Poor metrics put health programmes in peril

Perceived wisdom holds that a healthier workforce is a more productive workforce. But for every study that appears to show that fitter staff perform better, another finds that the benefits to a company of promoting wellbeing at work do not outweigh the costs, with the result being zero improvement in absenteeism and performance.

Rand, a US think-tank, is one such naysayer. It raised its head above the parapet on the subject in January, issuing an attack on the body of research backing the introduction of workplace health and fitness schemes.

Over a seven-year period, the think-tank assessed 67,000 workers participating in the healthy living programme of PepsiCo, the US-based drink and snack-food company, and concluded from the results that so-called “wellness” programmes designed to promote better health are not economically worth the effort.

PepsiCo’s lifestyle management programmes that specifically address lack of exercise, bad eating habits and smoking were shown to reduce sick leave taken by employees by an hour a year, but this only resulted in a saving of 50 cents in healthcare costs for every dollar spent.

“The savings generated by this benefit are not enough to make the programme pay off financially,” the think-tank reported.

PwC, the consultancy, reached a similar conclusion in a 2009 study looking at the exercise and dietary habits of public sector workers at four local authorities in the UK.

It found that although “other research has shown the beneficial effects of diet and exercise on health”, there was no discernible difference in exercise habits of those who took a high level of sick leave compared with those who did not.

These findings raise important questions about the benefits of investing in health and fitness initiatives, which have increasingly become the norm for large companies.

Roughly half of US employers with at least 50 workers offered a healthy working programme in 2012, according to Rand. This figure rises to more than 90 per cent when considering firms with more than 50,000 workers.

But those in the pro-fitness camp believe the reason why critics think there is little point to workplace health schemes is simple: they have totally miscalculated the cost of ill health to business.

The argument is that while the outlay on company health initiatives is easy to calculate, the losses caused by staff sickness do not consist of easily decipherable entries within a company’s balance sheet and, as such, are greatly underestimated.

Chris Bailey, a partner at Mercer, which advises companies on the health, wealth and performance of their staff, calls this “poor metrics”.

“Most organisations do not capture the true cost of ill health and capture only the increased direct spend on health initiatives. But the impact of ill health is not a neat single line on a company’s P&L. The positive benefits of increased productivity and lower employment costs linked to health must be captured if a true evaluation is to be made.”

Companies that have been willing to suspend belief and plunge into spending on healthcare without a “cast iron guarantee of return” have typically witnessed a return on investment of 3:1, according to Mr Bailey.

A recent report by the Confederation of British Industry, a UK business association, indicates that the returns on such an investment could be even higher. New health and wellbeing policies at Royal Mail Group, the postal company, generated a 500 per cent return on investment over three years, according to the CBI.

There is also a sense that the negative findings of some studies could be a reflection of poorly executed corporate fitness campaigns that primarily appeal to employees who are already fit and active, rather than those who need it most.

The assumption is that if companies addressed that imbalance, they might see a better return on investment.

Kimberly Jinnett, executive vice-president of the Integrated Benefits Institute in San Francisco, says: “Even the best fitness intervention may not affect absence, job performance, work disability or broader work outcomes, if the only ones targeted by the programme are the [healthy] employees who come to work every day.”

Mr Bailey of Mercer agrees that more accurately targeted fitness programmes are imperative. “Well-intentioned but poorly researched initiatives will have limited impact – simply placing a bowl of fruit in an office will not create a culture of healthy eating.”

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Living for now: What’s in it for PepsiCo in the UK and Ireland?

With more than 5,000 employees in the UK and Ireland, PepsiCo says it is “committed” to creating an environment that encourages a healthy lifestyle, despite criticism of its wellbeing scheme.

Its strategy, according to Kimberley Swift, PepsiCo UK health and wellness manager, is based on four pillars: diet and hydration; quitting smoking; exercise; and mental resilience. She says: “We have invested significant time and resources in health and wellbeing initiatives and have seen a really positive effect on our employees. “

Last year, PepsiCo partnered with iGlobalWellness, a supplier of corporate health programmes, to offer 1,000 employees a “stay active challenge” in which they were issued with accelerometers and received points based on increased activity levels.

Staff participated in teams of five and their points were added up and swapped for prizes.

“It has been a resounding success,” says Ms Swift. “Over 11 weeks, average activity rose 77 per cent, smashing our 50 per cent target.”

To doubts that the programme is not cost-effective, she responds: “Healthier, happier employees create a great working environment that encourages productivity.”