The Business Benefits of a Healthy Workforce

Companies with strong health and wellness programs outperform others on the stock market, and some experts suggest the investment community could benefit from scrutinizing health and wellness metrics when they value companies.

Robert McLellan, chief of occupational and environmental medicine at Dartmouth-Hitchcock, is one of those experts. He’s co-author of a new paper in the Journal of Occupational and Environmental Medicine that proposes an Integrated Health and Safety Index, or HIS, modeled after the Dow Jones Sustainability Index. It would help investors “assess the business value” of health and safety.

The paper cites one study that tracked a theoretical $10,000 investment over the course of 13 to 15 years and found companies with “strong health, safety, and environmental programs” outperformed the S&P 500.

“We’ve put together a set of metrics that could be used similarly [to the Dow Jones Sustainability Index] by the investment community to better understand the value, in a monetary way, of a particular industry based on the health and safety of its workforce,” McLellan said of the paper’s proposal.

There’s clearly value to employee wellness, but measuring it is complicated

McLellan and others in the field are entering uncharted waters. Although traditional concerns about health and safety – such as preventing accidents – have been part of the workplace for decades, the overall business value of wellness is just now emerging.

McLellan said there’s a “growing body of research” that shows integrated approaches to employee health, safety, and wellbeing lead to better business outcomes.

There’s still a lot of exploration needed as to why that’s the case. “The company may simply be run better,” said McLellan. Strong stock market performance and robust health and safety programs may be among the many symptoms of good management, and as his paper notes, “correlation is not the same as causation.”

Northeastern University Professor Jack Dennerlein, a specialist in occupational health and injury prevention, said “we still need to do better” at measuring the benefits of health and wellbeing in the workplace.

The traditional argument, for American businesses, is that health care costs are rising, and encouraging worker health is a way to keep those costs down. However, studies are “not showing a lot of cost savings right now, in terms of the current approaches that are being peddled out there,” said Dennerlein.

That’s in part because the benefits of a healthy workforce show up elsewhere in a company’s data – in increased productivity, lower absenteeism, improvements in talent acquisition and retention, and other areas not directly reflected in health care costs.

Nicolaas Pronk, vice president for health management and chief science officer at Health Partners, in Minneapolis, put it this way: “What’s the value of people coming to work with a smile? What’s the value of having people on the phone responding to your customers in a good mood, who can solve problems because they’re there, they’re present, they’re working with attention to detail? What’s the value of individual workers working well together in teams?”

The business value related to such things is immense, but it can be “difficult” to measure, he said.

“There is emerging and promising evidence on productivity outcomes” associated with integrated health and safety strategies, said Pronk, but there’s less information about reductions in health care costs.

He suggested that’s because measuring such costs requires the existence of “negative outcomes” – the costs that accrue as the result of obesity, cardiovascular disease, smoking habits, workplace accidents, and other health issues. Without those health problems and their associated costs, there’s less to measure, and that makes it more difficult to connect the dots between health and wellness strategies and reductions in health care expenditures. An effective health and wellness program “pushes the negative outcome further away,” Pronk explained, because health problems will occur later in workers’ lives. For instance, an employee might require medication for high cholesterol at the age of 54 as opposed to 49. “It takes a long time to pick up the signal” when a wellness program is working, Pronk said.

“A lot of people say these programs take too long to show an impact,” he elaborated, but that doesn’t mean they aren’t working. “They work immediately,” he said. “People get the benefit of health immediately. They feel better. They come to work. You start seeing it over time.”

Successful companies value healthy workers

Pronk named one company, TURCK, as a prime example.

It’s a medium sized company that manufactures industrial automation products, with about 500 local employees. Health Partners began working with the company about a decade ago, starting with small programs to encourage physical activity. They eventually added a health clinic, a pharmacy, a health coach, prevention messaging, and SafeWell strategies. SafeWell is a series of guidelines, established by Harvard T. H. Chan School of Public Health’s Center for Work, Health, & Well-Being, that encourages “integrated approaches to worker health that foster strategic coordination of policies, programs, and practices designed to simultaneously prevent work-related injuries and illnesses and enhance overall health and wellbeing at work and home.”

About five years into the establishment of these efforts, TURCK was able to show that they’re “linked to about eight percent profit from operations,” Pronk said, adding, “that’s a huge impact for this company.”

Among other things, TURCK has an employee turnover rate of about one percent in an industry where the average turnover is about 13 percent, Pronk said.

The overall business value of wellness is just now emerging.

The company is one of 18 organizations accredited by the HealthLead program, which is run by US Healthiest, a non-profit funded, in part, by the CDC. Other accredited companies include Target, Nationwide Insurance, Intel, and The Ohio State University.

The National Institute for Occupational Health and Safety, NIOSH, has named companies like Johnson & Johnson and The Dow Chemical Company as other leaders in this area. In health care, organizations like Health Partners and Dartmouth-Hitchcock are recognized for leadership in integrated health and wellness strategies.

An integrated approach is key

Integrated means tying together a number of factors that affect workers, including emotional, social, mental, physical, financial, and intellectual health, explained Pronk. “The different dimensions come together, and, all of a sudden, worker health and wellbeing starts to show up as a main driver as why [employees] want to work for the company.”

The integrated approach might include supporting workers with financial savings, continuing education, and their social and family lives, he said, providing a few examples. Other examples could include things like health coaching, promoting healthful foods in the cafeteria, providing digital fitness devices and apps, scheduling flu shots in the office, offering breast-feeding support for new mothers, providing resources for dealing with aging parents, and hiring counselors to assist employees with emotional issues, to name just a few other things. A key feature of integrated health programs is they’re tailored to individual organizations. A large bank with 10,000 workers will need a different strategy than a small manufacturer with 150 employees.

McLellan described a program at Dartmouth-Hitchcock that includes Safety Wellness Action Teams, or SWAT. If a particular work group has substantially higher injury rates, for instance, the SWAT program will invite that group’s leaders and workers to participate in a holistic assessment of multiple factors, including data related to safety, work performance, patient satisfaction (since it’s a health care organization), absenteeism, general lifestyle issues, and other things. Based on that assessment, SWAT might recommend anything from chaplaincy intervention to nutritional programs or physical conditioning, McLellan said.

The integrated approach touches on a number of factors, Pronk explained. These include things like “worker performance, worker wellbeing, being an employer of choice, being a safe workplace, being a healthy workplace, [and] making sure people feel good about the job they have, feel good about coming to work.”

For such an integrated health and safety program to show measurable benefits, it needs to be built into “the very DNA of a company,” McLellan said, adding, “It’s actually kind of at the core of what the business does,” as opposed to being a program of the month or a one-off experiment. It “needs to be aligned with that particular company’s culture and business goals.”

Integrated approaches to health, safety, and wellbeing lead to better business outcomes.

“It is a mindset,” said Dennerlein. “Management commitment has to be able to walk the talk.”

You need to “lead by example,” said Pronk, “and you can’t afford not to do it.”

“For a company to perform well as an organization, it needs healthy people, and the fewer healthy people you have, the worse your business outcomes,” he said.

An integrated approach to health and wellness isn’t something to do “just because someone says it’s a good idea,” he continued. “I think it really is a necessity if you want to be a high performing company.”

Drs. Dennerlein and Pronk teach in Work Health and Well-being: Achieving Total Worker Health at the Harvard T.H. Chan School of Public Health.