Employee Health as a Strategic Imperative

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EMPLOYEE HEALTH AS

A STRATEGIC

IMPERATIVE

January 2009



“Awareness on what can be done

to improve employee health is

too low; this is one reason why

we need to work with the Forum,to reach out to leaders who

should be the driving force.”

Margaret Chan, Director-General, World Health

Organization (WHO), Geneva

Employee Health as a StrategicImperative

Executive Summary

• Investment in employee health brings strong returns including

financial gains from increased productivity, and non-tangible

benefits such as improved morale and loyalty

• In times of economic downturn, companies should continue

to invest in employee health, as this situation puts employees

under additional stress with negative consequences for health

and business alike

• To promote continued focus on employee health, it is critical

to spread the message using different communication means,

from peer-to-peer to making use of new technologies

Background

The workplace is a key setting for improving health; currently, one

third of the global workforce suffers from preventable diseases in

a given year, costing up to US$ 1,500 per employee. The burdenof such diseases will increase by 25% in 2025, and this does

not include the expected impact of current financial strains on

employees’ mental and physical health. Fortunately, this situation

is preventable. Healthy diets, exercise and avoidance of tobacco

use are determinants of economic growth and can be facilitated

through a variety of worksite actions. While programmes improve

employee health with return on investment as high as US$ 6 per

US$ 1 invested, participation in such schemes tends to be low,

and few programmes are comprehensive and global in nature.

The World Economic Forum, with the Working Towards Wellness

Initiative, continues to support companies to promote employee

health, expanding beyond infectious diseases, developing

knowledge, creating platforms for action, and raising awarenessand advocacy on the role of physical activity, good nutrition, the

avoidance of tobacco use and good mental health and well-being

as drivers for productivity and competitiveness. The private

session in Davos, “Employee Health as a Strategic Imperative”

convened business leaders, experts, NGOs and public figures to

discuss the importance of employee health and to explore investment

in workplace health, especially at times of economic downturn.

Session Report

Margaret Chan, Director-General, World Health Organization (WHO),

Geneva, opened the session by highlighting that, “especially during

this financial crisis, we cannot afford not to invest in employee

health. We have learned from ample evidence from the past

downturns. We will see more problems with sickness, alcoholism,

drug abuse and depression driven by stress from the crisis,

impacting not only on the workforce but their families.”

Participants reflected on the impact of the economic downturn

on employees and their responsibilities towards their workforce.

The economic situation inevitably brings insecurity and

1

Margaret Chan, Director-General, World Health Organization (WHO), Geneva

Richard H. Bagger, Senior Vice-President, Worldwide Public Affairs and Policy, Pfizer, USA; and

Harish Manwani, President, Asia, Africa, Central and Eastern Europe, Unilever, United Kingdom



nervousness regarding job retention and this in turn may take atoll on an organization’s ability to perform. During times of job

cuts, greater stress is placed on those employees who remain

behind. Families and communities are affected with a ripple

effect which goes far beyond the employees of the organization.

A common theme running through the session was the reflection

that people react better to news than to the uncertainty of no

news, and therefore communication becomes central to limit the

damage to employee health.

A Few Simple Cost-effective Strategies

In a time of resource

constraint, easy cost-

effective solutions are

available, such as “making

your environment smoke

free; introducing healthy diets

in workplace cafeterias;

introducing ergonomics and

exercise support,” said Chan.

The evidence for these

interventions is strong. “It is aparadox that some of the

least expensive treatments canbe the most effective,” remarked

Thomas R. Insel, Director,

National Institute of Mental

Health, USA. Case studies

highlighted a variety of cost-

effective outcomes. For

example, General Mills’

screening programme to identify

health risks and help workers

achieve positive lifestyle changes

resulted in the company’s

healthcare cost increases climbing less than 3% annually in the

past five years. Powell, Chairman and Chief Executive Officer,

General Mills, USA, pointed out that “these increases are below

the rate of inflation and are significantly less than the rate posted

by American industry overall.” Participants were careful to note

that simplicity should not overshadow the importance of tailoring

programmes to different cultural needs.

Evidence on the Return on Investment Is Critical,

Especially in Times of CrisisBusiness leaders are increasingly aware of the importance of

employee health for increased productivity, competitiveness and

loyalty of the workforce. The economic downturn should

increase, not undermine, this focus on health. Richard H.

Bagger, Senior Vice-President, Worldwide Public Affairs and

Policy, Pfizer, USA, commented, “When employers focus on

prevention and wellness as a business driver, they see that a

healthier workforce not only results in lower medical costs, but

also significantly improves productivity. For every dollar saved in

lower medical costs for healthier employees, an additional US$

2 to US$ 3 is saved in reduced absenteeism and less

‘presenteeism’ – employees with lower productivity on the job.

More and more employers around the world understand and are

acting upon the fact that a healthier employee is a more

2

Report of the Governors Meeting of the Consumer Industries

Daniel J. Bryant, Senior Vice-President, Global

Public Policy and Government Affairs,

PepsiCo, USA

Margaret Chan, World Health Organization (WHO), sharing her opening remarks with the group George C. Halvorson, Chairman and Chief

Executive Officer, Kaiser Foundation Health

Plan, USA

Group discussion captured pictorially by the Davos WorkSpace artist

“There is a clear

connection between

good health,

prosperity and

economic progress.”

