If you\u2019re an employer, you read articles\u00a0like this and think: \u201cGreat! Healthier employees plus measurable savings? Who wouldn\u2019t want that?\u201d<\/p>\n
But on the other hand, contrarian reports\u00a0like this one from the\u00a0RAND Corporation<\/a>\u00a0tell a different story. \u00a0According to RAND, only disease management programs have positive returns in savings; for lifestyle management programs \u2013 the ones that promote exercise and healthy lifestyles \u2013\u00a0employers can expect a return of only fifty cents on the dollar.<\/b><\/p>\n Following RAND\u2019s logic, it would make sense for the fiscally-minded executive or HR director to only provide benefits that treat chronic illnesses and not spend money encouraging their employees against unhealthy choices that lead to conditions like obesity, for instance.<\/p>\n But taking this line of thought can come at a high price for companies. Unhealthy employees and employees who are steadily becoming unhealthier tend to become less productive. \u00a0Employees who can\u2019t work at their full potential are a source of loss.<\/p>\n Yet you won\u2019t see these employees taking sick days; you\u2019ll see them at their desks day in day out,\u00a0present \u2013 but not productive. \u00a0Called \u201cpresenteeism<\/strong>,\u201d unhealthy employees who come to work are costing their companies billions in lost productivity. If you\u2019re an employer looking for positive ROI on your wellness program, this is something you cannot afford to ignore.<\/p>\n In order to understand how corporate wellness programs deliver significant benefits over the long term, it\u2019s important to understand where costs for employers come from. The first two you probably know.<\/p>\n There are\u00a0direct costs<\/b>\u00a0for sick employees, like medical and pharmaceutical costs. \u00a0Then there are sick days that employers are legally obliged to give, which represent money spent on employees who aren\u2019t working. \u00a0That\u2019s referred to as \u201cabsenteeism<\/b>.\u201d<\/p>\n These costs have been traditionally understood as costs corporate wellness programs can mitigate: healthier employees don\u2019t take sick days, don\u2019t lose productive hours, and don\u2019t make as many insurance claims for illnesses.<\/p>\n Presenteeism, by contrast, occurs when employees should be absent but feel that they should be at work because of their obligations or for fear of disciplinary action. \u00a0But what is presenteeism?<\/b><\/p>\n According to research published in the\u00a0Journal of Occupational and Environmental Medicine<\/a>, presenteeism occurs when:<\/p>\n Or when hours are lost when an employee:<\/p>\n All of these actions may cause the employee to be less productive, meaning the company is losing productive hours from individuals who are at work when they should be absent.<\/p>\n Lots of seemingly minor issues can cause an employee to be a \u201cpresentee\u201d worker. \u00a0Simply coming into work sick when they should be absent will cause an employee to be less productive. \u00a0But then, there are other, more silent factors that can cause loss of productivity including headaches, back pain, indigestion, acid reflux, etc.<\/p>\n Many of these minor complaints can be traced back to one chronic problem that is only growing with each passing year:\u00a0the ongoing rise of obesity in the United States<\/strong>. \u00a0While it might seem hard to imagine that your employees\u2019 diets and exercise habits are having a direct effect on their productivity, a growing body of research suggests otherwise. \u00a0Let\u2019s take a look.<\/p>\n According to the\u00a0Centers for Disease Control and Prevention<\/a>\u00a0(CDC), more than\u00a0one-third of American adults are obese<\/b>, which\u00a0research in the Journal of the American Medical Association<\/a>\u00a0defines as having a Body Mass Index (BMI)\u00a0equal to or greater than 30<\/b>. \u00a0For reference, here are the BMI ranges and their corresponding weight classifications according to the World Health Organization (WHO).<\/p>\n Statistically speaking, if you employ American adults in your business, some of them are likely to fall into this category.<\/p>\n Furthermore, the CDC estimates that the annual medical costs attributed to obesity are\u00a0$147 billion<\/strong>, and that costs for people who are obese are\u00a0$1,429 greater per individual<\/strong>\u00a0than those who are not.<\/p>\n From an employer\u2019s standpoint, employee obesity might not rank very high on the list of business concerns. \u00a0The trend towards a sedentary lifestyle is something that an individual chooses for themselves, and an employer is not a parent.<\/p>\n But as an employer, you expect productivity from your employees, and in recent years a growing body of research has started to indicate that overweight and obese employees\u00a0are costing their employers billions<\/a>\u00a0in lost hours due to both absenteeism and presenteeism.