Employee assistance programmes or wellness programmes have become widespread across South African employers – for good reason. There is an increased prevalence and impact of lifestyle-related diseases in the workplace – diseases such as diabetes, pulmonary conditions and heart disease – at younger ages than in the past. Much of this may be attributed to behaviour such as inactivity, smoking, poor nutrition and alcohol consumption.
The impacts of these lifestyle diseases on individuals are material and range from a decreased quality of life to disablement, to premature death. The employer experiences the financial costs of increased absenteeism. Furthermore, costs of healthcare and group insurance are correlated with the increased prevalence of such illnesses. The retirement industry is also affected as the
long-term affordability of insurance cover is impacted.
There are two general approaches to implementing wellness initiatives, namely Primary Prevention and Secondary Prevention. Primary prevention is aimed at preventing the onset of the disease through impacting health-related behaviours and risk factors. Secondary prevention attempts to diagnose and treat diseases at an early stage before the onset of complications. The logic of wellness interventions is therefore based on influencing the behaviour of individuals to positively impact their health, which has a range of mutually beneficial outcomes, creating a win-win-win for individuals, employers and the industry.
The key challenge is that the usage of such programmes is limited, with less than 50% of employees participating on average. Of those identified for preventative interventions, less than 20% actually utilise the services offered. Even then, such programmes do not typically extend to the family members of the employee, who may often be as at risk, also impacting the employee’s performance at work.
The health interventions are great and necessary, but do not result in Total Wellness Outcomes.
We need to broaden the scope of traditional wellness beyond physical and mental wellness to include financial wellness, if we aim to unlock the full potential of such interrelated interventions. The American Psychological Association recognises financial stress as the leading cause of smoking, weight gain, alcohol and drug abuse among employees in the US. Forty-five per cent of employees polled by PwC in the US indicated that financial matters were their main cause of stress – more than jobs, relationships and health combined. The Sanlam Benchmark research showed that 73% of respondents experienced financial stress, with more than half admitting that it was having a negative impact on them at the workplace. Unsurprisingly, debt was identified at the key contributor to financial stress.
Debt has been shown to negatively affect both physical and mental health.
Employees with debt present a higher prevalence of the following physical ailments: high glucose levels, high blood pressure, migraines, heart disease, fatigue, restlessness, ulcers and digestive tract problems.
Employees with debt also present a higher prevalence of mental health ailments.
An approach was made evident via a case study run by Sanlam at one of South Africa’s largest employers.
Sanlam was approached by the employer to combine its actuarial, health and consulting expertise to identify the key health and financial correlations impacting absenteeism at the employer. The study found that there were indeed correlations between financial circumstances, mental wellness, physical wellness and absenteeism. By identifying the key health and financial indicators that negatively impact productivity within the employer, they have been provided with insights that will empower them in applying interventions in problem areas.
The key insights gained from the actuarial analysis are that:
- Earning weekly wages rather than a monthly salary correlates with the degree of absenteeism.
- The absolute value of an employee’s salary is inversely correlated with absenteeism.
- The structure of the employee’s package is correlated with absenteeism and physical wellness.
- What an employee spends his money on is correlated with mental wellness.
- Employees with monthly contributions to financial instruments and lifestyle factors (retirement savings, insurance, gym, etc.) had an inverse correlation with being mentally unwell.
- Financial indebtedness is positively correlated with absenteeism.
- Financial indebtedness is inversely correlated with physical health.
- Financial indebtedness is inversely correlated with mental health.
- The intensity of an employee’s illness is positively correlated with his/her financial indebtedness.
The research indicates compelling returns on investment in total wellness in a range of up to R6 for every rand spent. For instance, it is anticipated that the employer analysed would experience an annual saving of up to R20m in the first year after the implementation of a successful intervention based on Sanlam’s insights.
Based on an analysis of various programmes, the following factors were identified as necessary conditions for the successful implementation of such interventions:
- Excellent communication – including face-to-face sessions, mass communications and clear messaging from the leadership of the employer as well as the direct line managers
- Convenience of interventions – ability of employees to access interventions considering time, distance and cost
- Public buy-in from leaders – the leaders need to publicly endorse the intervention and participate openly to act as examples for their teams Utilising existing infrastructure – minimising costs by leveraging existing space, programmes and communication channels
- Continuous evaluation and feedback – the impact of interventions must be measured per intervention and in aggregate, in order to improve future interventions.
Debt is a lifestyle disease brought about by behaviour patterns. It is the #1 cause of financial stress in South Africa; it is prevalent at epidemic levels among employees across socio-economic, education and demographic bands; and it contributes significantly to physical and mental health problems. Retirement funding can’t fight for attention in that context. If we want to
help move more members of our funds to better retirement outcomes, we first have to empower them to move towards better financial behaviours. This requires dealing intelligently with the big issue of debt.
Branch Head: Gauteng | Principal Consultant