Employee health can hold a major influence on an organization's productivity. In fact, 38 percent of all absences are related to health issues, and employers must understand the root cause of poor health and its relationship to absences if they are to improve productivity, says Julie Norville, senior vice president of national absence management consulting practice leader for Aon Hewitt, a human resources consulting firm in Chicago.
According to a recent Aon Hewitt survey, 60 percent of employers plan to create a health and absence strategy in the next three to five years. To do so, employers must first understand how employee health conditions are tied to time away from work through various claims activities.
"For quite some time, employers have done a lot of data analytics around health spend and pharmacy spend, the prevalence of health risk appraisals, biometric medical data to understand the health of employees and how to control the medical spend, but they haven't tied in the relationship to work performance and the ability to be at work," Norville says.
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Employers also must be committed to employee engagement if they expect to improve health and productivity, and engagement should be customized by demographics, Norville says. For instance, engaging a 50-year-old male employee who is out of shape requires a different strategy than engaging a 23-year-old female employee who is healthy. Both are motivated by different factors. If an employer wants its diverse work force engaged, it has to figure out what appeals to the various segments.
"A lot of employers have some sort of wellness program today, but most of our clients are questioning or seeing a lack of sustainable engagement in those programs," Norville says. "They're not seeing improvements in those conditions or biometrics. So employee engagement seems to be the biggest issue that employers are struggling with."
Norville finds that senior leadership members are becoming increasingly involved with their companies' wellness programs, particularly as they look at the investments made in the last 10 years. Despite wellness investments, health care spending continues to rise every year, which is causing many senior leaders to question some wellness tactics.
Instead of focusing on only health care spend, senior leaders should also look at how wellness impacts the bottom line from a productivity standpoint. Absenteeism accounts for 8 percent of payroll, Norville says, and that's nearly as much as medical spend. Ultimately, absenteeism revolves around the ability to complete work, which influences to ability to make products. When the ability to make products is negatively impacted, an employer can expect to see its bottom line suffer.
"It's about the direct correlation of probability, so we're seeing more awareness in terms of absenteeism as a business risk that can be managed and the relationship of absenteeism to health strategies that are working or not working when it comes to improving health," Norville says.
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