24 Feb Company Benefits: The Golden Key to Employee Retention
So across the blogosphere a trend is developing that is disturbing to even the best HR professionals and Benefits Consultants in the marketplace. The exciting news is that the masses are talking benefits. Employees are engaged more than ever in the conversation, as we trudge as a country through Health Care Reform. This has brought awareness and educational inquiries about Heath Care that previously existed in a much smaller minority. But, this is not the concern. The concern the employees are talking, but few companies are listening. How many job decisions are being made based on the company benefit package? This factor is weighing in more and more heavily in the job prospect’s arsenal of decision making tools. ”Total Compensation” has become familiar to those on the job hunt, but more importantly to your existing employees. With the ease of automated job search agents and the eagerness of recruiters, employers need to show employees they are valued members of the workplace more than ever before. Take a look at this great article from Monster.com:
COMPANY BENEFITS FOR EMPLOYEE RETENTION
“A company is an organic entity in many ways made up of various parts which need to work in harmony to be successful. If the entity isn’t ‘well,’ it couldn’t prosper to its maximum. The energy of keeping a company growing and successful must be a two way street where the company gives back to those who contribute to its success.” – David Gellman
Results from two recent Monster Canada polls show a strong majority of Canadian workers interested in corporate wellness programs and a minority of employers, actually offering them.
Monster asked, “Given the labor shortage, what is your employer doing to try and keep you?” Out of 3,594 responses, 82% reported “nothing at all,” while only 9% chose “allowing for flexible scheduling and other work-life balance initiatives” and 8% chose “offering a pay raise.”
In a second poll Monster asked, “Does your company offer corporate wellness programs such as fitness/nutritional coaching, gym memberships, training seminars etc.?” 68% of 2,857 respondents replied “no, but I wish they did,” while 20% chose “yes, and I really appreciate them.” A mere 10% weren’t interested in such a program.
These numbers send a clear message: 82% of employees report that their employer is doing nothing to keep them and 88% of workers see great value in corporate wellness programs, even though only 20% of them have access to such services.
In recent years, Canadian employers have seen costs associated with prescription drugs, absenteeism, and disability leaves (both short- and long-term) skyrocket. Statistics Canada reports that Canadian workers missed 70 billion workdays for personal reasons in 2000. Employers in this country are losing billions of dollars every year on absenteeism costs alone. But it doesn’t have to be this way. According to the Industrial Accident Prevention Association, moderate workplace interventions can make significant improvements and shave off at least 20% of these costs. Studies have repeatedly proven that comprehensive corporate wellness programs return an average $3 for every dollar spent.
Think about it: workers spend, on average, 60% of their waking hours at work, and likely one or more meals and snacks are eaten at work. The workplace is, thus, an ideal setting for positively influencing Canadians’ habits and lifestyle.
If Canadian workers find tremendous value in wellness programs and research agrees, why aren’t their employers as convinced?
The Wellness Concept
Some are uncertain of what corporate wellness even means. Mok Lan Ho, Director of Benefits of the Total Compensation Group at Scotiabank, admits that employers often struggle with the concept of wellness. “Many companies face the challenge of determining what wellness means to the organization and within its cultural environment. Most define wellness in the form of activities and events.”
Given that corporate wellness has been conventionally viewed as a soft item or issue, many employers are dubious about making such a large commitment and investment of their resources.
Rob Weingust, a former events and meeting planner and founder of Spa Party Events agrees that, historically, most companies have done some nice things for their employees, be it an annual holiday party, barbeque, or bonus; however, employers see these gestures and events as money thrown away. “They do these events because they have to, but there’s no result, no return for them,” he says.
A corporate wellness program, though, consists of more than a steak dinner and an office picnic. “’Wellness’ whether at the personal or organizational level is a long-term response and commitment, not a one-time event,” explains Ho. “Intuitively, we know that ‘wellness’ and a healthy workforce make good business sense, but certain fundamentals are crucial first steps. For example, identifying key wellness needs relevant to the organization; defining a framework including metrics to guide supporting activities, policies and practices that align consistently toward targeted objectives.”
The Business Case for Corporate Wellness
Dr. Alexandra Gellman, Founder of Guru and Associates Wellness Inc., a company specializing in bringing clients to their maximum wellness potential, says she sees the effects of unhealthy workplaces all the time. “People are apathetic,” she says. “I think it comes from years of discouragement. I think people are really, really broken. I see it in my practice every day. They’re broken and they’re discouraged.”
Gellman, who is a Doctor of Homeopathy, an Iridologist, and a Registered Behavioral Coach, encounters many employees who tried to speak out in their workplaces once or twice and it backfired. “Unfortunately, they made that one or two episodes the norm and never spoke out again,” she concedes. “People just don’t feel like they can make a difference in their organization.”
