Building sustainable global strategy enables business efficiency

By Towers Watson

Around the world, employers are facing a litany of challenges relating to their employee benefits, from workers delaying retirement and growing health risks such as stress and chronic diseases to the rising cost of medical benefits. For multinational employers, managing these challenges takes on a greater level of complexity.

A global workforce health strategy can give multinational employers a greater level of consistency, flexibility and control over their local operations, and generally promote the health and wellness of the entire workforce. Ultimately, it can help manage spiraling medical costs, improve productivity and thereby have a positive impact on an organization’s bottom line.

What is global workforce health strategy?

A global strategy that offers guidance for local decisions gives multinational organizations flexibility to operate most efficiently in each country. Given the variety of health systems and market practices around the world, a global workforce health strategy will enable organizations to support workforce health, contribute to overall business objectives and provide benefits efficiently and cost-effectively.

Multinational organizations can use a global workforce health strategy to achieve a number of goals such as promoting the health and wellness of the entire workforce, demonstrating the organization’s interest in employees’ health and well-being, controlling costs and improving productivity, etc.

A closer look

According to Towers Watson’s survey results conducted in 2011 to identify the top challenges and multinational employers’ responses, 75 percent of respondents thought it would be more of a priority in 2011 and 2012, while 87 percent thought that it would be more of a priority from 2013 to 2015.

Despite this view, only about a third of the total respondents currently have a global workforce health strategy. Multinationals headquartered in Asia are less likely than those in other regions to have a global strategy and are less likely to be contemplating one, while those headquartered in the Americas are most likely to have a strategy in place or are considering adopting one in the next one to two years.

There are many factors influencing this growing spotlight on workforce health, and there is significant variation by region. In the Americas, the driving factor is to reduce or contain the organization’s health care costs. By contrast, many Asia-headquartered companies are looking for ways to differentiate their companies as a way to attract and retain top talent. Health programs, as part of a total rewards approach, are tools for doing that.

The research also found that many companies are found to be concerned about their health care costs, especially in China, the United Kingdom, and Singapore. In case of the United States, a huge number of companies are depending, to a moderate or large extent, on preventive services to rein in costs. Therefore, cutting administrative costs by consolidating plan vendors is a key activity for many employers’ U.S. operations.

As multinational companies expand their global operations, the need for a formal workforce health strategy is also growing. Multinationals with a clear strategy can better coordinate local health activities to improve their overall workforce health and increase the efficiency of total health spending.

These outcomes can be achieved through a holistic approach that includes collecting more complete employee population health data, managing the role of health benefits in overall reward programs and responding more effectively to external changes such as decreases in the quality or availability of government-sponsored health programs.

Regarding which health conditions cause the greatest concern, many companies say that mental health and stress issues are a priority for their global health strategy in all or most of the countries in which they have operations, followed by chronic diseases such as diabetes, hypertension and asthma.

Many companies say their greatest challenge lies in managing the mental health and stress issues of their workforce. These concerns are likely to remain as employees continue to feel the pressures of increased workloads, uncertain job security and retirement concerns. However, despite concerns about mental health and stress issues, not many multinationals have a mental health or stress management program in place.

Core of global health programs

Medical benefits and wellness programs form the basis of most respondents’ global health strategies, although there are some regional differences. Medical benefits of some kind are widely offered by respondents in all regions.

Wellness programs such as education, preventive care, and screenings are offered by most companies and have been growing in popularity. However, Asia-headquartered companies generally lag in incorporating wellness into employee benefit and total rewards programs. This may be due to the emerging nature of preventive care in the region.

Historically, Asian companies have adopted a piecemeal approach to workforce wellness, in some cases implementing a health risk assessment program but not following up with an overall strategy for assessment or sustainable improvement. Not surprisingly, these efforts have met with sporadic success. As multinationals in the region begin to lead the way by addressing health and well-being more holistically, it can be expected that other Asian companies will follow.

To get full value from health and wellness programs, multinational employers should clearly define the role of wellness, health and productivity programs so that they will play not only in their global health strategy, but also in their overall business strategy. If an organization is in an industry that competes for talent, for example, its approach to health ― especially in some regions ― could be a factor in attracting and retaining employees.

Some stumbling blocs

Multinationals without a global strategy say they are impeded by the lack of a strong business case, insufficient staffing, insufficient budget and an inadequate (decentralized) global organizational structure. They see some barriers to achieving those goals, including insufficient data on employee health risks, insufficient local resources and insufficient budget. Also, companies that have a health strategy are found to be not sharing it broadly with employees. Furthermore, in many companies, there is a lack of visible support among the senior leaders in the importance of a healthy work environment, which may create difficulty cultivating improved employee health throughout the organization, as well as the lack of a clear understanding of the importance of wellness in business growth and sustainability among employees.

This may result in further restrictions to access the resources and budget required. This puts local operations at the risk of navigating an uncoordinated and reactive health strategy.

View of near future

Over the next three years, employers say they expect the top four health and well-being priorities to be controlling health-related costs, addressing major health risks, using health programs to boost attraction/retention and motivating workers to improve their health.

Also, multinationals will rely increasingly on more global governance of their health care benefit programs. Data management, selection of insurers and third-party administrators, the use of health risk appraisals and the offering of prevention or wellness programs are areas most likely to come under some type of global governance at respondent organizations.

There will also likely be changes in the worldwide health landscape that will affect employers and their global health strategies. This would put more employees at risk and add additional cost to employer health plans in addition to affecting lost-time rates and, possibly, disability claims. These figures highlight even more sharply the focus employers will need to place on wellness programs and programs that manage employee mental and stress issues.

The aging population in many regions will also put additional stress on employer health costs and challenge employers to continue to provide adequate care. Diseases of aging, including heart disease, arthritis and dementia, will further add to the burden.

Finally, in many countries, the degree of support from public health systems for workforce health programs will come under increasing strain to provide the required treatment. The role of the private sector, and that of the employer, will be crucial to providing interventions and influencing workforce health outcomes.

Way forward: start with strategy

The challenges multinational employers face, both strategic and workforce-related, are likely to grow over the coming years as changes loom in the competitive global landscape. Putting a global workforce health strategy in place now can ensure that multinationals have the foundation to make the most of existing resources, attract and retain the needed talent, and optimize their benefits.

This article was provided by Towers Watson Korea.