I think that if you asked the vast majority of employers WHY they provide employee benefits today, they would say that it is the very unfortunate customary cost of doing business. In other words, it is expected that most employers, at least the larger ones, will offer health benefits to their employees and that the primary purpose of doing so is to attract and retain them. They will also say that offering, managing and paying for health benefits is a drag.
Interestingly, with Obamacare came the ability of employees to move employers and not lose health coverage. In other words, the law had the unintended consequence of removing the retention value of employee health benefits. Employees are no longer “locked in” to existing employer health plans due to pre-existing conditions. And since health benefits have become particularly expensive and short on frills, their usefulness in attracting employees is likely getting pretty tenuous. In any event, now that any American can get health insurance through the public exchanges, there is also a viable alternative than staying at a job to get coverage.
A secondary reason that many employers provide certain benefits, health or otherwise, is to increase employee productivity. While very hard to measure in most workplaces, many believe that the addition of certain benefits, particularly wellness and exercise programs, will make people work harder or better because they are healthier. The theory is this: healthier employees are less likely to miss work and thus will be more productive and also cost the company less on the health insurance front. It is certainly true that employees are likely to be more present if they are healthier (e.g., fewer absences); whether that translates into more productive is another question altogether. I don’t know about you, but I have worked with lots of people who were there but not all there, if you know what I mean. The fact that they were present in the workplace actually made it harder to get things done due to their ability to fill a work vacuum with lint, not value.
So much energy has gone into efforts to make employees healthier and so little workplace benefit appears to have come of it, at least in terms of reduced costs or higher productivity, that I have to believe the theory is generally misguided. To date the most effective programs to increase employee presenteeism and productivity/satisfaction have been those that allow for flexible work hours, those that give employees time off to deal with family issues and those that allow telecommuting; in other words, work-life benefits, not work-health benefits. And yet workplace health and wellness programs continue to thrive, offering to help employees deal with health challenges that range from poor posture to weight management to chronic illness. Studies abound showing that these health-related workplace wellness programs don’t do all that much for cost-savings or employee morale and might even work in the opposite direction if they are perceived as overly paternalistic or reminiscent of the Bataan death march, sponsored by FitBit.
Well the health cost problem may well get solved another way (probably will in fact) by the creative solution of not dealing with it anymore. The trend is to move employees into private health insurance exchanges and cap the employer’s financial risk or, in more extreme cases, to drop health benefits altogether. We are at a point where it is estimated that somewhere between 30%-50% of all employers will put their crew into private health exchanges and get out of the health benefit middleman business. Some, like me, believe the numbers will be much higher. We are also at a point where fewer employers offer healthcare benefits every day.
If employers are out of the health benefits business, will they get out of the benefits business altogether? I think not. Because work productivity and retention will still be important motivators even when health costs and health status are no longer front and center issues for employers. Thus, the employer attention will shift to paying for benefits that directly impact those measures, hard to measure though they may be. This means that all those wellness guys trying to sell health cost reductions will have to change their marketing materials to re-focus on workplace satisfaction.
If we have learned one thing from all the workplace wellness folderol it is this: when workplace wellness activities become fun (competitions and tournaments among employees, for instance) that they seem to move the dial, albeit probably pretty slowly, on employee satisfaction, retention and productivity. Note that I did not say that they move the dial on healthcare status or cost, because they basically don’t do that. Instead there seems to be evidence that some of these fun-focused programs create happiness and community, and those are human conditions that tend to make people want to stay where they are and be more productive.
My favorite recent example of this phenomenon studied two specific employee benefits which happen to be my most favorite two: standup comedy and chocolate. Seriously, I am not kidding (although if I were you would probably like it, which would make you happier and more productive). In a study called Happiness and Productivity done at the University of Warwick in the UK, researchers showed employees videos of famous comedians telling jokes and offered them free chocolate and fruit snacks; they then measured the employees’ happiness and workplace productivity before and after. Their conclusion was pretty decisive: make people happier through these excellent legal substances—chocolate and comedy—and you create a higher value workforce. There wasn’t any evidence that the chocolate provided was the 70% dark, high anti-oxidant variety, so no attempt was made to actually make anyone healthier per se. Happiness was the goal and the unit of measure.
Many of you are likely reading this and saying, “Duh; if my workplace made me laugh frequently (due to actual amusement, not the ironic non-productivity of my colleagues) AND doled out free chocolate, I’d stay there til I died at my desk. Hell, I might not even go home at night.” Or you would be at least 12% more productive, as the Warwick study shows. That is some pretty good ROI for what could be done through free YouTube showings of Jim Gaffigan and a bag of Hershey’s Kisses. I can assure you it is cheaper than anything you would buy that includes a wristband and an app, unless the wristband shows YouTube sketches by Jim Gaffigan. The Hot Pockets one is a personal favorite, although the one about bacon is also a scream. I highly recommend them when you need a productivity boost. Note that neither of these comedic topics have any correlation with improved health and perhaps are evidence of the value of the opposite!
Anyway, as Charles Schultz has clearly demonstrated, Happiness is a Warm Puppy, and thus this whole field of employee benefits study opens us up to some pretty interesting opportunity for creativity. Forget wellness apps for walking and weight loss engagement programs and the rest; instead, how about a free chocolate vending machine, a brick-walled comedy club in the break room and a warm puppy sharing program? How about a beer tap and a sports bar instead of a health club? How about a theater on campus that shows 24-hour Will Farrell movies while force-feeding you Raisinets? That way, both chocolate and fruit are covered.
Of course the corollary to this whole argument is that unhappy employees are a downer for everyone else and have lower productivity. Of course that is intuitively true, but the Warwick study specifically demonstrated that people who had family-related recent trauma (bereavement, major illness) were 10-12% less productive than others. This is a pretty interesting piece of information to consider and could lead employers to discriminate against people with those situations if they could subtly figure out how to do it. On the other hand, the workplace presence of chocolate, collegial laughter and a warm puppy might get them back on track faster.
Gotta get back to work now so pass the Raisinets; I have a big project to do! I’m helping Nestle (Raisinets) and Ghirardelli position themselves as employee benefits solutions. Yeah, I wish.
And in case you need to be extra productive, here are Jim Gaffigan’s hot pockets and bacon routines. They are so funny you will, at least theoretically, want to work your butt off.