In 2020, companies with the highest workforce treatment scores in Just Capital’s rankings outperformed the Russell 1000 by 4.7 percent. This might be news to some. Although attention to occupational health and safety and wellness programs has been growing, health and wellbeing was not considered a “hot” sustainability topic until Covid-19 hit. Surprising, considering that for over a decade, we’ve known that a healthier workforce is a more productive workforce. In fact, studies have shown that for every dollar saved in direct health care costs, employers receive an extra $2.30 in improved performance or productivity.[i] The pandemic has underscored the inextricable link between health and performance and forced the world at large—including companies—to reexamine how we define and approach health and wellbeing.
Defining health
In 1946, the Constitution of the World Health Organization (WHO) defined health as a state of complete physicial, mental and social wellbeing and not merely the absence of disease or infirmity. This apt, yet broad description of health, makes it challenging to create a single indicator or metric that helps companies understand and be evaluated on their progress on workforce health and wellbeing. There are an abundance of factors, circumstances, and dimensions that must be considered in building a culture of health within business. These can be broadly categorized into five areas:
- Physical: Ability to live and work in a way that enables one to reduce physical fatigue, stress, and illness, ensure safety, and manage nutrition, diet, and exercise.
- Mental: Ability to be resilient in the face of hardship and setbacks.
- Social: Ability to live and work in a safe and just environment driven by non-discrimination in hiring and on the job, social cohesion in the workplace, a sense of belonging, contributing value and working towards a meaningful purpose.
- Economic: Ability to take care of oneself and one’s family through fair and equitable pay and benefits, with the potential for advancement.
- Environmental: Ability to live and work in environments with access to clean water and minimal or no pollution and other adverse environmental and climate impacts.
These descriptions can be defined even further, but illustrate the many factors that contribute to health and wellbeing.
How companies influence health
Even before the pandemic, the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO) recognized the workplace as a means to create health. According to “Happiness at Work” by Jessica Pryce-Jones, the average American spends 90,000 hours at work over their lifetime. The culture and environment in which this work takes place – whether at the job site, in an office, outside or a remote location, offers an untapped lever for promoting and sustaining population health.
Another way to unpack workforce health and wellbeing is to examine the role of the private sector in addressing the Social Deteterminants of Health (SDoH). SDoH are the economic and social conditions that influence individual and group differences in health status. These conditions are varied, and according to the Robert Wood Johnson Foundation include, for example, access to quality schooling, affordable housing, good jobs with fair pay, and safe neighborhoods. These conditions can be less than optimal due to structures and systems that perpetuate social marginalization and racism.
Many SDoH are influenced by the working environment. Companies can impact each of these determinants through their policies, procedures, programs and resources. Each of the SDoH categories are listed below with some considerations:
- Health and Healthcare: Do employees and dependents have access to affordable health care benefits? Is dental and vision included? Does the company offer an Employee Assistance Program? How robust are parental leave policies? Is management supportive of work/life balance? Is the work environment tobacco-free?
- Neighborhood and Built Environment: Does the location, structure, features and operations of the workplace support a healthy and safe environment? Are there procedures in place to prevent workplace injuries? Are physical movement and ergonomics prioritized? Is there good ventilation with access to fresh air and clean water? Are there environmental sustainability efforts?
- Economic Stability: Does the company have a stable workforce and do employees feel a sense of job security? Are there onboarding orientations and developmental plans in place for employees to learn new skills and grow? Are there adequate opportunities for mentorship and advancement? Is pay fair and equitable regardless of race, ethnicity or gender? Does the company offer a savings plan or 401K? Are financial literacy programs available?
- Education: Does the company offer educational assistance such as tuition reimbursement, college planning, or support for external training or certification courses? Are there academic affiliations and internship opportunities?
- Social & Community Context: Are there affinity groups that employees may join to share experiences and best practices, volunteer together or gather for social engagement? Do employees feel a sense of belonging? Does the company measure employee engagement and management support? Is there engagement with local community programs? Are there efforts to diversify the hiring pipeline and succession plans?
Other factors that impact health outcomes are social marginalization and inequities in the health care system. The pandemic has unveiled disparities in health with African Americans dying at higher rates than whites, despite the fact that they make up a smaller percentage of the overall population. White women are more apt to receive prenatal care and have comparably lower rates of maternal mortality than their black counterparts. Higher rates of suicide among transgender people, especially young adults, is another example of a health inequity. Employers are encouraged to examine the health of their workforce through a comprehensive DEI (diversity, equity and inclusion) lens to address health inequities among their employees and those working in their supply chains.
Recognizing the power of a company to create a culture of health and influence the social determinants of health strengthens the rationale for investing in the health and wellbeing of its workforce. As communities face increasing rates of chronic conditions, infectious diseases and the aftermath of Covid-19, health and wellbeing must remain a priority.
