Healthy employees: A competitive advantage

April 30, 2002
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If you are a manager, what is your responsibility for employee health? Do health issues have an economic impact on your organization? The obvious answer is "yes." Health issues must go beyond the notion of "it's the right thing to do." Human resources, training, employee retention, work culture and building and maintaining an empowered, motivated workforce are on everyone's mind. Should an organization have key measurable health objectives and strategies? Ask any athletic coach and the answer is "yes." As a businessperson, why wouldn't your answer also be a BIG "yes?"

Gaining an edge

A Total Health Strategy comprehensively audits and measures total organizational health by auditing the existing health of employees and establishing health programs and annual physicals for all employees within the organization. A THS ensures that all employees are active participants in wellness programs, resulting in healthier workers. An organization with a THS and its healthy workers outperforms an organization without a THS. A THS creates competitive advantage (1).

The Washington Business Group on Health and numerous other sources report that employee fitness programs achieve long-term savings of $3 to $6 for every dollar spent. Other experts believe the savings are greater (2). William M. Mercher, Inc., a benefit-consulting firm, found that one group saved $5.50 for each dollar invested (3).

Research in the health field documents positive results. Employees are healthier, more productive, and report higher morale, while employers are documenting savings of three percent to eight percent of their total health and medical expenses.

Typically, 30 percent to 32 percent of claims are linked to preventable health conditions. Studies conducted by the Association for Worksite Health Promotion and Wellness Councils of America reveal that corporate wellness programs increase productivity, morale and loyalty and reduce healthcare costs, use of medical benefits, workers' compensation and disability management costs, injuries and absenteeism (4). San Bernardino County, Calif., reported a 20 percent decrease in lost-time expenses from sick leaves after instituting a wellness program (5).

Carpenter Technology Corporation has used on-site clinics for five years to serve 2,200 of its 5,900 employees and dependents. The company estimates it saved more than $108,000 in 1997 (6).

Devising a plan

Organizations should encourage and assist each of their employees to develop a life/career health plan (7), which includes health, exercise and nutrition objectives/action plans, and offer employees programs and information that provide them the incentives and help to achieve their objectives/action plans.

Allen C. Elliott asked, "What good is it to become wealthy, successful or famous when you cannot enjoy life, because of depression or if you die early because of poor health? Good health must be a high priority in your life." (8) Employees who participate in these plans will realize an improvement in their health, resulting in a higher quality of life. Christopher P. Neck and Kenneth Cooper emphasize that exercise and diet are important for employee performance. They state, "Individuals who are fit are less likely to become obese, possess higher levels of energy and enjoy enhanced well being." (9)

Unfortunately, today's workers in the U.S. are less physically active than their counterparts of 20 years ago. The Federal Centers for Disease Control and Prevention report "that physical inactivity plagues all areas of the United States." (10) On the other hand, it has been shown that 85 percent of the recipients of a health-risk appraisal program make significant lifestyle changes: 67 percent begin eating healthier, 48 percent start or increase their exercise, 33 percent begin losing weight, 19 percent reduce or quit alcohol consumption, and 12 percent reduce or quit using tobacco products (11).

Get it going

What can company executives do to initiate good health habits in their employees? They can begin by setting good examples through their own participation in regular exercise and fitness programs as well as offer wellness/ lifestyle retreats for key executives and fitness facilities for their employees.

It's also important that any organization's strategic plan - covering primary customers, scope, etc. - should have a statement about employee well-being. Objectives for the organization usually include revenue, profit, market share, productivity and safety. We are proposing objectives that include all measurable aspects of health. They can be set for turnover, program participation, sick days off, average blood pressure scores and more.

Objectives must be measurable to create accountability. They provide targets so that performance can be monitored. Once objectives are set the various strategies can be developed to meet the objectives. Strategies include special meals in the cafeteria, paid bonus for weight loss, exercise programs and doctor physical exams.


(1) Porter, Michael E. "Competitive Advantage: Creating and Sustaining Superior Performance." (New York: Free Press, 1985) and "How Competitive Forces Shape Strategy." Harvard Business Review. March/April 1979.

(2) "The Global Aging Crisis." Denver Post. Feb. 7, 1999. P 1.

(3) Sullivan, Bernard J. "New Wellness Programs Can Produce Big Savings." Baltimore Business Journal. 15 N 22, p. 26, 1998.

(4) Geonie, Paula. "Wellness Programs Can Help Your Company Run the Race." L.I. Business News. April 20, 1998, N 16, p. 31.

(5) Szalai, George. "Plan Brings County Savings: Programs for Wellness, Productivity Expanded in California." Business Insurance. July 13, 1998. 13.

(6) Shinkman, Ron. "Healthy Workplaces: Employees Look to On-site Clinics to Control Costs." Modern HealthCare. April 20, 1998, v. 28, N 16, p. 64.

(7) Migliore, R. Henry. Personal Planning. (Jenks: Managed for Success, 1994).

(8) Elliott, Allen C. A Daily Dose of the American Dream. p. 121, 1997.

(9) Neck, Christopher and Kenneth H. Cooper. "The Fit Executive: Exercise and Diet Guidelines For Enhancing Performance." Academy of Management Executive, 2001, Vol 14 No 2 p. 73

(10) Morbidity and Morality Weekly Report, Dec. 23, 1998. htip://

(11) Cox, Larry Lipman. "Report shows Americans are fatter than ever." San Antonio ExpressNews, 2000. Also refer to "The Checkup, Part II." Fortune. Oct. 26, 1998. p. 329.

SIDEBAR 1: An employee's personal health action plan

Objectives: 1) Complete an annual physical 2) Lose 30 pounds this year 3) Cut cholesterol from 280 to 200 4) Exercise daily in year 2002 for at least 30 minutes 5) Eat 1,500 to 2,000 calories per day

Strategy: 1) Join a health club 2) Eat using diet plan 3) Walk/exercise early each day 4) Count calories as each day progresses 5) Keep a log of what you eat daily

SIDEBAR 2: Corporate health strategy

1) Establish special diet servings in cafeteria 2) Reward employees for participation in wellness program 3) Pay 50% of cost of annual physical 4) Have monthly speaker

Corporate health objectives 1) Cut absentee rate by 10% 2) Cut sick leave days by 20% 3) Cut costs associated with insurance by 20% 4) Hold employee "Health Care Day" once per year

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