Low employee morale has some serious consequences for workers’ health, and in turn, the success of Canadian businesses.
In their 2001 study on work-family conflict, Dr. Linda Duxbury and Dr. Christopher Higgins concluded that work-family balance has significantly deteriorated in Canada over the past ten years. “High levels of role overload and work to family interference affects the organization’s bottom line,” reports Dr. Higgins. “These employees are significantly less committed to the organization and satisfied with their jobs. They also report significantly higher levels of job stress, absenteeism, EAP use, prescription drug use, and intent to turnover.”
Take a look at some of the costs associated with work-life conflict, stress, poor physical health, and mental illness in the workplace:
- The direct cost of absenteeism due to high work-life conflict is approximately $5.48 billion per year for Canadian organizations. If indirect costs are included, this number rises to as much $10 billion per year. (Duxbury & Higgins)
- Stress-related absences cost Canadian employers about $3.5 billion each year. (Statscan)
- Health care expenditures are nearly 50% greater for workers who report high levels of stress. (Statscan)
- 20% of Canadian workers experience a stress-related illness each year. (Canadian Mental Health Association)
- 83.1% of Canadian workers identified stress as the major health concern within their organization. (Canadian Mental Health Association)
- Stress in a business contributes to 19% of absenteeism costs, 40% of turnover costs, 55% of EAP costs, 30% of STD and LTD costs, 60% of workplace accidents, and 10% of drug plan costs. (Chrysalis Performance Inc research)
- Every smoker costs a company $2,500 per year in increased absenteeism, lost productivity, increased group benefit insurance costs, and increased facility maintenance. (Conference Board of Canada)
- Employers pay an extra $597 per year for each employee who consumes excessive amounts of alcohol. (Lowe “Dollars and Cents”)
- Employers pay an extra $488 per year for every sedentary employee. (Lowe)
- Direct costs of productivity loss from clinically diagnosed mental illness is in excess of $11 billion per year in Canada; this number triples to $33 billion when indirect costs of health and social services are counted. (Martin Shain et al. “Mental Health and Substance Abuse at Work”)
The good news?
Employers can significantly reduce these figures. As Mok Lan Ho points out, many chronic health conditions are lifestyle-related, and therefore preventable. “For an organization, advocating ‘wellness’ and healthy lifestyles is a common-sense approach to mitigating the compounding impact of poor health,” she explains. “Health cost is the end result of a health profile. A corporate wellness strategy focusing on prevention and raising awareness offers cost avoidance opportunity, one case at a time.”
What Employers Can Do
According to Michael Boyce, VP of Corporate and Business Development for GoodLife Fitness, only 14-15% of the Canadian population works out regularly at a fitness facility. When corporations get involved in a fitness program, however, they can double that number and watch their savings soar. “A corporation, by supporting, sponsoring, and getting involved with a club like ours can bring that 15% up to 30%,” he explains. That said, Boyce is quick to point out that 70% of the employee population still hasn’t been addressed and can’t be addressed through fitness alone. “We have to offer some other things to get them on the road to a healthier lifestyle,” he adds. With that in mind, GoodLife has taken a more comprehensive approach to wellness services. In addition to its gym memberships, the company offers partnering corporations services such as lunch-and-learn sessions with professional speakers, corporate challenges, health and wellness fairs, and most recently, stretch breaks which brings GoodLife trainers right to businesses, holding stretch classes for employees on-site.
As one of Canada’s Top 50 Employers for the third consecutive year, Scotiabank adopted a strategic approach to wellness in 2004. As Mok Lan Ho explains, the company recognized that wellness must be a consistent and long-term focus, going beyond the regular wellness-related activities and campaigns. Thus, it created a ‘wellness framework’ premised on integration of healthcare providers’ service, leadership and targeted communication. This framework guides and validates the company’s ongoing wellness initiatives, advocating prevention and continuum of care philosophy. The company also places great importance in providing career growth and development opportunities, which is evidenced in its employee tenure, well above the norm.
Wellness elements incorporated in Scotiabank’s program include:
- EAPs (employee assistance program)
- Work-life solutions and support services – healthy lifestyle services which support the needs of employees at different stages in their lives (nutrition management, career planning, new mothers, dependent care, resilience coaching)
- Negotiated discounts for external social programs including fitness clubs
- Workplace policies and programs that assist employees to manage their work-life needs (such as flexibility in work arrangements)
From a wellness guru perspective, Dr. Alexandra Gellman uses a four-point approach she calls the “four pillars of life” in establishing corporate wellness. To her, then, wellness is achieved by maintaining a healthy body through good nutrition and exercise (pillar 1: physical); by maintaining an identity separate from work and family, along with good work-life balance (pillar 2: life passion); by responding in a healthy and positive way to life’s challenges (pillar 3: positive emotional responses to life’s challenges); and by taking quiet time to be alone and at peace (pillar 4: peace of mind).