Frameworks to organize business action on health
Every company has a ‘health footprint’ and impacts population health in a multitude of ways. Frameworks are useful in understanding the broad influence that an organization may have knowingly or unknowing on health and wellbeing.
In “Building a Culture of Health – A New Imperative for Business,” John Quelch and Emily Boudreau highlight that companies impact public health in four ways: Consumer Health (the healthfulness and safety of the products and services it sells), Employee Health (the efforts it makes to insure the safety and wellbeing of employees and workers in the supply chain), Community Health (the investments it makes to improve the helath and safety in the communities where it does business) and lastly, Environmental Health (the impact of its operations on the environment – through carbon emissions, water use, etc.).
In a similar vein, in 2019, the Robert Wood Johnson Foundation introduced the evidence-based and multi-stakeholder-developed Culture of Health for Business Framework (COH4B) to encourage companies to embrace a broad view of health and wellbeing through a set of 16 practices. These practices cut across four areas of business, namely Strategic (e.g. building a health culture), Policies and Benefits (e.g. paid family and medical leave), Workforce and Operations (e.g. pay practices, occupational health and safety), and Community (e.g. environmental impacts, community involvement).
Both of these health frameworks highlight a number of issues that are becoming increasingly important in corporate sustainability and reporting.
From ideas to strategy
But what does it take to translate these ideas into practice within a company? How do you gain commitment and drive collaborative action at scale?
It starts with laying out the business rationale for improving a company’s culture of health. The reasons are many. The literature demonstrates that a culture of health can help to control health care costs, improve productivity and employee engagement, reduce waste, attract and retain talent, enhance workplace safety, improve revenue and even enhance shareholder returns. Once the business justification is established and leaders are aligned on the value, the business imperative to advance a culture of health should be integrated into the corporate strategy as a critical enabler.
The majority of mid- to large cap companies have benefits, programs, policies, procedures and resources and that allow them to ‘check the box’ on employee health and wellness. Their existance, however, does not translate into a valididated culture of health. It does, however, establish a starting point and provides a foundation upon which an integrated strategy can be built.
Understanding the current state of health and wellbeing of employees as well as expectations of internal and external stakeholders is an important first step. This data collection and analysis provides insights to inform the strategy. It reveals areas of strength and opportunities for improvement. There are many potential data sets that may be tapped for information – and a company does not have to have access to all of them. For example, what do the medical and pharmaceutical claims data show in terms of burden of illness and trends over time? What does the employee health assessment indicate regarding mental wellbeing, stress and life/balance? What are the engagement scores related to management and leadership support of employees overall wellbeing?
The pandemic has been a catalyst for some critical changes in corporate policies that support a healthy workforce. Many businesses have responded to COVID-19 by enhancing health care coverage – and covering all or the majority of costs associated with employees’ and dependents’ screening, diagnosis and treatment of the infection. Companies have provided paid time off for people who need to quarantine because of potential exposure to COVID-19, for those with symptoms or who are caring for a loved one with COVID-19. There has also been an increase in benefits to address the added burden of child-care, home-schooling, elder-care and mental health support for workers who are juggling multiple responsibilities while adapting to a work-from-home environment. These examples reflect the ability of of businesses to rapidly adapt their policies and processes to promote health, safety and prevention programs that enhance workforce wellbeing.
Each company is at a different point along the spectrum of recognizing their own ‘health footprint’ and building a culture of health. It is important to build on what currently exists, develop a strategy that aligns with the company’s values and goals, and celebrate the short-term wins to maintain the momentum.
Translating strategy into action
Driving the implementation of a forward-thinking and robust strategy on health and wellbeing rests on a number of critical factors:
- C-Suite and Board Commitment: Investing in a culture of health must be regarded by the Board, CEO and senior leaders as a business imperative that enhances the company’s most important asset: it’s workforce. Authenticity is important, as workers will readily sense the sincerity of intent. Elevating the health, wellbeing and performance of employees yields a sustainable competitive advantage and creates a culture of care.
- An Accountable Leader: An executive leader who is responsible for advancing the corporate culture of health is critical. Achieving a cultural paradigm shift is hard work. It requires a leader with the gravitas, resources, humility, trust and sheer willpower to move the needle on corporate wellbeing. Not every Chief Human Resources Officer nor Chief Medical or Health Officer has the skill set, orientation or staffing to drive this cultural change. It is best served by an executive who knows the business, can connect the dots between health and performance, and rally the necessary support to make a difference over a three to five year timeframe.
- Management Engagement. Those with direct reports have a high degree of influence on how their employees work, feel and engage. One of the top reasons people leave their job is due to their manager. Engaging, supporting, training and assessing managers on their ability to create an environment of health, wellbeing and performance among their teams is often overlooked, yet can have a profound affect on workforce productivity.
