Commentary: Let’s start with the obvious: Employees create value by applying their training, experience and talents towards the company’s goals. That’s why they are hired in the first place.
Also obvious: When an illness keeps an employee away from the job or prevents them from putting in their top performance, the company loses more than just the costs of getting them well again. They lose all the value the sick employee would have created had they been healthy.
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How much value companies lose because of illness is less obvious. It’s fairly easy to account for dollars spent on health care and sick pay. Tracking revenues back to different employees’ time and energies is difficult for all but a few businesses. How many companies can count widgets coming off an assembly line anymore?
This leaves most employers in the dark about what they get in return for what they spend on health benefits. As a result, they tend to make decisions about benefits on the basis of costs alone, with little regard to value. As health care costs continue to rise, many employers may be tempted to scale back their efforts to help employees get and stay healthy.
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Benefits and HR professionals can help shed some light on the value of a healthy workforce by demonstrating to corporate leaders that health is an essential component to high performing human capital, much like selection, training and professional development.
What are leaders trying to accomplish? Focus on what gives your company its competitive edge. Is it great customer service? Revolutionary product development? Seamless supply chain management? Keeping the big picture business goals in mind will help you develop your demonstration around the key metrics company leaders use to measure whether their strategy is on track.
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How do people help accomplish these goals? Different corporate strategies imply different mixes of skills and talents, applied in different ways. Some strategies depend on intensive training and high cognitive functioning. Others require the diligent performance of routine tasks in a specific place for a specific duration of time. By themselves, metrics that indicate who was working, where and when, how prepared they were, and how they performed are important management tools. They become especially compelling when statistical methods are applied to show their impact on leaders’ key business metrics.
How might illness get in the way? Knowing the skills and attributes that drive a business strategy also gives insights into what’s at stake when an employee gets sick. A programming project probably can absorb the occasional sick-day absence – but might be seriously compromised if a critical team-member has a chronic condition that makes concentration difficult. On the other hand, accommodating an employee who experiences temporary pain, discomfort or immobility after back surgery is easier for knowledge workers than for delivery drivers. Measures of health and illness will be most informative when they can capture how people are ill rather than simply how many, how often and how much their care costs. Linking the performance of workgroups and business units to the prevalence of different chronic conditions and to aggregate measures of physical, cognitive and emotional functioning can provide clues to how illness limits employees’ contributions, even when they are physically at work.
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To be fair, most companies won’t have even a remote chance of linking health, job performance and business outcomes for the entire organization – at least not right away. At best, some companies might be able to focus on a single business unit as a useful demonstration case.
The important point is that any demonstration should begin with a clear, logical and compelling case for the competitive advantage of a healthy workforce. Mapping out how good health enables workers to perform the tasks that drive leaders’ strategies – and yes, I mean literally drawing diagrams with boxes, labels and arrows – can help make that case. If nothing else, it will help benefits and HR professionals engage senior leaders about workforce health in ways that address how the business creates value. It also will provide a blueprint for collecting and analyzing data that matters, rather than simply reporting the usual cost, utilization and absence metrics. True, this might take some HR and benefits professionals out of their comfort zones. In the long run, however, the business case for workforce health investments will be stronger when the evidence base includes value as well as costs.
Brian Gifford, Ph.D. is director, research and measurement at the Integrated Benefits Institute in San Francisco. He can be reached at 415.222.7217 or
