How Will Your Organisation Benefit?
Corporate wellness describes the collective health and fitness status of an organisation's staff. The better the health and fitness level of each employee within an organisation, the higher the organisation's level of corporate wellness. And the higher an organisation's level of corporate wellness, the better employees and organisations perform. Research has shown that corporate wellness programs run at an organisational level are highly effective and that they result in improved employee health, higher productivity and greater profits (Aldana 1998) (The Future at Work Health Report, November 2006). Corporate wellness is worth the investment.
While most organisations care about the wellness of their staff, the reasons for implementing wellness programs within an organisation are becoming more and more financially driven due to the cost savings such programs can offer organisations. Two major reasons why employers invest in health promotion programs are productivity enhancement and image enhancement.
Productivity Enhancement
Corporate wellness programs can improve productivity by reducing staff health risks, helping to manage controllable diseases, reducing the use of avoidable substances, and improving general health and fitness. Performance is higher when employees are physically and emotionally able to work and have the desire to work. Higher performance leads to higher productivity and therefore higher profit levels for the organisation.
How much more productive employees are as a result of a wellness program is an open question but even modest productivity gains can result in higher profits. You know how much more productive you are when you feel well, full of energy, focussed and really want to work. You know you are far more effective in your creative thinking, negotiating, motivating others and strategic planning when you feel good and are motivated yourself. Imagine this impact across a whole division or organisation.
Measuring productivity is difficult and in the past has focussed on absenteeism because it is somewhat easier to quantify. Studies have reported reductions in absenteeism after the implementation of a wellness program. For example, Aldana (1998) reported that there was an average saving of $4.90 for every $1.00 invested in a health promotion program.
However, productivity can also be measured in terms of preventing profit loss. It has been determined for instance, that the potential loss in productivity due to health risks (or poor health) is 6.96% for the average Australian employee. This equates to $3,480 per year for an employee earning $50,000 per year (The Future at Work Health Report, November 2006). Losses of this magnitude per employee have significant financial implications for businesses.
To get an estimate of how much productivity your organisation could gain through a wellness program, visit our Productivity Calculator.
Image Enhancement and Reducing Staff Turnover
Organisations will always say that their staff is their biggest assett. Getting good staff is difficult, so when you do get them, you don't want to lose them. This means not only is it more difficult and costly to get the right employee, but it is also difficult to attract them to your organisation, and then keep them. Staff turnover is estimated to cost 40% of the first year salary of the emmployee. Therefore, even a slight reduction in staff turnover will have major financial benefits.
Corporate wellness programs help to give an organisation a good corporate image. Corporate wellness programs demonstrate that an organisation cares about its staff and helps to set the organisation apart from others, including competitors. A good corporate image increases the retention of current staff and assists an organisation in becoming an employer of choice in the workplace.
Companies cannot survive by competing for skilled employees on the basis of salary alone, and therefore employee benefits such as health promotion programs are a very effective value added solution. If an employee gets a pay rise of $500 per year, it would work out to an increase of about $0.24 an hour. This increase would go unnoticed to many higher paid professionals. But a $500 investment per employee in a wellness program would provide them with a high level health package delivered across an entire year as well as foster ongoing goodwill.