Hurting the Bottom Line

Lifestyle choices such as smoking and drug use by employees affect a company's morale and success.

ONE doesn't need an MBA to recognize that getting high productivity from company assets is a fundamental element to managing a successful business. Any asset that is not maintained and improved eventually will stop producing. Despite this, many businesses are failing to acknowledge the importance of asset management, especially when those assets are people. For decades, Corporate America has claimed that people are important assets, yet businesses have floundered in their attempts to recognize the importance of employee wellness.

A growing trend across America, programs focusing on worker health and safety have become influential on overall company productivity, equity, and stability. Businesses are beginning to address the importance of "human capital assets" by recognizing the workplace as an effective venue through which to influence workers, enhance behavioral trends, and support beneficial employee lifestyle choices. Implementing a workplace wellness program simply makes good business sense. Below are a few integral factors involved with furnishing and deploying an effective wellness program.

Measuring Productivity
In order to enhance productivity, a company must recognize the abuse of "sick leave" privileges. The purpose of sick leave is to allow companies to work with a fully responsive and able-bodied team of employees. In addition, sick leave is a moral and legal responsibility companies must provide in order to address the personal health of all employees. When employees abuse their right to sick leave, it affects overall productivity.

For example, in a company of 1,000 employees, if each employee were absent 10 days a year, the productive output for the workforce would reduced by 4 percent. By reducing sick days from 10 days to seven days per year, a company could retain 1 percent of that lost productivity. Monetarily, this could equate to millions of dollars.

According to the American Lung Association, smoking costs the United States approximately $97.2 billion each year in health care costs and lost productivity. Research shows that smokers have higher rates of absenteeism than nonsmokers and that smokers are more likely to use sick leave because of related illnesses.1 Smoking cessation courses offered as part of a workplace wellness program can provide immediate payback in terms of productivity improvement, reduced absenteeism, and reduced health care costs.

By recognizing the overall significance of smoking cessation programs for both the company and the individual, the employer is able to encourage overall company improvement. According to the Centers for Disease Control and Prevention, "Smokers who quit can gain significant health benefits" in addition to overall productivity enhancement.2

Currently, 65.2 percent of American adults are considered overweight, and 31.1 percent are obese.3 Americans with increased body mass index (BMI) have caused increased annual health care costs and work absence hours.4 Although obesity and weight issues may be genetic or health-related, encouraging behavioral change programs that focus on building life skills to increase physical activity and healthy eating habits may have a direct positive effect on overall company productivity. In addition, by encouraging a healthier lifestyle, companies are improving the personal lives of employees. This focus enhances overall company productivity and image.

What is BMI? Body mass index is calculated with a formula that uses a person's height and weight to assess whether he or she is "overweight" and, therefore, at increased risk for chronic disease--notably heart disease, hypertension, and diabetes. A person is considered to be overweight if his/her BMI is between 25 and 29.9; an obese person has a BMI greater than 30.

Workplace drug abuse (illicit drugs and non-medical use of prescription drugs) costs American companies more than $140 billion annually. Approximately 10 percent of workers between the ages of 18 and 49 abuse drugs, which costs firms that hire drug abusers an average of $10,000 per drug abuser per year. Drug abusers are typically associated with 50 percent-plus higher on-the-job accident rates, 10 times higher absenteeism, 30 percent-plus increased employee turnover, 300 percent greater medical benefit utilization, more frequent workplace violence incidents, and up to 40 percent of inventory shrinkage, as well as 70 percent of cash theft.

In order to enhance productivity and safety, corporations must address the national workplace drug issue by raising awareness and enhancing employee knowledge. An effective drug free workplace program includes random drug testing (using either oral fluids or some form of appropriate, observable specimen collection) and employee education and assistance programs. By directly addressing the national workplace drug abuse problem, companies are setting a new standard in drug-free work programs while also enhancing workplace safety and productivity.

Workplace wellness programs may enhance overall workplace productivity by focusing on the importance of the individual health and safety of employees. In addition, companies that have implemented wellness programs have seen positive overall results with monetary returns of between $3 and $8 for every dollar invested in the program, along with improved overall employee morale.

As stated in a report from the National Institute for Occupational Safety and Health, "Worksites offer the potential for support to long-term behavior changes, mobilization of peer support, use of environmental supports and the possibility of offering comprehensive multi-level interventions repeatedly over time as a means of building and sustaining interest in behavior changes."5 When businesses treat the employee's health as a critical resource, productivity can be noticeably improved with a clear benefit to the bottom line.

1. "Health Consequences of Smoking," Surgeon General Report 2004, Centers for Disease Control and Prevention, Chapter 6, p. 626x.
2. "The State of Aging and Health in America 2004," Centers for Disease Control and Prevention, p. 11.
3. CDC, National Center for Health Statistics,
4. "The relationship of body mass index, medical costs and job absenteeism," American Journal of Health Behavior, 2003--Jul-Aug; 27 (4): 456-62.
5. "Steps to a Healthier US Workforce: Integrating Occupational Health and Safety and Worksite Health Promotion, State of the Science," Sorensen, G, et al., NIOSH, October 2004, p. 3.

This article originally appeared in the July 2007 issue of Occupational Health & Safety.

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