This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

April 11, 2007

The Future of Wellness

For a while now, employers have recognized the value of supporting workers to stay healthy. In the United States, we call them "wellness programs". Not only do these valuable programs reduce absenteeism, but they also increase productivity and reduce employee turnover---both directly and indirectly.

The financial impact of healthcare spending is indisputable. Starbucks spends more money in one year on health insurance for its employees than it spends on coffee for its customers. The US automakers will spend more money this year on health insurance than they will on the steel that goes into their automobiles.

When you consider the costs of having workers who smoke, have chronic diseases, or are overweight, it is only logical that employers would look for ways to reduce those healthcare costs. Organizations can save $1100 for every employee who quits smoking and even more for every obese employee who gets rid of weight. We see more workplaces going smoke-free and encouraging their overweight employees to start exercising and eating better.

Also, employees who are in the middle of a weight-loss or smoking-cessation program are much less likely to leave. Reducing employee turnover also decreases benefit costs, mostly because there is lower utilization of the healthcare system. When you bring on new people, they have often avoided visiting doctors, because they had no coverage. Once on your system, it's time to visit the doctors. This increased system usage produces higher insurance premiums.

So what's ahead for wellness? Expect organizations to place more responsibility on the individual, rewarding employees for exercising, quitting smoking, and losing weight. On the other side, there will be penalties for folks who do not "get with the program". Expect overweight and smoking employees to pay more for their health insurance. Second, expect to see more wellness coaches providing one-on-one assistance to employee-in-need and helping to significantly reduce healthcare costs. Finally, we expect technology to play an increased role in encouraging people to get and stay healthy.

Special thanks to Stacey Parker of WellCall, one of the largest consulting and coaching firms in this field, for many of these insights.

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