Back in business

first_imgBack in businessOn 6 Aug 2002 in Personnel Today The provision of occupational health services in the UK isat an all time low. But with employees being the backbone of anyorganisation,  Caroline Horn putsforward five good reasons to get OH…Recent research has shown that only 30 per cent of the UK’s workforce haveaccess to an occupational health service. The survey, conducted by theInstitute of Occupational Medicine for the Health & Safety Executive, alsorevealed the steady decline in the provision of occupational health – 10 yearsago, around half the country’s workforce was covered. Finance and transport industries are among the worst providers (35 percent). A spokesperson for the TUC commenting on the research, stated:”Worryingly, in some sectors, the main reason given for having nooccupational health support was that there were no relevant hazards. “This included more than 20 per cent of finance sector employers,although their staff suffer from stress and RSI; more than 15 per cent oftransport companies, where staff suffer from musculo-skeletal disorders; andmore than 10 per cent of retail companies, whose staff are also prone tomusculo-skeletal disorders.” Owen Tudor, health and safety specialist for the TUC, says: “Thesituation is getting worse for two reasons. Companies are downsizing andoutsourcing, and healthcare is one of the central functions they can easily getrid of. And external occupational health services are more vulnerable to futurecost-cutting exercises. “The second reason is that in the UK, we tend to cut costs to improveprofitability, instead of thinking: ‘let’s increase production by ensuring thatour staff are at work, and well’.” Chief executive of the Businesshealth Group Ed Radkiewicz, says: “Acompany will typically spend around 15 per cent of the value of its IT systemon maintenance to avoid breakdown. But the workforce represents the largestcost in a company – and often, it will spend very little on its healthmaintenance.” Part of the problem, says Janice Kaye, managing director of OH serviceprovider MMS, is that companies are notoriously poor at absentee analysis. “If companies don’t know what their problems are,” she asks,”then how can you convince management to put their money up front to solvethe problem?” Radkiewicz adds that many businesses don’t see health and well being as apossible advantage, because “they are not sure what the issue is andthey’re not confident they can do anything about it”. But even where companies do make a provision for occupational health, theTUC concludes: “Very few of the workplaces surveyed actually assessed thecosts and benefits of their OH provision. In the workplaces that did, the costswere evaluated more often than the benefits, which is pretty pointless.” To get companies back on track, the boards need to be convinced that OH isjust as much a strategic business issue as any other HR initiative. We look atfive areas where OH intervention and comprehensive support – which protects andpromotes the health of employees – can help productivity and add value to thebottom line of any business. 1 Business benefits There are a number of issues companies should consider when looking at thecosts and benefits of OH systems. In addition to the direct costs, theseinclude productivity and risk assessments, as well as employee value andcorporate responsibility. According to the CBI, British industry loses around £13bn annually throughabsence caused by health issues. While this includes the direct costs of absence,companies also need to factor in increased insurance premiums – up by 6 percent last year across the UK – and, where necessary, ill health retirementpackages. In terms of staff turnover, employers need to consider the additional costsof recruitment, training and the associated drop in productivity. In fact, healthcare provider Businesshealth Group estimates that around 40per cent of a company’s total staff costs are related to health. Radkiewicz says: “Businesses need to understand what the problem is,how important it is, and how to deal with it.” One of Businesshealth’s customers, Direct Line, had problems related tostaff turnover and absenteeism that affected payroll costs, training, customerservice and morale. Direct Line estimated that staff turnover was costing £27m each year, andabsenteeism £6.5m. It therefore introduced a pressure management programmedeveloped by Businesshealth, to tackle stress-related issues among 600 of itsemployees in Bristol. As a result, employee turnover dropped by 5 per cent, representing a savingof £150,000 in direct payroll costs alone. The Engineering Employers Federation says that tackling stress can have arange of positive effects on a company’s output, as it impacts on individualperformance in a number of ways, including work quality, resistance to change,and relationships with colleagues and customers. Even if companies remain sceptical that OH measures can contributepositively to the bottom line, failing to tackle issues such as stress can be afalse economy. The TUC’s Tudor explains why: “For employers who do provide OHservices, the legal imperative is very strong. While the first reason theygenerally give for introducing OH measures is ‘because it is a good idea’, thesecond is to minimise the possibility of litigation.” 