American workers are clearly suffering from low wellbeing, which is contributing to deteriorating morale and customer service as evidenced by a recent Gallup study that shows only 33% of employees are now engaged in their jobs. Yet, despite this crisis, CEOs are largely missing in action, having ceded “employee wellness” to HR and vendors.
CEOs who ignore the wellbeing of their workforces risk becoming less competitive as low employee wellbeing leads to poor corporate performance. If left unchecked, low employee wellbeing will slowly but surely erode employer profits through rising presenteeism, absenteeism, and turnover, and lower productivity and skyrocketing healthcare coverage costs.
Fortunately, employee wellbeing can be improved. Properly implemented, workplace wellbeing does not have to be expensive, but it requires that CEOs and Boards make wellbeing a top strategic priority. This requires a new way of thinking that goes beyond physical wellness programs focused solely on lowering employer health insurance costs.
Wellness vs. Wellbeing
Employee health and chronic illness are worse than most believe. The rule of thumb is that approximately 20 percent of any large group of insureds (predominantly the chronically ill) account for 80 percent of insurers’ claims costs. That means one-fifth of a typical employee population accounts for over 70% of healthcare coverage costs.
Despite growing into an $8-billion-per year industry, traditional workplace wellness programs built around diet, exercise, and smoking cessation have not improved unhealthy lifestyles or reduced chronic illness. Those who’ve been on diets know this reality. And as Mark Twain said, “Giving up smoking is the easiest thing in the world. I know because I’ve done it thousands of times.”
Good physical health and reduced chronic illness cannot be achieved by focusing on physical health alone. Achieving the goals of improved health, reduced chronic illness, and enhanced wellbeing and engagement requires a “whole person” approach that supports wellbeing through behavioral changes and acknowledging the connection between disparate areas of life (e.g., physical health, mental/emotional wellbeing, and financial well-being).
Make employee wellbeing a top leadership priority
What ties this approach together is an underlying culture of employee wellbeing, starting with the premise that employee wellbeing has a greater business priority than anything else, even operational success or profit. That is because success and profit will follow employee wellbeing naturally; and without it, organizations are at serious risk of mediocrity.
This bold aspect is missing from almost all of today’s workplaces. Of course for-profit companies have a fiduciary duty to their shareholders to maximize return on investment. A culture of wellbeing does not ignore those realities, but rather enhances their likelihood.
Wellbeing programs require the active, passionate, and persistent involvement of the CEO. Well-known CEOs including Mark Bertolini at Aetna, Bob Chapman at Barry Wehmiller, and Dave Lagerstrom at Turck show what’s possible by championing wellbeing as their core business strategy. Each has seen dramatic bottom line improvements as a result of their wellbeing efforts.
Boards play a central role and must hold CEOs accountable for improving employee wellbeing and reviewing employee wellbeing results. Too many Boards believe it’s their duty to “squeeze” employee pay and benefits; not nurture. That may be short-term penny-wise, but long-term dollar-foolish. CEOs and Boards must factor wellbeing into all business decisions and ensure it’s an embedded part of how they conduct business.
Foster cultures centered on employee wellbeing
Wellbeing (or the lack thereof) determines an employee’s engagement, productivity, coverage expense, absenteeism, and turnover. Accordingly, this requires that employers understand that the only way to achieve lasting workplace health, while ensuring an engaged, healthy, loyal, and high-energy workforce, is to start with a culture of wellbeing as its foundation.
And while good physical health is important, companies must consider how employees are really doing in all aspects of life, especially their mental/emotional health (which is significantly helped or hindered by workplace conditions), and their financial wellbeing (because when employees experience financial stress, they neglect their physical health and become distracted at work).
Armed with this understanding, CEOs can foster cultures of wellbeing by requiring that all leadership, and especially front line managers, lead wellbeing by example. From the CEO to line managers, all leaders must be incented and held accountable for the health and wellbeing of their people by creating cultures of respect, caring, and value and by leading by example.
Partner with employees via a new compact on health
Wellbeing can help companies take control of employer healthcare costs. Gallup’s Economics of Wellbeing 2016 suggests that employees thriving in wellbeing have 41% lower health-related costs, which can mean a difference of $30 Million for every 10,000 employees.
However, one-size does not fit all, and what works for Google in Silicon Valley will not necessarily translate to an industrial company in the Midwest. Wellbeing programs must include employee input (not just what management thinks they need). Customizing approaches to specific workforces is the key to ensuring engaged employees embrace wellbeing initiatives.
Two particularly good starting points are the CDC Worksite Health Scorecard and the HERO Scorecard, both of which offer online tools for assessing an organization’s employee health and engagement status and other relevant measures.
Workplace wellbeing is more than strategy for cutting costs. It’s a strategic opportunity for boosting profits, share value, and reputation. As Deloitte stated in Well-being: A strategy and a responsibility: “It is our view that expanding well-being programs to encompass what employees want and value is now essential for organizations to treat their people responsibly—as well as to boost their social capital and project an attractive employment brand.”
Creating a workplace culture centered on wellbeing is not particularly expensive, and the returns can be enormous. There’s no downside other than the commitment and focus of leadership to do business differently. So a word of advice. CEOs who ignore the importance of employee wellbeing will be putting themselves and their companies at risk with their employees, their customers, their Boards and shareholders.