Wellness: Why spending on your employees’ well being is good business

Absenteeism and turnover cost a lot more than you might think

Absenteeism and turnover are costly, as well as disruptive to your enterprise. A Statistics Canada labour force survey found that the average worker missed 10 days of work 2009, nearly double what it was just a decade earlier, costing employers about $2,500 per absent employee. Replacing employees lost through turnover costs even more, the equivalent of 18 months’ salary to replace a manager or professional or six months’ wages to replace an hourly worker. A survey last year by the Conference Board of Canada found that most employers don’t track absenteeism, so they aren’t likely to know how much it’s actually costing them.

The top reasons for missing work, the labour force survey found, boil down to:

• illness or disability,
• caring for family members,
• and personal or family responsibilities.

Much of that absenteeism is tied to workplace stress. Other studies show that sick or stressed-out employees who remain at work performing less than their best cost employers far more in lost productivity than absenteeism.

In short, employee wellness – or lack of it – costs Canadian businesses hugely, an estimated $15 to $25 billion per year.

Among the steps that organizations can take to get a handle on the problem, the Conference Board recommends:

• Identifying causes of absenteeism;
• Taking steps to improve the health and well-being of employees; and
• Having a return-to-work program in place.

Creating a workplace that supports employee wellness makes a dramatic difference. Among the benefits:
attract and retain the best employees.

• improve productivity.
• reduce employee turnover.
• increase morale.
• reduce absenteeism, injuries and illness.
• reduce health, insurance and benefits costs.

Workplace wellness programs can reduce absenteeism and turnover by as much as half, cut time-loss injury rates by two-thirds, and save $5,000 to $10,000 per employee in benefit payouts per year. Discussing options with employees is important, as leading experts on work such as University of Alberta professor emeritus Graham Lowe and York University professor Dalton Kehoe point out.

Tourism Saskatchewan leads by example

Tourism Saskatchewan introduced an employee wellness program three years ago, following discussions between management and union representatives.

“We all agreed that this was a good thing,” says Joan MacPhail, Tourism Saskatchewan Manager of Human Resources. “It was beneficial to our employees and also beneficial to the organization.”

“A wellness program recognizes that we value each employee as a whole person, rather than as just the individual that we get for eight or nine hours a day. It’s something that is reflective of trying to get a work-life balance.”

“I look at it very much as an investment in the people,” MacPhail adds. “We invest in our employees, whether it’s through training, whether it’s through workshops, be they in the office or outside the office. This as an investment as well.”

The size of the benefit can vary. Tourism Saskatchewan decided that reimbursing up to $300 per year for wellness related spending makes sense. For a smaller employer, $100 per year could be very meaningful to employees. Instead of giving money, a business might participate in corporate volunteerism, let employees leave early in summer or organize a company-sponsored trip. Plans can grow over time, expanding the range of activities and reimbursements covered.

“You need a starting point,” MacPhail says. “At the end of the day, the dollar value that the employer puts in will matter, but what matters most is that an employee can look at their employer and say, ‘they recognize that I have a life outside of work, that it can cause me stress and they’d like to help me with that’.”

A wellness plan is considered a taxable benefit. It will show up on T-4 slips, so employees need to know that in advance, MacPhail says.

“Not everything will appeal to a group of employees, whether they be six people or 600 people,” she says. “A range of services and options from which employees can choose is very valuable.”

Figuring out what to include in your wellness plan is as easy as sitting down and searching the Internet, MacPhail says. “Compared to other programs, a wellness plan is relatively easy to implement. Having that input by the employee group really makes it better customized to your organization.”