate wellness program average cost and results have been very positive. In many cases, the current trends in corporate wellness programming have directly impacted the ROI of corporate wellness programs.

While most corporate wellness programs average a 3 to 1 Return On Investment (ROI), documented cases of a ROI as high as 15 times investment have been seen. The number of our clients that have enjoyed a healthy ROI from our corporate wellness programs is quite remarkable.

When corporations calculate the ROI numbers on corporate wellness programs, they are quite often surprised at the return the corporation is receiving on the dollars invested in corporate wellness activities.

Additional benefits include:

• Increased employee time on the job
• Improved quality of care
• Increased employee satisfaction
• Reduced usage of outpatient/emergency resources
• Improved, healthier lifestyles
• Increased employee productivity

American Institute for Preventive Medicine 2014

Wellness In The Workplace: Bringing Preventive Care Into The Office:

Huffington Post January  2014

At this point it is common knowledge that American health outcomes are not in good shape. In a nation where, according to the CDC, more than 75 percent of health care spending is related to chronic conditions such as heart disease, diabetes, arthritis, obesity and respiratory conditions -- many of which are preventable -- it has become imperative to examine the entirety of the American lifestyle. Since most American adults are employed at least part-time, the workplace inevitably plays a large role in Americans’ health.

A study published in May pointed to a correlation between an increasingly sedentary workforce and an increasingly obese population. While approximately 50 percent of private sector jobs required at least a moderate amount of physical activity in 1960, fewer than 20 percent of private sector jobs do the same today. In addition to a lack of physical exercise, the CDC points to poor nutrition and poor lifestyle choices -- such as binge drinking and cigarette smoking -- as the major causes of these chronic conditions. It’s obvious that poor lifestyle choices have adverse effects on Americans as individuals. What is less obvious, but equally as important, is the adverse effects that poor health outcomes have on employers.

Not only do chronically sick employees become extremely costly for employers due to health insurance coverage and medical expenses (a Towers Watson survey reported that employer health care costs have increased 36 percent over the past five years), but chronically ill employees also tend to be less productive and -- predictably -- absent more often. This translates into employers having a very real stake in their employees’ health. And companies are starting to take notice. One way that employers are addressing these issues is through the implementation of workplace wellness programs.

An array of programs have emerged over the past few years -- often incentive-based -- encouraging employees to make positive lifestyle decisions and hit certain health goals to reap rewards, many of which are financial.  Companies that already have adopted these comprehensive wellness programs include Maidenform, Viacom, Timberland, the American Diabetes Association, SunTrust and Pitney Bowes. And more employers are jumping on the bandwagon.

A recent survey of around 600 employers, conducted by Towers Watson and the National Business Group on Health, reported that by 2012, 33 percent of employers would be adopting incentive-based wellness programs alone -- up from 6 percent in 2010. 

Risa Lavizzo-Mourey CEO at Robert Wood Johnson Foundation

With rates of costly chronic disease and obesity spiraling ever higher, companies that do not help their workers get and stay healthy are paying a very high price.

Almost 60 percent of U.S. residents under age 65 are covered by employer-sponsored health insurance. Consequently, employers, who finance the lion’s share of the nation’s health care costs, pay a "triple health tax": first by shelling out for employee health benefits; next, by subsidizing Medicare and Medicaid through higher medical fees paid by private insurance; and finally, by subsidizing the uninsured through increased health insurance premiums.

In an attempt to reduce that financial burden, 67 percent of U.S. employers provide workplace wellness programs, according to an annual survey by the Kaiser Family Foundation. The Affordable Care Act should soon lead to an even higher adoption rate, as it authorizes grants to small businesses that launch comprehensive wellness programs by 2015.

Beyond the grants, however, wellness programs unquestionably make business sense. A 2010 study published in Health Affairs found that medical spending falls by $3.27 for every dollar spent on promoting employee wellness, while the cost of absenteeism drops by $2.37 per each wellness dollar spent.  LinkedIn 2013 

 

 The Bottom Line

 

 Stress management and preventive wellness are now taught in Fortune 500 companies who are at the forefront of their respective industries.  Intervention studies investigating the impact of energy medicine programs taught in the workplace have documented a wide range of organizationally relevant outcomes, including increases in productivity, job satisfaction, communication effectiveness and improvement in employee health, and reductions in absenteeism, turnover and employee medical costs. 

These dramatic improvements are accomplished by teaching employees self-management techniques that reduce stress and anxiety, increase emotional stability and boost physical energy.  Organizations have found a strong correlation between the increased emotional stability and physiological health of employees who learn to manage stress and maintain wellness for themselves, and subsequent increases in productivity and decreases in absenteeism. 

Benefits for Your Company 

The most significant benefit to companies that employ these programs is a rise in their bottom line.  This net increase is realized as a result of significant long-term increases in productivity and organizational coherence, as well as calculable reductions in absenteeism, turnover and burnout, and consequent reductions in worker’s compensation and medical insurance costs.