Investing in Employee Health Pays Handsomely in Employee Health and Investor Returns

Investing in Employee Health Pays Handsomely in Employee Health and Investor Returns

Three recent studies found that companies with award-winning wellness programs also have award-winning stock prices, outperforming the Standard and Poors (S&P) Index by 7-16% annually.

Previously, approximately 50 scientific, peer-reviewed studies confirm the effectiveness of robust corporate health strategies for reducing medical costs and other benefits.

The new studies link investment in employer health with financial performance.

According to one study appearing in the Journal of Occupational and Environmental Medicine, companies that have won the American College of Occupational and Environmental Medicine’s Corporate Health Achievement Award (CHAA) outperform S&P 500 companies at a ratio of nearly 2:1.

The Corporate Health Achievement Award is not the only award that indicates a business invests in the health and safety of its employees. Another award, the C. Everett Koop Award offer recognition to organizations that promote wellness programs that result in behavioral changes among employees that actually reduce health risks. Healthy Americans report that Koop winners outperformed S&P 500 businesses by 2.35 to 1.00, showing that the CHAA results were not an isolated instance.

Psychological Science also states that while companies receiving the Koop award also lost value during the stock market downturn, these companies were not hit as hard. Further, the Koop award winners improved performance faster than the rest of the market during growth periods.

Another study evaluated the stock performance of companies that achieved high marks on the Health Management Best Practices Scorecard from the Health Enhancement Research Organization (HERO). The American College of Environmental and Occupational Medicine reported that high scoring, publicly-traded companies appreciated by 76% more than the S&P 500 Index over a 6-year period.

Conclusion

Stock prices with award-winning health programs outperform the market.  The studies demonstrate correlation rather than causation. In other words, even if the programs did not cause the stock to rise,  emphasizing comprehensive employee health initiatives is associated with  high-performing companies.   An effective corporate health strategy is also a key operational strategy.

Unfortunately, the transformation to becoming an employee health-focused company that enjoys the types of results mentioned above isn’t an instant fix. In fact, it may take years, so consider this a long-term investment in your employees and your business.

Steps Businesses can Take for Positive Health Focus Content

In light of these insights, the challenge now is to shift the focus of your organization to take employee health into account in multiple areas, including these:

-Encourage use of covered preventive health benefits.
-Measure avoidable health conditions through a proven employee health risk assessment.
-Offer disease management programs.
-Provide behavioral health programs to address depression and anxiety.
-Support healthy lifestyles with corporate policies, environment and education.

The more changes you make as a business to get employees active and healthy, the better that investment will pay off for your business over time – in productivity, profit, and investor attention.

About

Scott is President of Wellco, based in Michigan. Scott is a frequently- invited expert and speaker regarding making sense of employer health care strategies and return on investment.     Scott and Wellco have developed award-winning, result-oriented systems to measurably improve employer health conditions and costs.  Contact Wellco.

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