Everyone wins with healthy ‘fourth bottom line’
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There is a direct financial correlation between employee wellness and business financial success, writes Brett Tromp.
Johannesburg - At a meeting between the ministers of health from Southern African Development Community (SADC) and the private sector quite a revolution took place.
The ministers approved in principle a new concept known as the Fourth Bottom Line reporting.
On Monday in Joburg several ministers and business leaders will start an international dialogue about consultations to introduce this concept to all SADC countries.
Businesses are often expected to report on environmental, human resource and financial issues in what is called triple bottom line.
But have you thought about the issue of health as being the centre of the very success of a company?
According to the outlook of the World Economic Forum (WEF) on the global agenda, 10 top trends will face the world over the next year.
They are: deepening income inequality, persistent jobless growth, lack of leadership, rising geostrategic competition, weakening of representative democracy, a rising population in the developing world, increasing occurrence of severe weather events, intensifying nationalism, increasing water stress, and the growing importance of health in the economy.
The major challenge to be addressed arises from the substantial increase in the incidence of non-communicable diseases due to unhealthy lifestyles.
What are the drivers of this epidemic of lifestyle diseases that are resulting in so many deaths? There are two key areas of concern: poor lifestyle behaviours and chronic conditions.
In terms of lifestyle behaviours, key contributors to early mortality are physical inactivity (a lack of regular exercise), poor nutrition, smoking and alcohol.
The four chronic conditions that are responsible for driving this epidemic of lifestyle diseases include diabetes (a major problem in South Africa), heart and lung diseases, and cancer.
Together, these poor lifestyle behaviours and chronic conditions account for an astonishing 60 percent of all deaths worldwide.
Something has to be done to change this situation, and fast.
The problems associated with lifestyle diseases have a huge effect in the workplace, dragging down productivity, affecting real and lasting employee engagement, and restricting the development of a positive and proactive employee culture.
There is no doubt that the risks of lifestyle diseases play a key role in employee health and wellness and that this affects the ability of the company or organisation to perform to full capacity.
The effects are felt at a tangible level in higher incidences of employee illness and absenteeism, reduced employee morale, and significantly reduced levels of employee engagement and productivity in the form of “presenteeism”.
It is not the company alone that experiences the negative effects, it is the employees themselves in having less money to spend, due to their increased out-of-pocket medical expenditure. There should be real motivation on both sides to change things for the better.
In the past 20 years, there has been a significant rise in the prevalence of non-communicable diseases relative to infectious diseases.
In SADC countries, infectious diseases such as HIV/Aids, tuberculosis and malaria are the major focus, and undoubtedly take a huge toll in lives and in reducing the effectiveness of any workforce.
However, the incidence of noncommunicable diseases is growing at an alarming rate in developing countries .
The World Bank reports that 50 percent of the differences between the economic growth rates of developing and developed countries stems from poor health and low life expectancy.
Ultimately, the healthier the citizens of a country, the more effective the workforce, and the better the health of their children, the workforce of the future.
This is endorsed by the World Health Organisation’s Global Plan of Action on Workers’ Health 2008-2017, which says: “Health promotion and the prevention of non-communicable diseases should be further stimulated in the workplace.”
What can be done to reverse this worrying set of trends?
First, companies need to be more progressive and action-oriented in their thinking towards employees, particularly when it comes to providing wellness programmes and encouraging the participation of employees.
According to Discovery research, employees who participate in wellness programmes at work exhibit lower absenteeism. Those who don’t take part show higher levels of absenteeism, accounting for a rise of about 3 percent – that is a significant effect on the bottom line for any organisation or company.
The company’s data on service agent health and performance undertaken in 2010-12 indicate better service ratings from non-smokers than smokers.
Further, the overall performance in terms of service delivery was better for non-smokers and their risk of error was lower. There is a tangible correlation between good lifestyle behaviour and healthy lifestyle choices, and better personal and organisational performance.
Similar research data from the medical aid company in the same period looked at the effects of employee wellness on productivity levels.
The results clearly demonstrate the effects of poor health on productivity. Employees in poor health had a -8.9 percent effect on productivity, compared with their healthier counterparts. who had a 6.5 percent positive effect on overall productivity, a direct effect on the bottom line.
What we are seeing in companies is the emergence of a “fourth bottom line” – the integration of health metrics into corporate reporting. It makes complete sense if you consider the words of a world expert in this field, Dr Maria Neira, director of the Department of Public Health and Environment for the WHO, who said: “The wealth of business depends on the health of workers.”
This is the reality of the new “fourth bottom line” – the direct financial correlation between employee wellness and business financial success.
As a result, there is a new way of thinking emerging in the corporate world. Health metrics in corporate reporting are becoming a global priority in a sustainability report.
It is fast becoming a critical data point for effective business strategy decision-making, not only from an ethical and corporate-care standpoint, but also because it is a direct indicator of the well-being of the country’s workforce. This makes it a national priority.
What action is needed to make the “fourth bottom line” a business reality and one that can make a difference to the improved wellness of people, workforces and countries around the world? At a practical level, the Vitality Institute recently convened a working group of global business leaders, academics, health professionals and participants from the UN and WEF to propose the development and implementation of comprehensive health metrics by the end of this year.
There will be continuous engagement with all key stakeholders and influencers, such as the government, large investors, advocacy groups, standard-setting bodies and leading companies (to act as first movers). The goal is to establish workforce health metrics as an integral indicator of overall organisational performance within the broader corporate accountability framework by 2020.
The “fourth bottom line” is rapidly becoming a key differentiator in the way we achieve greater corporate and global wellness in the decades to come and the ultimate benefit is that everyone gains.
* Tromp is chief financial officer of Discovery. If you want to attend the Frank Dialogue with the SADC ministers of health in Rosebank, Joburg at 6.30pm on Monday, e-mail [email protected]
** The views expressed here are not necessarily those of Independent Media.
The Sunday Independent