The Wellness Imperative
"The value proposition is simply that if they are properly built, they will work, period."
- By Jerry Laws
- Sep 01, 2015
Editor’s note: OH&S Editor Jerry Laws conducted this Q&A via email in August 2015 with Brian Galonek, CPIM, the president of All Star Incentive Marketing (www.incentiveusa.com).
Q: Incentive magazine's 2015 Safety and Wellness IQ survey1 found corporate wellness incentive programs increasing in popularity, rising from 39.5 percent in 2014 to 46.4 percent in 2015. Are you seeing the same trend?
A: Yes, we are seeing spending increase both on safety and wellness programs and on their incentive (rewards) components. Our own research has confirmed this, showing a five-year trend of increasing safety budgets.
Does it surprise you that fewer than half of surveyed companies are using wellness incentives?
No, I see neither the number nor the upward trend as surprising. The percent using wellness incentives is below 50 percent because of legacy corporate belief system around providing their employees with health care options.
The news coverage around the appropriateness of our legal system which forces corporations to provide such coverage is filled with stories of discontent from the business community and has been for decades. Many other countries have single payer systems or other systems that do not burden their business communities in this way. While many don't like the legal mandate to provide health coverage, all comply because it is the law, however, for many decades companies have operated with the belief that their responsibilities in this area end with providing the coverage. Only in the past 20 years or so have companies begun to embrace the idea that they should go a step further and promote wellness as both a way to improve the lives of their employees and their bottom line; and only in the last 10 years have any measurable amount of companies begun realizing that offering rewards for success within those programs is a great way to improve overall performance. So the number of companies providing wellness incentives started from a very low level in the not too distant past and has been increasing ever since.
Growth in the popularity of safety incentives was reported in the same survey, although it continues to lag the popularity of wellness incentives. The percentage of companies saying they do have a safety incentive program rose from 31.0 percent in 2014 to 37.6 percent in 2015. Why are wellness incentives used more than safety incentives?
For starters, not every company has a "safety sensitive" workforce. While there is an element of safety in all our everyday lives, the need for a safety program, with or without an incentive component, is far less in a financial institution than it is in a trucking company. But every company, no matter what industry they are in, has a need and will enjoy the benefits of improving their employees' health. The number is also affected by the fact that many companies that report they have a wellness incentive program actually have a shell of a program that may simply offer employees a stipend for taking a health assessment, which is not truly a program but a one-off component.
What explains the growth in both of these types of programs?
There are several reasons for sure, one of which is the improvement in the economy as a whole and in the corporate earnings climate, in particular in recent years. The discretionary portion of departmental budgets is growing, and this is where most of the new money comes from for these types of programs.
There are a number of other factors as well, one of which is worker age on both the high and low ends of the scale. There is a discernable push to keep the Baby Boomers healthy, not only because companies care about their older employees, but also because they are in many ways the most knowledgeable and productive workers a company has. On the Gen-Y and Millennial side of the scale, you have fewer health problems that need mitigating, but you have a group that craves recognition and feedback. They want to know that they work for a company that cares about them and that values them as people, and they are all too willing to jump to another employer if they don't believe that to be true. Wellness programs with a recognition/reward component are a great way to keep younger workers engaged. Finding a way to keep all these groups happy, healthy, and on the job is a critical business need in any industry.
What's the value proposition in 2015 for both wellness and safety incentives?
The value proposition is simply that if they are properly built, they will work, period. By work, I mean that they will deliver a measurable and positive return on investment both in terms of hard and soft dollars. The hard dollar return is easy to measure with basic reporting and analysis. How much do accidents, injuries, lost days, etc. cost us, and how many did we have before and after we put this program in place?
The soft dollar savings can be as big or far greater and can be measured by gauging levels of employee engagement, job satisfaction, and morale, which often translate into lower turnover and greater production—just two of the many factors that can greatly contribute positively to the bottom line.
What wellness activities do you find are most frequently encouraged by corporate programs?
From our experience, the easiest to measure, things like weight loss, exercise, health assessments, are the most common and have the greatest ongoing effect. Truly proactive companies will find ways to go beyond those data points and use other tools to further enhance their programs. Some, for instance, upon learning through health assessments that employees have certain afflictions, will offer important information to their employees to help mitigate those problems. To see if they are utilizing and internalizing these tools, companies can issue surveys or quizzes to test their employees' knowledge of the related causes and possible cures and reward them with incentives for their feedback.
HR professionals and CEOs may have noticed a study2 published earlier this year in the American Journal of Public Health. It showed that wellness programs can be effective at helping workers lose weight: The two-year study from the University of Rochester Medical Center reported that wellness programs succeeded in reducing the number of overweight or obese employees by almost 9 percent. Reducing the number of overweight or obese employees to that extent would significantly check an employer’s health costs, correct?
Absolutely, but health care cost reductions will lag behind performance, so employers will need to be patient to see the returns. The key is to make the program that produces the weight loss, and other beneficial health trends, sustainable, and this is where a properly built incentive program can be enormously beneficial. For starters, "properly built" refers to building a program that uses the proven successes from other incentive programs.
Unfortunately, cash or cash substitutes like prepaid cards, gas cards, and gift cards are the most frequently used awards in wellness programs and the most ineffective. The data here is beyond reproach in that cash is a bad long-term motivator and long-term motivation is what is most needed for these programs. I'll grant you, it is a counterintuitive concept that something will work better than cash, and it is largely a foreign concept to the HR departments from which most wellness programs are created, but cash is simply not memorable and therefore does little to sustain an ongoing program. I would recommend HR managers thinking about deploying a wellness incentive program talk to safety managers who long ago realized that a points program featuring tangible merchandise and travel awards will greatly outperform cash and contribute to a much more sustainable program.
How should a company launch a wellness and/or safety incentive program? How should it determine the program's budget, structure the program, monitor employees' progress, keep lines of communication open with the workers about the program, and manage the program going forward?
It will seem like a daunting task for sure for those companies starting from scratch and so the best thing to do is to work with an outside resource to help build and manage such a program. The expertise levels and knowledge base greatly outweigh any incremental costs of doing so and, most importantly, position the program to succeed.
The corporate landscape is littered with underperforming or failed programs that were created in house by people without expertise in these areas. HR departments turn to outside resources all the time to address their needs because they realize that they do not have the time or know-how to properly address those needs internally. Safety and wellness incentive solutions should be viewed in exactly the same light.
This article originally appeared in the September 2015 issue of Occupational Health & Safety.