The Bottom Line: Wellness ROI
Essentially, for every dollar spent on wellness promotion, a company can expect a return of between $1.15 and $8.00, with the most popular return on investment coming in at about $3. Here are a few examples the Industrial Accident Prevention Association (IAPA) cites:
- BC Hydro – saved $3 for every $1 spent on a wellness program.
- Canada Life Insurance – saved $3.43 for every $1 spent on a fitness program.
- Pillsbury Company – saved $3.63 in health-related costs for every $1 spent on a wellness program.
- Coors Brewing Company – saved $6.15 for every $1 spent on a fitness program.
As a general rule, companies don’t really start seeing the pay-offs of corporate wellness until a few years in. Zero-Sum Accounting Services Inc., a Toronto-based firm, conducted its first wellness conference earlier this year. “While we are still in the early stages,” explains Irene Belvedere, Director of Operations for the company, “the process has helped with management of client priorities and team building. Employees seem more excited about work and how they fit in.” The company has hired on The Gellman’s business, Guru & Associates, and they’re already planning on holding three conferences this year.
Canada’s Talent Shortage: The Not-So-Wild Card
With an intensifying labor shortage and aging population, the demand for corporate wellness programs has never been greater, as workers have to assume more responsibility.
David Gellman, a chartered accountant turned reverend, now works alongside his wife Dr. Alexandra Gellman as part of Guru and Associates Wellness Inc. “The labor shortage seems to be causing fewer people to have to provide more services to their employers,” Reverend Gellman observes. “Unfortunately this results in greater employee illness and stress, and the cost of this in productivity is far reaching for its effects will continue well into the future and make for harder succession.”
Gellman contends that the need to educate the employer is greater. “I’m reminded of the old saying about being ‘penny-wise and pound-foolish’,” he says. “A small investment in their employees today will reap long term benefits for companies for many years to come.”
GoodLife’s Boyce concurs. “People want a health and wellness program. As the labor shortage comes upon us, the war for talent is going to get nasty. Companies that adopt a wellness program, encourage good work-life balance, and allow their employees to be the best they can, will win. That’s all there is to it.”
Like Boyce, Spa Party Events’ Weingust sees corporate wellness as a necessity. “Those employers who have wellness programs will really see their productivity and bottom line increase. They will be the world’s leaders. Those who don’t will fall behind. It’s plain and simple.”
Employers are discovering that while generous salaries, benefits, and perks may attract candidates, it’s the workplace culture that keeps employees.
“Retention is about listening and working with the employees,” says Reverend Gellman. “It is essential to create a safe forum where both the employee and the employer can voice their wants and needs. We spend too much time guessing and not enough time asking. By employers understanding the wants and needs of the employees, they can help them achieve them, and therefore foster tremendous productivity and growth and loyalty from those employees. At the same time, if the employees understood better the actual wants and needs of the employers then they could help contribute much better to the meeting of the corporate goals and would probably help further define the directions the company can grow in. It is an atmosphere of mutual benefit and respect which is needed.”
As the IAPA points out, it’s unrealistic to expect Canadian organizations not to, at times, make high demands on their employees. As long as employees are given appropriate control over the way they do their jobs, feel appreciated and supported, most can cope with high demands when required.
Adopting a corporate wellness program won’t change an organization overnight. It requires serious commitment, long-term goals, and strategic planning. At this point, as Weingust says, “If employers aren’t spending money, they’re losing money.”
‘’Thirteen years ago, [corporate wellness] wasn’t a topic of conversation. As it’s becoming more of a priority of the Canadian government – especially with fitness initiatives to fight the obesity epidemic – and as it becomes a more prominent topic of conversation for average Canadians, it becomes a topic of conversation for corporations and what can they do about it,” Boyce says. “When you add in the labor shortage and the war for talent, then it’s no longer a matter of businesses saying ‘is this something we should do?’; rather, it’s ‘we have to get on this right away to keep our good people and attract new good people’”.
When Weingust first started his Spa Party events business a few years ago, corporate clients were generally resistant to the idea, and he actually had more of a business doing bridal showers and home parties. Then, the meeting and event planners started calling. And now? “Now, I’m getting calls from the HR departments. That’s a sure sign that people in HR are recognizing the benefits of what we do,” he says.