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Stephan B. Tanda

Stephan B. Tanda

Posted: May 19, 2010 02:47 AM

Health Is the Achilles Heel of Corporate America

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The two biggest domestic political issues that dominated our national discourse over 2009 and 2010 were healthcare reform and the economic crisis. However, these two issues were rarely discussed in conjunction, especially in many of the boardrooms of major US corporations. This is a common mistake as there is a strong link between the health and wellness of employees and company profit and performance.

A report by the World Economic Forum on corporate health and wellness estimates that the global loss in productivity due to chronic illness hovers around the $2 trillion mark. The United States alone rakes up half of this shortfall, estimated at $1 trillion. To put this number is perspective, the entire US bank bailout in 2009 was $700 billion, or $300 billion less than the economic loss from health related lower productivity. Added to this, corporations in the US are also faced with soaring healthcare costs for its employees as nearly all major corporations offer health insurance as an employment benefit.

In contrast, companies that have adopted proactive, corporate wellness programs have experienced an average savings of $700 per employee per year and have seen a return on investment upwards of 755% in reduced healthcare costs and higher productivity levels.

While corporate health and wellness programs are not mainstream, these programs are far from a new concept. Companies across the globe, both in white collar and blue collar industries, have created successful programs that have delivered impressive and often inspiring results.

Blue Cross/Blue Shield of Indiana and Coors Brewing Company, for example, both introduced a corporate fitness program, which reaped a ROI of 151% and 515% respectively.

In many cases, especially for labor intensive industries, the failure to adopt a wellness program can be very costly. Cainbro, one of the largest civil and heavy industrial construction companies in the US, was experiencing an average increase in healthcare costs of 21%. The company decided to introduce a wellness and safety program in an attempt to reduce their healthcare expenditures. After the first year, the company experienced a savings over their projected healthcare expenditures of over $1.2 million. By year four, their savings grew to almost $5 million.

Corporate health and wellness programs are also strong morale boosters and a powerful talent retention and recruitment tool. Organizations that have and actively promote such programs are seen to be top performers in their sector and they are four times less likely to lose talent within the next year. Research by the World Economic Forum has shown that 64% of employees that have a favorable view of their company's health and wellness program plan to stay with the company for at least five years.

Given the enormous cost savings benefits, increases in productivity and competitive advantage, especially in a globalized economy, there is a strong business rationale for companies to invest in developing robust and comprehensive health and wellness programs.

However, in order to achieve this, companies need to adopt sophisticated and strategic programs that have deep corporate engagement and that holistically address health. In other words, it should not be seen as simply a Human Resources project or a one-off event but rather a strategic board level decision aimed at making the company perform better and be more attractive for its current and prospective employees.

As a board member, I have a responsibility to look after the bottom line and to make decisions that will improve the financial position of the company. From our experience, I can honestly say that it has begun to make a difference. Having a long established expertise in nutrition, we can draw on our knowledge to invest in our human resources. Consequently, we are building a robust health and wellness program across our global operations and developing it into a service offering we are taking to the marketplace.

While the business benefits are clear, on a personal level, what has been even more gratifying for me is to hear personal stories of employees that have lost weight, lowered their cholesterol and blood pressure levels and in general are happier at work. As we spend more and more of our time at work, I believe that we, as business leaders, need to make the work environment as rewarding as possible. I am glad that we have found a way to not only achieve this goal but to improve the performance of the company at the same time.

Therefore, I would urge my fellow business leaders to seriously consider introducing health and wellness programs as a key performance driver. Furthermore, industry associations also have a role to play. For example, the Grocery Manufacturers Association's Health Weight Commitment program was developed to reduce obesity through school and workplace initiatives and more informative packaging. Such actions are highly commendable as they contribute to the promotion of healthy lifestyles for all members of the family.

It is also important for government to actively promote the uptake of these programs from small businesses to major corporations. This can range from providing incentives to companies that initiate such programs within their organizations to an aggressive communication campaign, similar to Michelle Obama's Childhood Obesity Initiative, which is a multi-agency, multi-stakeholder plan to holistically address childhood wellness.

Finally employees must show their interest, desire and commitment to partake in these programs to ensure that they are successful for the benefit of themselves, their families and their organizations. Thus, we all have a responsibility in our professional and personal capacities to make these programs work, which requires sincere and genuine dedication.

By proactively addressing health and wellness in the work place, combined with such efforts as the First Lady's childhood obesity initiative, and incorporating healthy habits into our homes, we can begin to create a new health paradigm that will ultimately make us more successful as individuals and as a society.