Canadian companies using incentives to bolster employees’ health and wellness
Canadian businesses are seeking ways to increase their employee productivity and are experimenting with new approaches to address the rising health care costs and increased employee stress, disability claims, and absence. Companies that are being effective in addressing these issues are using approaches such as monetary reward systems to encourage and help fund staff in making healthier lifestyle choices. These types of incentives are more of a common practice in the US, however, a new survey conducted by global professional services company Towers Watson reveals that the number of Canadian organizations implementing this type of strategy is on the rise.
Over one quarter (26%) of Canadian employers are intending to offer some type of financial reward in 2012 to employees whom participate in health management programs, according to Tower Watson’s 2011/2012 Staying@Work survey. This is double the percentage of companies that currently do so (13%). Wendy Poirier, Health and Group Benefits Leader for Towers Watson in Canada, remarked “we are seeing employers increasingly realize the importance that health and productivity programs can play in their efforts to control health care costs and maintain a productive workforce. While the outcomes of any one tactic can’t be guaranteed, high effectiveness companies with thoughtful multi-faceted programs are reaping clear returns on their investments in workforce health.”
Although there is a greater awareness of mental health conditions in today’s society, they continue to be the most common reason for disability claims in Canada at 83% of total short-term disability claims. They also account for 85% of long-term disability claims. Many companies also report that employee stress is an important and growing business issue. To address this, 61% of respondents plan to add a mental health focus in with their physical health programs over the next two years. The top reasons given for workplace stress revealed in this survey were:
- Excessive workloads
- Lack of work/life balance
- Unclear job expectations
- Conflicting job expectations
- Inadequate staffing
Although these health programs may seem like a financial burden to organization, Keri Alletson, Senior Consultant and a member of the research team added, “Over the past few years we’ve seen employers asking employees to work longer hours and to do more with less, leaving less time for healthy activities like going to the gym, or eating properly. At the same time, people are worrying about job security and their personal wellbeing. Together, these factors can add up and take a serious toll on both physical and mental health, as well as increase absence from work and presenteeism. In addition to the individual consequence, the business consequences — higher health care costs, reduced work performance and lost productivity — can be significant.”
In 2011, health and productivity costs as a percentage of payroll totaled just over 17% in Canada, up from 12.6% in 2009. Organizations with effective health and productivity practices are achieving significantly better business outcomes. The benefits include a lower average turnover rate (8% instead of 10.4%), fewer unplanned absences — and for publically traded companies, an 18% market premium compared to organizations with low health and productivity effectiveness.
