Should Employee Health be a Performance Metric?

Should Employee Health be a Performance Metric?

High-performing organizations “get” the correlation between employee health and performance. In fact, 75 percent of such employers surveyed by the SHRM Foundation reported that they regularly gauged health status as a part of their overarching risk strategy. But should employee health be a performance metric? Keep reading.

The Issue

A great way to gain a competitive edge is to enhance the health and wellbeing of your people. Healthy employees tend to show up to work, perform better, and produce more. In fact, the nation could save more than $300 billion each year if organizations established ways to promote health and prevent chronic conditions. The U.S. could also save if employers assess the progress of employees as they do their financial performance.

The Changing Workforce

To strategically measure the value of human capital as it relates to employee health and performance, HR leaders must grasp that the workforce has changed. The most significant changes over the last five years include:

  • The aging of the working population
  • The higher numbers of employees with chronic conditions and/or multiple risk factors
  • More female, Hispanic and Latino employees
  • The increasing number of individuals who must work multiple jobs to make ends meet

The Rise of Medical Benefits Costs

Because more people are living and working longer, more healthcare services are utilized. This naturally increases the cost of employer-sponsored medical benefits. Look at these data:

  • Medical costs increase by roughly 25 percent from age 40 to 50
  • Such costs increase approximately 35 percent from age 50 to 60.
  • Risk factors such as obesity, smoking, diabetes, and physical inactivity trump age when it comes to health care costs.
  • High-risk employees between the ages of 40 to 60 incur up to three times higher medical costs than low-risk employees in the same demographic.
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Employee Health as a Performance Metric

Studies suggest that facile metrics including absenteeism or illness alone don’t provide enough meaningful insight upon which employers can act. Further, many evaluations are inaccurate due to subpar methodology. Population health management may be in order.

What’s needed is a comprehensive wellbeing workplace assessment that can be accomplished through what’s called a parallel analysis that ties workplace health data to organizational performance.

Such scientific and systematic analysis pairs various kinds of data to gain a better and more holistic understanding of results.

The assessment of human analytics can explore a myriad of metrics associated with human capital including presenteeism, absenteeism, job satisfaction, performance, engagement, and loyalty through an employee survey. Such a survey is coupled with a health and wellbeing assessment and can be coupled with objective data gleaned from health monitors.

Ultimately, it is key to pinpoint and put in place wellbeing features that line up with organizational goals and performance. To produce additional favorable outcomes, employer health programs must develop multi-dimensional plans that can markedly influence and contribute to organizational outcomes.

Should employee health be a performance metric? Well, data show that the promotion of health and wellness and the prevention of chronic disorders could save the nation – and your organization – a lot of money.

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To gain optimal outcomes, you should make population health management part of your benefits strategy. For the best outcomes, such solutions should focus on physical wellbeing as well as other areas including financial and emotional wellbeing, and purpose and community.

Mercer offers population health management solutions and tools that empowers employees to act to overcome “silent” and costly struggles such as mental illness and substance abuse. The ultimate result will be more engaged and productive employees – and a healthier bottom line.

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