2 Absence Management While there are many different reasons for staff absence, poor health is themost worrying. It is estimated that we lose around 700 million working days ayear to aches, pains and strains. Of those, around 3.7 million days are lost through back problems. Workplacestress costs a further £3.75bn each year, says the HSE, and the loss of 6.5million working days. Musculo-skeletal disorder (MSD) affects around 1.2 million people, costsaround £10bn each year and necessitates up to 12 million GP consultations,costing the NHS nearly £500m. It now accounts for 60 per cent of allhealth-related absenteeism – but effective occupational health systems can helpto reduce its impact. Four years ago, British Polythene Industries (BPI) was experiencingspiralling injury and absenteeism rates across its 3,000-strong UK workforce.Each case of MSD absence at the firm resulted in an average of 26 working dayslost. BPI group health and safety manager Andy Collinson wanted to find aneffective way of rehabilitating injured employees, believing a proactiveapproach would reduce levels of absenteeism. The company approached MMS National – a UK-wide network of 3,000 osteopaths,chiropractors and physiotherapists who provide preventative training andimmediate treatment for MSD injuries. Within a year, MSD absence at BPI was down 75 per cent. “In financial terms, the benefits outweigh the costs by 12:1,”says Collinson. But stress is also a major and growing contributory factor to absence, withthe CBI estimating that mental health problems account for around 53 per centof sickness absences. Gary Booton, health and safety manager for the Engineering Employers’Federation, says: “Managing stress is integral to a business and impactson the day-to-day costs of managing absence and developing good systems. “The external driver, is the risk of litigation,” he adds. Rolls-Royce is one of the companies actively involved in stress managementand has used the Federation’s document, Managing Stress at Work(, to help reduce employee absence levels. Booton says: “Rolls-Royce trained 75 per cent of their managers instress management using our formulas. In the first year, there was a 25 percent drop in absences caused by depression.” 3 Attraction and retention Most companies will state that attraction and retention, in addition toabsence management, are the key drivers in offering private health insurance.According to Mercer Human Resource Consulting, private health insurance isinvariably among the top three most valued benefits in staff surveys. In Watson Wyatt’s 2002 Employee Reward and Benefits Report, the most popularbenefit among employees is private medical insurance – which came above companycars and holidays. Indeed, private health insurance is likely to grow in popularity as anincreasingly stretched NHS makes private healthcare even more attractive. For individuals, private healthcare doesn’t come cheap. Research undertakenby HealthSure showed that while 68 per cent of people feel they should betaking more responsibility for their health, around 30 per cent delay essentialtreatment because of costs. Janice Kaye, managing director of MMS, adds: “Our own researchindicates that quick access to healthcare is important to employees,particularly those working in heavy industries.” Private healthcare can therefore be a very useful benefits tool foremployers. But before a company implements a health package aimed at improvingattraction and retention of employees, it needs to do its homework. Mercer points out that criteria such as membership eligibility for peoplesuch as part-time workers and family members, and issues such as what exactlywill be covered – treating pre-existing medical conditions, rehabilitationservices and so forth – all need to be addressed, and compared to what thecompetition currently has on offer. When electrical retailer Dixons was researching healthcare provision for itsemployees, it wanted all staff to have the option of healthcare as part of itsattraction and retention package. While full-scale private medical insurance for all employees would have beenprohibitively expensive, Dixons opted for a Health for Cash plan fromHealthSure, where employees pay a weekly premium in return for access toprivate healthcare providers. Raman Sankaran, marketing communications manager for HealthSure, says:”This is something that people can use regularly even when they are notill – it can help with dental care and optician costs. It is just as much