2CRisk Health & Wellness Upcoming Release

1.
19 January 2012
Workforce Health and Wellbeing
Investing in employee health does deliver a return
Teasing out the business case from the warm and fuzzy factors related to
employee wellness was never more important.
For decades organisations have associated productivity drivers primarily with plant efficiency,
inventory control and human resource management. This has meant that considerations about
the impact of workforce wellbeing on productivity have been seen as the poor relation. There
are a number of reasons why this has occurred, and perhaps one of the principal reasons is that
it has traditionally been very difficult to measure the positive impact of a healthy workforce.
More recently, factors such as increased social responsibility and an ageing workforce have
influenced organisations investment in employee health and wellbeing programs, but the
challenge of measuring ROI persists.
The area of workforce health encompasses a number of complex and compounding factors,
which adds to the challenge of quantifying benefits and justifying related expenses. Feel good
factors don’t cut the mustard in tight economic times, and organisations often see health and
wellbeing programs as an area that can be cut back when the bottom line is under pressure.
The ‘Working toward Wellness’ report, published by the World Economic Forum in 2007, is one
of several recent publications that are starting to support the case for investment in such
programs:
‘…..the benefits from improving the general wellbeing of a workforce indicate a likely return of
three to one or more…’
Copyright 2011. All rights reserved. Patent Pending Application No. PCT/AU2011/000934

2. Tracking the cost and risk of employee ill health provides a baseline measure from which to
assess return on investment in wellness. Australian companies lose an estimated $17 billion
per year in productivity to absenteeism (Price WaterHouse Coopers report, Workplace
Wellness in Australia, 2007), and in the US this figure rises to a staggering $74 billion (The
Hidden Cost of Absenteeism, C. Hall 2010), suggesting perhaps that that investment in
employee health and wellbeing is a critical part of sound business strategy.
The reasons why workforce wellness is essential are often unseen, intangible and therefore
difficult to quantify. Terms such as corporate image and job satisfaction are closely linked to
employee wellness, and have important relevance in attracting staff in a competitive market.
Recognising this, companies now frequently use mechanisms such as employee surveys in an
effort to quantify and track satisfaction levels and progress towards the often identified
aspiration of being “an employer of choice”.
Absenteeism and poor staff retention are both tangible measures related to lack of employee
wellness, however these factors can be “lost in translation” as they may, and quite often do,
have other root causes. These might include environmental factors, poor work design,
incompatible rosters and low morale, to name a few.
In addition to the disruption and ensuing cost and difficulties of recruitment, the loss of highly
skilled, competent and experienced employees – often with a wealth of institutional knowledge
‐ presents a substantial hidden cost to the employer. According to a survey conducted by
Mercer Human Resources Consulting in Australia and New Zealand, about 25% of employees
were planning on looking for a new job within the next 12 months and the associated cost could
be equated to anything from 50% to 150% of an individual’s annual salary.
What we also know is that the workplace has a significant and often long lasting impact on
people’s health and wellbeing, and poor employee health management leads to work‐related ill
health, high levels of absenteeism, presenteeism and increased staff turnover. This impacts on
an organisation’s profitability and makes it harder to compete with other similar organisations
in a competitive marketplace.
From an individual’s perspective, work forms a very important part of our whole being and it is
measurable not only in terms of physical and mental health, but in our social integration and
community participation. We have considered the costs to companies of sickness and
absenteeism. The social cost of complete disengagement from the workforce is a seasoned topic
of debate in the political arena because of the financial and moral implications of
unemployment.
In 2012, organisations that link investment in health and wellbeing to improved productivity and
staff retention will most certainly be the ones to benefit from greater bottom line performance.
For the individual, it represents a point of difference in their job selection and who they regard
as an employer of choice. It sends a very clear message around core values and culture ‐ that
Copyright 2011. All rights reserved. Patent Pending Application No. PCT/AU2011/000934

3. they will genuinely be better looked after and more likely to be retained in the longer term. In
the current economic climate this is a key driver for choice of employer.
For the organisation, there are meaningful and now quantifiable benefits to investing in
targeted health and wellbeing programs. In addition to the benefits already discussed,
organisations that are better able to target and understand the health profiles of their
workforce, will in turn enjoy a measurable return on investment and a far happier and healthier
workforce.
If you would like to find out more about how 2CRisk can help you tailor, manage and monitor
your Health and Wellbeing Program you can contact them on +61 1300 736 361 or e‐mail
info@2crisk.com.au
Copyright 2011. All rights reserved. Patent Pending Application No. PCT/AU2011/000934