As companies strive to keep workers healthier and stem the tide of higher health care costs, they will continue to embrace health and productivity programs as a solution. According to the 2013/2014 Staying@Work Survey, conducted by Towers Watson, a global professional services company, and the National Business Group on Health, employers will have to address lifestyle risk issues, improve employee engagement and articulate a strategy to establish a workplace health culture, an essential factor for success.
Respondents in nearly all of the countries or regions that participated in this first ever global version of the study reported the same three lifestyle risks as the biggest workforce issues: stress, obesity and lack of physical activity. These risk factors result in increased employee illness, higher medical costs and lost productivity due to unplanned absence and decreased efficiency at work.
To combat these issues, companies have to overcome poor employee engagement. Nearly eight in 10 (77%) employers view a lack of employee engagement as the biggest obstacle to changing behavior. Despite offering a variety of health and productivity programs, employers report that actual program participation is low.
“Companies have long maintained that a healthier workforce is a more productive workforce, and many are considering innovative tactics to improve employee health and well-being,” said Shelly Wolff, senior health care consultant at Towers Watson. “But along with the urgency of health care reform and the coming excise tax, there is a realization that companies need to manage these programs more effectively and encourage employee participation and engagement. An essential part of increasing engagement and success is for companies to link a health and productivity strategy to their overall employee value proposition.”
Use of Incentives and Penalties to Hold Employees Accountable
Seven in 10 U.S. companies identify developing a workplace culture where employees are responsible for their health as necessary and understand its importance as a top priority of their health and productivity programs. Employers are increasing use of financial incentives, specifically penalties and outcome-based incentives, to hold workers more accountable and improve health outcomes.
In 2014, almost four in 10 (36%) U.S. companies will use penalties such as an increase in premiums and deductibles for individuals who do not complete the requirements of health management activities (with a jump to 61% for 2015/2016). Outcome-based incentives that reward or penalize employees based on tobacco use will grow from 54% next year to 71% in 2015/2016. What’s more, rewards or penalties for other biometric outcomes (e.g., health-contingent targets such as BMI, blood pressure or cholesterol level) will dramatically increase from 26% in 2014 to 68% in 2015/2016.
Need for a Clearly Articulated Strategy
Nearly half of U.S. respondents (49%) believe that health and productivity programs are essential, and 84% plan to increase support of these programs over the next two years. However, only three in 10 respond that they have effectively communicated a strategy and value proposition, making it difficult for employees to understand the purpose of these programs and their roles in them.
Driven by the imperative to have a high-performing health care program that is cost effective, avoids the 2018 excise tax and encourages a healthy workforce, companies are beginning to understand the importance and value of an organized approach. Virtually all employers (94%) plan to articulate a health and productivity strategy with stated objectives in the next three years.
Effective Health Management Programs Foster Behavior Change
In the U.S., highly effective companies (where employees are more engaged in their health and well-being) have a differential in annual health care costs of more than $1,600 per employee. According to the survey, these companies are
“More than ever, employers view health as a total business issue that links to worker performance. Highly effective organizations do a number of things differently, and their results are far better than those of their peers,” said Helen Darling, president of the National Business Group on Health. “They take a holistic view of health and productivity programs and benefits to foster a culture of health in their workplaces and promote healthy lifestyles, and that approach will serve them well in the years to come.”
About the Survey
The 2013/2014 Towers Watson Staying@Work Survey was conducted between May and July 2013 in North America, Latin America, Europe and Asia by a total of 892 employers. The countries with the leading number of responses include: the U.S. (199), Canada (114), China (85), Singapore (87) and India (87). Half of the respondents have their workforces located in multiple countries, and respondents operate in all major industry sectors.
In the U.S., Towers Watson and the National Business Group on Health jointly sponsored the survey. Of the 199 participants in the U.S., 59% are public, 22% are private and 19% are nonprofit or government agencies.
About the National Business Group on Health
The National Business Group on Health is the nation's only non-profit organization devoted exclusively to representing large employers' perspective on national health policy issues and providing practical solutions to its members' most important health care problems. The Business Group helps drive today's health agenda while promoting ideas for controlling health care costs, improving patient safety and quality of care and sharing best practices in health benefits management with senior benefits, HR professionals, and medical directors from leading corporations. Business Group members, which include 66 Fortune 100 companies, provide health coverage for more than 50 million U.S. workers, retirees and their families. For more information, visit www.businessgrouphealth.org.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at towerswatson.com.
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