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Executive Education

The impact of employee health and wellbeing on company performance

Exercise and childcare facilities, flexible hours, telecommuting and healthy food options all have a positive impact on the wellbeing of employees. So what are the essential components of an effective employee health and wellness program? And what are the key benefits for both the company and the workforce?

the impact of employee health and banner

‘Nudging’ employees in the right direction

The first step when designing an efficient health and wellness program is to adopt a holistic approach that integrates both effective policies and the necessary resources. HEC Paris Professor Alberto Alemanno emphasizes that psychology studies show that these types of programs need to be based on a ‘choice architecture'. People respond better to 'nudging' or encouragement, as it makes them feel empowered to make the right decisions. Workers who retain their freedom of choice are much more likely to see the long-terms benefits and adhere to a health and wellness program.

Take the example of vacation time. Statistics prove that it increases productivity, but in some countries, it can be culturally difficult to encourage employees to take their full vacation allowance. In the USA, for example, where the average vacation entitlement annual paid leave is only two weeks, the majority of workers are still reluctant to take all of their paid annual leave. This is why some companies are now implementing strategies to encourage employees to take full advantage of their vacation time. PwC, for instance, automatically notifies supervisors if a team member is about to forfeit some of their annual vacation, so that they can then be actively encouraged to take it.

Another tactic companies can adopt to ‘nudge’ colleagues into making the ‘right’ decisions is to offer a healthy selection of food in a buffet format. For Professor Alemanno, offering this element of choice can actively encourage workers to eat a more balanced diet. Even something as basic as providing a fridge gives employees the possibility of bringing healthy lunches to the office, rather than opting for the fast food solution.

Sport and exercise facilities can also play an important role in improving health and wellbeing in the workplace. Social media company Hootsuite has not only installed an on-site gym, but has also adopted the concept of ‘nudging’ their employees in the right direction, by setting up company classes and personal training sessions during working hours to encourage people to take full advantage of the facilities.

 

Healthy people, healthy business

The findings from our Executive Horizons survey are clear. For 64% of participants, the importance of employee health and wellbeing merits a rating of ten out of ten. This comes as no surprise, with respondents citing higher levels of motivation, performance and job satisfaction, and lower levels of stress as key, tangible benefits of wellbeing in the workplace. Likewise, a study from the Queensland University of Technology shows that employees who feel a greater sense of control and ownership over their lives tend to have reduced stress levels in the workplace and are therefore more productive.

It has also been proved that companies with strong health and wellness programs can in fact outperform others in economic terms. Robert McLellan, Chief of Occupational and Environmental

Medicine at nonprofit health system provider Dartmouth-Hitchcock, asserts that there’s a growing body of research that shows integrated approaches to employee health and wellbeing lead to better business outcomes.

Take the industrial automation business TURCK, for instance. It began implementing health and wellness strategies around a decade ago, with initiatives that range from encouraging physical activities to setting up a health clinic and a pharmacy. Five years on, the organization has seen substantial growth in employee engagement, and a turnover rate of only 1% – compared to the industry average of 13%. Just as significantly, the impact of its health and wellness program has led to an 8% increase in profits.

Employee wellness, therefore, goes beyond engagement and is in fact a key driver of profit and growth. 'Healthy people' really do equal 'healthy business'.