[SERI COLUMN] Companies need to focus on health

Well-equipped company gyms around Korea attest to their recognition that a fit body leads to a fit mind. On the other hand, companies could do more in helping their employees stay healthy, highly energized and productive. Not only would employees benefit more but companies could be rewarded far more than they realize.

The development of corporate health care can be divided into three stages: individual responsibility, company support and company-led. In contrast to companies in other countries, Korean companies remain stuck at the company support level, where support is provided for an individual employee’s own health-care regime.

To move to the next stage and thus enhance their competitiveness, companies need to adopt a new mind-set toward employee health care. They must see it as a business concern and target for investment. For example, SAS, a software company and winner of the “2011 Best Workplace” award, spends $1.41 on employee medical care, including an in-company hospital and health-care center, for every $1 spent on operating costs.

The payoff can be substantial. According to Tony Schwartz, president and CEO of the U.S. consulting firm Energy Project, the profit and net income per share rose 19 percent and 28 percent, respectively, at companies with a high level of employee concentration.

Understandably, some Korean companies may question the rate of return on investing heavily in employee health care. Such is the case in other countries. In a survey by global human resources consultant Towers Watson, 38 percent of the responding companies cited insufficient systematic data management of employees’ health as a major obstacle.

The remedy is found in the Wellness Scorecard, which not only measures an employee’s physical health but also includes his or her mental, social and spiritual well-being. Furthermore, the scorecard should be intertwined with business metrics such as output and revenue.

The program would not only include setting goals and frequent monitoring of performance but also counseling and holding managers accountable for achieving positive results.

While introducing the Wellness Scorecard, an integrated infrastructure should be simultaneously established. The whole system, managed by a newly assembled staff, would integrate and simultaneously manage medical examinations, the company fitness center, sports teams and funds for giving up smoking and losing weight. It would also collect information on each employee’s health changes and problems.

Health examinations and support programs for mental health should also be strengthened. Current employee health examinations only distinguish those who are able to perform their duties from those who cannot. The medical testing must be upgraded to a comprehensive examination in order to prevent various illnesses and diseases. In particular, to respond to the rise in mental illness, counseling and examinations must be expanded. Hewlett-Packard regularly conducts mental examinations and provides counseling. And Marriott International operates a free phone counseling service so that employees can receive advice from specialists.

Also, companies must make health-care programs easily accessible to employees. A majority of employees are unable to take advantage of such health-care facilities due to time constraints and a lack of willpower. Therefore, a service that actively seeks those in need of a health-care regime is recommended. At oil refining company Chevron, a personal trainer visits the work place to lead employees in stretching exercises. There also is a need to develop an in-house Web site to share tips on health and exercise.

Lastly, enhancing corporate performance through the use of the Wellness Scorecard requires attention and effort from all levels of the corporate ladder. CEOs should take the initiative and set an example by starting their own health-care regime. But the success of the Wellness Scoreboard will rest on middle managers. They will be the key to developing a corporate culture of fitness. They not only must promote the program but also develop a keen interest and provide support for employees’ health care. Finally, someone to take the lead in promoting health care and education on health issues must be chosen.

What results have been made? Health-care products and pharmaceuticals provider Johnson & Johnson has managed to reduce absences by 78 percent, lowered employee smoking by 66 percent and employees with high blood pressure by more than 50 percent since it started investing in health care in 1995.

But CEOs who adopt the Wellness Scorecard must not expect to see rapid results, including improvements in employees’ health and enhancement of productivity. Reducing smoking and drinking in the Korean corporate culture would require a sea of change in attitudes and habits, not to mention shedding excess weight. For health care to become an integral part of culture and to produce results takes a long time; therefore, it is important to have patience and continue to invest in that area. Above all, integrating health care into the corporate culture and letting employees naturally develop an interest in their health will lead to a healthier, more productive workforce.

*The writer is research fellow at Samsung Economic Research Institute. For more SERI reports, please visit www.seriworld.org.

By Kim Chi-poong