Mark Foster, Group Chief

Executive, Management Consulting

and Integrated Markets, Accenture,United Kingdom

“We as employers

get a good return on

investment from

health; for every US$

1, we can get up to

US$ 6 back.”

Margaret Chan, Director-General,

World Health Organization (WHO),

Geneva



Communication Is Key: Media and Technology

for Health

Session moderator Jeff Jarvis, Blogger and Professor,

Buzzmachine.com, USA, introduced a variety of means of using

media and technology to advocate for investment in health and

to unite arguments of stakeholders – employers, employees,

government, families and communities – to promote the cause.To test different communication means, participants applied the

arguments discussed to recording video messages on “why to

invest in employee health”. These videos may be accessed at:

http://www.weforum.org/en/initiatives/Wellness/index.htm.

The closing discussion highlighted communication as critical in

times of crisis. Engaging with employees and creating a culture of

openness and trust will help alleviate the stress and negative health

consequences of an economic downturn. As one participant

commented, “all of us, with our different roles, can support

health, making use of communication options. In my organization,

I need to review my plan to make sure it meets the criteria

discussed so I can make our existing programme more robust.”

“Businesses should look at the health

status of their employees as an asset for

the organization, and take steps to improve

health as part of their executive goal

setting, incentive setting and performance

monitoring process.”

George C. Halvorson, Chairman and Chief Executive Officer, Kaiser

Permanente, USA

productive employee.” Continuously providing solid data on its

returns will guarantee that employers do not abandon or

minimize their commitment to employee health.

We All Have a Role to Play: Multistakeholder Action

at the Core of Employee Health

Employee health is a multistakeholder issue which impacts and

involves businesses, governments, shareholders, unions,

communities and civil society. This private session enabled

champions of workplace wellness to reflect on the impact of the

economic downturn on different stakeholder groups and make

the case for a continued emphasis on health as a strategic

imperative to each stakeholder group. For example, Mark Foster,

Group Chief Executive, Management Consulting and Integrated

Markets, Accenture, United Kingdom, described the perspective

of shareholders as being on two levels. “The short-term

perspective is around this quarter’s productivity; a healthy

workforce is more productive. The long-term perspective isaround the competitiveness,

brand and reputation of the

business; a workforce with key

skills and capabilities will fulfil the

long-term mission.” Leaders

must be able to communicate

the need for employee health in

ways which win over the

shareholder from a short- and

long-term perspective.

3

“Strong arguments

why health is good

for the employee

and for the company

are essential.”

Richard W. Edelman, President

and Chief Executive Officer,

Edelman, USA

Group discussion captured pictorially by the Davos WorkSpace artist



“Peer groups are one of the most

important, influential and effective

means of changing employee behaviour,

as employees are motivated byindividuals that they can relate to.

Therefore, focusing on an organization's

peer support system is critical to driving

healthy behaviour.”

Mara Swan, Executive Vice-President, Global Strategy and Talent,

Manpower, USA

Highlighted Needs and Next Steps

In times of economic downturn, it is more important than ever to

keep the emphasis on employee health. It is critical to maintain

dialogue and advocacy for workplace health, and provide toolsand information to support its application. The World Economic

Forum and all stakeholders have an important role to play.

Recommended actions that could support further steps in this

area include:

• Raising awareness of the problem, highlighting the business

case in times of economic downturn

• Capturing data that can inform companies on the impact of

the economic situation on health

• Making effective low-cost solutions for employee health available

• Exploring opportunities for new technology to communicate

why employee health is an investment and to deliver health

messages

Contributors

Margaret Chan, Richard W. Edelman, George C. Halvorson,

Harish Manwani, Richard H. Bagger, David E. Bloom, Awa Marie

Coll-Seck, Victor J. Dzau, Thomas R. Insel, Peter Piot, Pekka

Puska, Robert Scoble, Mara Swan, Mark Foster, Jeff Jarvis,

Martin Richenhagen, Scott Ratzan, Christopher Murray.

4

Report of the Governors Meeting of the Consumer Industries

“Communities are critical for employee

health, as the boundaries between

workplace, public places and home areblurring.”

Scott Ratzan, Vice-President, Global Health, Government Affairs and

Policy, Johnson & Johnson, USA

Peter Piot, Senior Fellow, Bill & Melinda Gates Foundation, USA, and Chair, Global Agenda Council on HIV/AIDS; Scott Ratzan, Vice-President, Global Health, Government Affairs and Policy, Johnson

& Johnson, USA; Tom Achoki, Project Manager, Global Health Initiative, World Economic Forum; Kendall J. Powell, Chairman and Chief Executive Officer, General Mills, USA; Ramazan Salman, Founder,

Ethno-Medizinisches Zentrum, Germany; and John G. Evans, General Secretary, Trade Union Advisory Committee to the OECD, France



The World Economic Forum is an independentinternational organization committed to improvingthe state of the world by engaging leaders inpartnerships to shape global, regional andindustry agendas.

Incorporated as a foundation in 1971, and basedin Geneva, Switzerland, the World EconomicForum is impartial and not-for-profit; it is tied tono political, partisan or national interests.(www.weforum.org)

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Employee Health as a Strategic Imperative