Healthy Employees, Healthy Bottom Lines

That’s why giving employees health insurance is essential.

Looking at the Western workplace today, we see two very different and competing worlds. In one world, we see a clear manifestation of the burnout disorder: a business culture single- mindedly obsessed with quarterly earnings reports, maximizing short- term profits, and beating growth expectations. In the other world, we see an increasing recognition of the effects workplace stress can have on the well- being of employees — and on a company’s bottom line.

There is growing evidence that the long- term health of a company’s bottom line and the health of its employees are, in fact, very much aligned, and that when we treat them as separate, we pay a heavy price, both personally and collectively. Individually, we compromise our health and happiness. For businesses, the costs will be exacted in dollars and cents, talent retention, and diminished productivity. But the reverse is also true — what’s good for us as individuals is also good for businesses and for countries. And sick care is a lot more expensive than real health care.

The World Economic Forum, held in Davos, Switzerland, each year and typically associated with finding solutions to the big economic problems facing us, is a kind of weather vane for ideas being embraced by political and business leaders around the world. In 2013 and even more so in 2014, it was clear from the multiple sessions devoted to mindful leadership, meditation, neuroscientific findings, and even “rethinking living,” that the powers that be are beginning to accept the connection between our ability to deal with the crises that surround us and the way we live our lives and care for our bodies, minds, and spirit. The plenary session I moderated in January 2014 was entitled “Health Is Wealth,” referencing the health of individuals, companies, and countries alike.

Studies show that U.S. employers spend 200 to 300 percent more on the indirect costs of health care, in the form of absenteeism, sick days, and lower productivity, than they do on actual health care payments. In the United Kingdom, stress results in 105 million lost workdays each year. No wonder Harvard Business School professor Michael Porter recommends that companies “mount an aggressive approach to wellness, prevention, screening and active management of chronic conditions.” The voice of sanity is getting louder in our burned- out world, challenging the conventional wisdom that during hard times you cut employees’ health care benefits.

Howard Schultz, the CEO of Starbucks, faced such pressure from investors during Starbucks’ less profitable years. But he did not give in. At age seven, Schultz had watched his father get fi red from his job as a driver for a diaper delivery service after slipping on a sheet of ice at work, breaking his hip and ankle. His father was sent home without health care coverage, workers’ compensation, or severance. During Starbucks’ earlier years, Schultz was adamant about expanding health care coverage to include part-timers who worked as little as twenty hours a week, unheard of in the late 1980s. Two decades later, during the company’s toughest financial period, Schultz stood fast, refusing to cut those benefits despite the urging of investors. Schultz sees the benefits plan “not as a generous optional benefit but as a core strategy. Treat people like family, and they will be loyal and give their all.” It’s this principle that led to the creation of BeanStock, the company’s employee stock option plan, which turned Starbucks employees into partners.

Too many companies don’t yet realize the benefits of focusing on wellness. “The lack of attention to employee needs helps explain why the United States spends more on healthcare than other countries but gets worse outcomes,” says Jeffrey Pfeffer, professor at Stanford’s Graduate School of Business. “We have no mandatory vacation or sick day requirements, and we do have chronic layoffs, overwork, and stress. Working in many organizations is simply hazardous to your health. . . . I hope businesses will wake up to the fact that if they don’t do well by their employees, chances are they’re not doing well, period.”

One company that did wake up to the importance of employee health was Safeway. The supermarket chain’s former CEO Steve Burd recounts that in 2005 Safeway’s health care bill hit $1 billion and was going up by $100 million a year. “What we discovered was that 70 percent of health care costs are driven by people’s behaviors,” he says. “Now as a business guy, I thought if we could influence the behavior of our 200,000- person workforce, we could have a material effect on health care costs.”

So Safeway offered incentives for employees to lose weight and control their blood pressure and cholesterol levels. It established a baseline health insurance premium with behavior- based discounts. As Burd explained, “If you are a confirmed non- smoker, we give you a discount. If you have cholesterol under control, a discount. Blood pressure under control, a discount. And so behavior becomes a form of currency for people to accomplish their lifestyle changes.” And it was a huge success. “You allow and encourage your employees to become healthier, they become more productive, your company becomes more competitive,” Burd says. “I can’t think of a single negative in doing this. Making money and doing good in the world are not mutually exclusive.”

Esther Sternberg explains that “healing is a verb; the body is constantly repairing itself. That’s what life is. You know, a rock just sits there and it eventually gets into sand or mud or something as the elements affect it. But a living being is constantly repairing itself against all of these different insults at a very molecular level, at a cellular level, at an emotional level. So disease happens when the repair process is not keeping up with the damage process.”

Right now in the majority of our companies and the majority of our lives, the repair process is not keeping up with the damage process. But there are many different paths to well- being, and in the next few sections we will explore some of them.

Excerpt from Thrive pp. 34–38