Healthier employees are more productive and engaged in their work. They are less likely to call in sick or use vacation time for illnesses. They also perceive their companies as invested in their well-being and as more attractive places to work. However, the risks of an unhealthy workforce are as significant and numerous as the benefits of a healthy one.
In 2014 alone, national health care expenditures in the United States totaled $3 trillion, nearly 17.5 percent of the country’s GDP—more than any other developed nation. Yet, even with such a significant investment, the U.S. also has some of the worst health outcomes. This represents a considerable expense to employers and employees both. Productivity losses related to personal and family health problems cost U.S. employers more than $1,600 per employee per year, or more than $225 billion annually. Meanwhile, insurance premiums have increased by 61 percent since 2005, with worker contributions increasing by 83 percent.
Many companies are proactively seeking to reverse this trend by improving employee health. These efforts are yielding dividends both by reducing health care costs and improving employee well-being, which—beyond the direct benefit to the employee—has been shown to increase engagement and productivity, and provide a myriad of other benefits to employers and their employees.[i] This includes stronger financial performance. A 2013 study found that companies with strong employee health and wellness programs outperformed others on the stock market.[ii]
To achieve these benefits, an increasing number of firms are offering programs that care for their employees’ mental, physical, and emotional health—and are coming up with methods to increase engagement. According to the 2015 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 81 percent of large employers (200 or more employees) and 49 percent of small employers offer employees wellness programs. Of firms offering health benefits and a wellness program, 38 percent of large firms (and 15 percent of small firms) provide employees a financial incentive to participate.
The Boston College Center for Corporate Citizenship’s own research supports these findings. Our 2014 State of Corporate Citizenship report found that more than 70 percent of business executives listed reducing employee health costs as a top business priority, and—importantly—recognized the role of corporate citizenship in helping them achieve that goal. When corporate citizenship programs were integrated into business strategy, more than 90 percent of executives reported success in reducing employee health costs, compared to less than 30 percent who reported success when it was not (see Figure A).
[i] Harter, J. K., Schmidt, F. L., Asplund, J. W., Killham, E. A., & Agrawal, S. (2010). Causal impact of employee work perceptions on the bottom line of organizations. Perspectives on Psychological Science, 5 (4). 378-389.
[ii] Fabius R, Thayer RD, Konicki DL, et al. (2013). The link between workforce health and safety and the health of the bottom line: tracking market performance of companies that nurture a culture of health. Journal of Occupational and Environmental Medicine, 55 (9), 993–1000.