- Cross-Functional Collaboration. The importance of working across functional areas, departments, communities and regions cannot be understated. To drive a culture of health forward requires the engagement of business leaders, occupational health, human resources, diversity and inclusion teams, employee business groups, vendors, data analysts, benefits managers, procurement, facilities and others. The strategy for health is the North Star that helps to align each of these areas and leverages their unique ability to contribute to advancing health and wellbeing at work. By sharing the vision, mission and responsibility to work together, the culture will change, the metrics will improve and the business will reap the benefits of a healthier workforce.
- A Champions Network. Within any company resides untapped and energized employees who want to embrace wellbeing and serve as a workplace advocate for ‘whole person health’. It is this group of individuals, regardless of role, department or level, who can serve as ambassadors, amplify the message, carry the campaign, promote programs and resources, share and elicit story-telling and contribute to the momentum of creating health at work.
- An Environment of Trust: A psychologically safe work environment is where employees have permission to live healthy lives. What employee wants to hide the fact that they went for a 30 minute walk during their ‘workday’ for fear of being criticized, while they likely work extra hours and achieve their goals?
Measuring progress
Gauging corporate progress on health and wellbeing is going to be under increasing scrutiny going forward, and companies will need to embrace a broad set of metrics in the current operating environment. The earlier mentioned COH4B Framework, for example, includes key metrics for companies to measure their progress across strategic, policies and benefits, workforce and operation, and community categories. The metrics are wide ranging such as “inclusion of health in company’s value statements,” “estimated percentage of employees at the company making a living wage,” “number of employees with flexible scheduling arrangements,” and “Scope 1,2, and 3 GHG emissions.” COH4B has been mapped to the voluntary GRI Standards to enable companies to disclose their progress through sustainability reporting and drive continuous improvement. COH4B is an important step forward in enhancing disclosure on health and wellbeing and was recognized as a World Changing Idea by Fast Company in 2020.
More recently, in February 2021, the US Securities and Exchange Commission (S.E.C) passed a historic rule requiring companies to disclose “any human capital measures or objectives that management focuses on in managing the business.” Further, companies need to disclose information in three areas: “attraction, development, and retention of personnel.” This ruling is noteworthy given that the S.E.C has not changed its human capital ruling since 1977. It represents a signifcant shift in how companies will need to approach human capital to meet the changing expectations of stakeholders, including investors.
The signals are clear that the time has come for companies to get serious about measuring their impact on health and wellbeing – and expand the depth and breadth of their disclosure.
Heading into the future
As companies grapple with new expectations of their role and responsibilities in building a culture of health, they should bear in mind the concept of health equity. According to the Robert Wood Johnson Foundation, this means that everyone should have the opportunity to live the healthiest life possible, irrespective of who they are, where they live, or how much money they make. To do this, businesses need to step up to help tackle systemic challenges such as structural racism and lack of living wages. This also means that companies need to take a hard look at how they treat all types of workers, including those who are part-time, contract or those in their supply chains.
Another critical area is mental health. Much has been written about the detrimental impact of the pandemic on the prevalence of depression, anxiety and stress. Now is the time to move mental health out of the corporate closet, reduce the stigma, increase awareness and parity with physicial health, and contribute to the much needed movement to improve mental wellbeing.
Covid-19 presents a pivotal opportunity for leaders to strategically commit and allocate sufficient financial and human resources to enhance the health and wellbeing of employees over the long term – and create a resilient, agile workforce that is positioned well for the future. The baseline health of a population is an important determinant of the clinical outcome associated with Covid-19. We will, inevitably, face other viruses and health threats. Now is the time to amplify efforts for sustained employee health and wellbeing. The workforce of the future has identified a culture of health as a key decision factor for their prospective employer. Investors are awakening to the fact that good health is smart business. And leaders can respond to this call to action by being deliberate in their intent to contribute to a healthier workforce, families and communities. Companies have so much to gain from each high-performing, committed, safe and healthy employee.
About the authors:
Cathryn Gunther is Global Head of Associate Health & Wellbeing at Mars. She serves as a catalyst for corporations to advance their culture of health and wellbeing for the betterment of its workforce, business, society and the world. Her mantra: Good Health is Smart Business.
Piya Baptista is a Director in the North America practice of Corporate Citizenship, a consulting firm specializing in sustainability strategy, ESG disclosure and reporting, and social and environmental impact.
[i] Loeppke R, Taitel M, Haufle V, Parry T, Kessler RC, Jinnett K. Health and productivity as a business strategy: a multiemployer study. J Occup Environ Med. 2009 Apr;51(4):411-28. doi: 10.1097/JOM.0b013e3181a39180. PMID: 19339899.