The concept of wellbeing as a risk management tool

When a particular human resources practice that has proven its worth in the US makes its way to these shores, one common response if the practice proves itself to be valuable is for organisations to say: “We were kind of doing that anyway”. The concept of ‘wellbeing’ still sounds odd to many in the UK ­ but its potential to help reduce absenteeism, boost staff morale and enhance employers’ standing with employees is more than a soft issue. Anything that purports to do all that, and rather more cheaply than most other mainstream, well-recognised employee benefits such as company cars, pensions and various insurance-related perks, should interest the corporate world.

Many still believe the term is little more than a faddish invention of the benefits industry, but a number of major companies have sophisticated wellbeing offerings. The main driver for the creation of the wellbeing movement in the benefits industry is the enormous expense associated with the provision of healthcare in the US. This forced major employers to start investing in the health and wellbeing of their employees before they got sick, in order to bring down the costs of healthcare provision for staff after the fact.

“There is no doubt that wellbeing came across the water from the US and it had a very good reason there for coming into existence,” says Wayne Pontin, business development director at healthcare and wellbeing consultancy the Jelf Group, who adds that the concept has gathered steam in the past five years. “Clearly, if you can improve the overall health of your employees, you reduce your medical expense spend,” says Pontin.

This is assuming the employer provides medical health insurance as a benefit; in the US, healthcare insurance tends to be a highly valued and widely used benefit. The testing of various wellbeing schemes by US companies has benefited the UK corporate world to the effect that the stronger, more useful and more efficient ones are now common among companies in the UK, including everything from gym membership, regular health screening, stress monitoring and counselling to nutritional advice and cafeteria menus that reflect good nutritional practices, diet advice and even personal trainer expenses.

Perhaps counter-intuitively, Pontin says the recession has bolstered corporate wellbeing provision as those employees who were not culled ­ the valuable ones ­ are being treated more carefully now. “A number of companies have had to downsize and are under even more pressure than before to improve the health and wellbeing of their remaining staff.

Since they need all hands to the pump, it is critical for them to cut down on sickness and absenteeism,” says Pontin. Everything about wellbeing programmes works to boost staff morale and get people feeling better about themselves and their overall health ­ that, at least, is the theory and surveys of staff with wellbeing programmes in place tend to bear this out, says Pontin.

Another key point in favour of wellbeing programmes in a recession is that they are considerably cheaper to introduce than other sorts of benefits. “If you take a death-in-service insurance package, that works out at about 0.7% of payroll, while a full-blown private medical insurance will cost about 1% of payroll. However, to introduce a wellbeing package costs less than 0.4% on average,” says Pontin. Rolling up all three means that for just over 2% of payroll, the employer gets a well-rounded package of health and wellbeing measures to provide across the board to employees.

“What we find is that gym membership is particularly valued and employers using bulk-buying can get monthly gym membership discounted to about £25 per month for each employee, which is much less than you would pay for monthly membership in most big city gyms,” he says.