<\/p>\n A 2009 study examining the\u00a0costs of obesity in the workplace<\/a>\u00a0begins by noting that increased medical expenditures ranged from an additional $170 for overweight employees (BMI: 25.0 \u2013 29.9) to greater than $1,500 for employees with grade II obesity (BMI: 35.0 to 39.9). \u00a0Some of these costs were attributable to absenteeism, and the employee group with the greatest rates of absenteeism \u2013 women with grade III obesity \u2013 missed\u00a01 week more work than those of normal weight<\/b>.<\/p>\n 1 week of lost productive hours, assuming an employee works 40 hours a week, can range in the\u00a0high hundreds to thousands of dollars per employee<\/b>\u00a0(depending on salary), with the loss compounding for each additional overweight employee.<\/p>\n That\u2019s just absenteeism. When the costs of presenteeism are added in, the amount of productive hours and money lost due to obesity becomes hard\u00a0to ignore.<\/p>\n Research conducted by Finkelstein et al<\/a>. estimates that the total costs among full-time employees that are attributable to obesity total\u00a0some $73.1 billion<\/b>. \u00a0When broken down by type of cost \u2013 medical, absenteeism, and presenteeism \u2013 the results are as follows:<\/p>\n For women, costs related to presenteeism are estimated to be $15 billion \u2013 38% of the total costs related to poor health. \u00a0For men the costs related to presenteeism are $15 billion as well, but for this group,\u00a0presenteeism is the greatest source of financial loss<\/b>, more than direct medical costs and losses due to sick leave. \u00a0The authors concluded that:<\/p>\n \u201c\u2026presenteeism is the single largest driver of the costs of poor health among full-time employees, regardless of BMI. Moreover, with the exception of overweight men [BMI: 25-29.9], medical expenditures, absenteeism, and presenteeism increase with increasing BMI.\u201d<\/p><\/blockquote>\n These findings are confirmed in a second study published in the\u00a0American College of Occupational and Environmental Medicine<\/a>. This study looked at employees in the manufacturing industry in Kentucky and found that annual loss per worker due to obesity was\u00a0$506 in presenteeism and $433 in absenteeism<\/b>.<\/p>\n More interestingly, the paper\u2019s authors noted something they uncovered that they termed a \u201cthreshold effect<\/b>.\u201d<\/p>\n Among overweight (25-29.9) and mildly obese employees (BMI 30-34.9), the authors did not observe any significant costs related to productivity loss. \u00a0However, these costs began and steadily increased once BMI ranges extended into moderately or extremely obese ranges (BMI: 35+). \u00a0And they scale rapidly with the size of the company.<\/p>\n In the study, of the employees in the companies under review, 12.9% were categorized as obese. \u00a0Although obesity rates vary from company to company, using this figure as a model,\u00a0a company of 100 employees can expect a loss of $6,376<\/b>\u00a0due to productivity losses related to presenteeism caused by complications related to obesity. \u00a0And remember, this money is excluding the direct costs and absentee costs.<\/p>\n The authors of this study conclude:<\/p>\n \u201c\u2026health effects on productivity are concentrated among the most obese workers with BMIs of 35.0 or \u00a0greater, suggesting that employers should consider workplace interventions targeting obesity. \u00a0Even modest weight loss could result in hundreds of dollars of improved productivity costs per worker per year.\u201d<\/p><\/blockquote>\n Given the massive financial impact presenteeism can have on bottom lines and the link between obesity and presenteeism, corporate wellness programs can and must be seen in a new light when thinking about ROI.<\/p>\n Although the conclusions drawn by the RAND study about the ROI of corporate wellness programs aren\u2019t necessarily incorrect, they are a bit narrow-minded in that they only take into account measurable, direct returns on dollars invested\u00a0without considering the costs in productivity loss related to both absenteeism and presenteeism<\/b>.<\/p>\n One significant oversight in\u00a0the RAND study is the classification of the factors that lead to developing obesity, such as poor eating habits and lack of exercise as being under the umbrella of \u201clifestyle management programs,\u201d \u2013 the programs that yielded only 50 cents per dollar invested. These were the programs RAND advised against investing in.<\/p>\n But as research has shown, the link between obesity and presenteeism represents a huge potential drain in resources. \u00a0A well-run corporate wellness program can yield a huge ROI if it can increase productivity in its employees, and according to the CDC, maintaining a healthy workforce lowers both direct and indirect costs,\u00a0including the ones related to absenteeism and presenteeism<\/a>.<\/p>\nIt\u2019s Not Just About Sick Days<\/strong><\/h2>\n
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Lost Productivity<\/strong><\/h2>\n
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<\/p>\nThe\u00a0\u201cThreshold Effect\u201d<\/strong><\/h2>\n
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<\/p>\nShifting Perspectives on Corporate Wellness<\/strong><\/h2>\n