aboutprevention as it is about cure.” 4 Work-life balance Enhancing work-life effectiveness will generally involve some or all of thefollowing: flexible working, innovative ways of working, individual careerdevelopment, and individual support. Occupational health measures can impact on all of these, says ChristineOwen, European partner at Mercer Human Resource Consulting. While generally regarded as a positive option for individual staff, flexibleworking can increase stress for line managers if a department experiencesfrequent short absences, or if incompatible people are job sharing. “OH systems can support managers and can also act as a catalyst forimproving other factors, such as management systems and interpersonalskills,” says Owen. Mercer is currently working with a police force that has around 1,700 staff,where a high level of sickness absence and a lack of ‘best practice’ work-lifebalance policies, have affected the work-life balance of staff. To address all of these issues, Mercer’s programme focused on developing anintegrated healthcare system to manage musculo-skeletal and psychological stressconditions, to reduce pressure at operational level. The results of theprogramme are currently being assessed. Non-standard work patterns, such as those adopted by call centres, should beassessed to check the impact they are having on an individual’s life outsidework, such as the effects caused by shift working, because absenteeism is notalways health related. When Direct Line investigated the reasons for absence at its call centres,consultant Business health found the group costing the most was the youngest.Many were taking on full-time employment for the first time, and still learninghow to create a work-life balance. In career development, occupational health measures can help to ensurepeople are suited to their role – long working hours or excessive travel, forexample, will have a negative impact. Employee assistance programmes could include an element of health, such ascounselling, or the provision of information on health screening, for instance.Bechtel UK, an engineering firm, introduced health-screening facilitiesafter a pilot programme, conducted by Businesshealth, revealed that staff hadsome serious health risks – especially cardiovascular and musculo-skeletalones. A personal health manager and walk-in clinics were made available to thoseemployees at risk, and a culture change is now underway – an unhealthylifestyle is no longer seen as a badge of honour. 5 Corporate responsibility Corporations are under increasing pressure to take responsibility for theiremployees’ health. The Government has set demanding health and safety targetsfor the British economy in the Revitalising Health and Safety (RHS) andSecuring Health Together (SH2) strategy statements, published in 2001. Targets include a 30 per cent reduction in the number of working days lostfrom work-related injury and ill-health, reducing the number of peoplesuffering from work-related ill-health by 20 per cent, and reducing the rate offatal and major injury accidents by 10 per cent, all by the year 2010. TheGovernment wants businesses to be at the half way mark by 2004. The costs – both legal and financial – of failing to meet health and safetyobligations, are likely to rise. In recent cases highlighted by the HSE, aninjury to a worker using an unguarded drill cost a small engineering company£45,000. The managing director was also prosecuted, and two employees were maderedundant to keep the company afloat. In the construction industry, meanwhile, accidents can account for 3 to 6per cent of total project costs. But as Meredith Tweedie, occupational health services consultancy managerwith AIG, points out: “An industry like construction is high risk, andwill obviously need support from health and safety. But what if you’re tryingto squeeze a six-foot worker into a cramped office? Health and safety must goright across the board.” There is also a growing moral imperative on corporates to become moreinvolved in their employees’ health, something that is reflected in theincreasing interest in OH measures from outside bodies. According to the HSC, reporting on health and safety by the FTSE 100companies increased from 47 per cent in 1995, to 60 per cent in 2001. Research carried out by Claros Consulting on behalf of HSC/HSE, highlightedthat accurate information about a company’s health and safety performance isbecoming more important to investors. And as Colin Grange, clinical director of Ceridian Centrefile, points out:”OH measures signal the culture of an organisation. Companies are makingmany more demands on employees – a good OH system will indicate that thecompany is willing to give something back.” – Archived articles from OH mag are available online at– OH jobs are available online at Comments are closed. Previous Article Next Article Related posts:No related photos.last_img read more