Employers Offering Financial Rewards for Healthy Behavior

Dec. 17, 2007
Almost half of companies interviewed offer financial incentives to help workers improve health.

A study conducted in November of 2007 by the National Business Group on Health and Watson Wyatt, revealed that almost half (46%) of the 355 large employers interviewed said they currently offer financial incentives to their workforces to encourage healthy behaviors.

Workplace health programs resulted in lower costs for sick leave (five times); long-term disability (four and one-half times); short-term disability (four times lower); and general health coverage (three and one-half times).

To pay for these programs employers spent a median 21.2% of payroll on direct and indirect costs of programs for wellness, sick leave and disability.

Those same companies saw corporate financial gains including a 20% higher revenue per employee. The market value of the company was 16.1% higher and shareholders saw 57% higher returns (from 2004 to 2006.)

"Global competition and pressure for greater efficiency are causing employers to seek new ways to help manage benefit costs and increase worker output. Increasingly, companies are looking at the health of their workers as the new growth engine to stave off health care inflation and keep employees on the job and productive," said Shelly Wolff, national practice leader for health and productivity at Watson Wyatt.

Companies Aim to Encourage Healthy Behaviors
Offer Now or in 2008 Plan to Implement in 2009
Provide tools that encourage safety and wellness 85% 7%
Promote emotional health 82% 7%
Educate employees on safety at work 63% 9%
Involve senior management in promoting health and productivity 52% 16%
Offer economic incentives 46% 26%
Educate medical providers on work environment and health initiatives 33% 7%
Connect wellness programs to broader initiatives 29% 26%
Integrate health programs with paid leave 26% 12%
And employees can positively affect health-care costs since preventable factors are at the top of the list of health-related items affecting business performance. The leading health issues are lifestyle risks (42%), physical conditions (34%), chronic conditions (31%), unscheduled absences (30%) and mental health conditions (23%).

Looking toward 2008, LuAnn Heine, director of the Institute on the Costs and Health Effects of Obesity for the National Business Group on Health says that employers are especially focused on consumer engagement. "We will see expanded use of incentives to spur not just participation but continued involvement in health improvement initiatives. Incentives are designed to overcome the tendency we all share to favor pleasure today over good health tomorrow. In addition, companies continue to work on building their own "culture of health" and changing the environment at work to make healthy choices a "downhill slide."

For more information on this topic including the National Business Group on Health Awards for 2007 click here.

She points out that the new choices will include healthier food in company cafeterias, at meetings and catered events, and in vending machines as well as more opportunities than ever for walking programs, fitness offerings and weight loss initiatives (including individual support and coaching as well as group campaigns and team competitions) at work.
About the Author

Adrienne Selko | Senior Editor

Focus: Workforce, Talent 

Follow Me on Twitter: @ASelkoIW

Bio: Adrienne Selko has written about many topics over the 17 years she has been with the publication and currently focuses on workforce development strategies. Previously Adrienne was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck? which made the Cleveland Plain Dealer's best sellers list. She is also a senior editor at Material Handling & Logistics and EHS Today

Editorial mission statement: Manufacturing is the enviable position of creating products, processes and policies that solve the world’s problems. When the industry stepped up to manufacture what was necessary to combat the pandemic, it revealed its true nature. My goal is to showcase the sector’s ability to address a broad range of workforce issues including technology, training, diversity & inclusion, with a goal of enticing future generations to join this amazing sector.

Why I find manufacturing interesting: On my first day working for a company that made medical equipment such as MRIs, I toured the plant floor. On every wall was a photo of a person, mostly children. I asked my supervisor why this was the case and he said that the work we do at this company has saved these people’s lives. “We never forget how important our work is and everyone’s contribution to that.” From that moment on I was hooked on manufacturing.

I have talked with many people in this field who have transformed their own career development to assist others. For example, companies are hiring those with disabilities, those previously incarcerated and other talent pools that have been underutilized. I have talked with leaders who have brought out the best in their workforce, as well as employees doing their best work while doing good for the world. 

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