Sanlam Corporate human capital executive Dr Matete Lerutla says debt is a lifestyle disease
While physiological and psychological wellness interventions are necessary, they do not foster holistic wellbeing when applied in isolation, says Sanlam Corporate HR executive Matete Lerutla.
Employee assistance programmes or wellness programmes have become prominent among South African employers. Diseases such as diabetes, pulmonary conditions, heart disease and psychological stresses are on the rise in younger people, with much of this being attributed to modifiable behaviour such as inactivity, smoking, poor nutrition, alcohol consumption and stressful life demands.
The impacts of these lifestyle diseases on individuals are material and include a decreased quality of life, disablement and premature death. As employers, we experience the financial overheads of increased absenteeism and presenteeism. Furthermore, costs of healthcare and group insurance are correlated with the increased prevalence of such illnesses. This places strain on the long term affordability of insurance cover for employees.
There are two general approaches to implementing wellness initiatives: Primary prevention and secondary prevention. Primary prevention is aimed at preventing the onset of the disease by impacting health related behaviours and risk factors. Secondary prevention attempts to diagnose and treat diseases at early stages before the onset of complications. The logic of wellness interventions is therefore based on influencing the behaviour of individuals to positively impact on their health, which has a range of mutually beneficial outcomes. A win-win-win for our employees, employers, and the wider economy.
Programmes typically consist of screening protocols, evaluations and proposals of preventative steps. Such steps may include the introduction of on-site clinics, diet and exercise plans, access to smoking cessation programs, alcohol rehabilitation programs, and so on. The key challenge is that the usage of such programs are limited, with fewer than 50 percent of employees participating on average. Of those identified for preventative interventions, fewer than 20 percent actually utilise the services offered. That said, the positive impact of wellness interventions is widely recognised.
Holistic wellbeing requires more effort
Studies have shown clinically meaningful and statistically significant changes in behaviours such as frequency of exercise, reduction in smoking and changes in diet as a direct result of wellness interventions. When converted into actual Rand returns, a return in cost savings from 2 to 6 times the investment made, was noted.
While the physiological and psychological interventions are necessary, they do not foster holistic wellbeing when applied in isolation. To this end, there is a need to broaden the scope of traditional wellness programmes to include financial resilience if we aim to unlock the full potential of a mature ecosystem of interventions. The American Psychological Association recognises financial stress as the leading cause of smoking, weight gain, alcohol and drug abuse among employees in the USA.
Forty-five percent of employees polled by PwC in the USA indicated that financial matters are their leading cause of stress – more than jobs, relationships and health combined. The Sanlam Benchmark research showed that 73 percent of respondents experienced financial stress, with more than half admitting that it negatively affects them at the workplace. Unsurprisingly, debt was identified as the key contributor to financial stress.
Debt is a lifestyle disease
This is of particular concern as debt has been shown to negatively affect both physical and mental health. Employees with debt have shown to experience a higher prevalence of illnesses such as: fatigue, high blood pressure, heart disease, restlessness, anxiety, depression, ulcers and helplessness, among others.
Evidently, debt is a lifestyle disease and so programmes aiming to deliver a holistic wellbeing must address debt in order to have a material impact through both primary and secondary preventative measures.
While health screening is fairly routine, screening for debt can be more difficult as it doesn’t always easily present itself. To this end, we have to consider various ways in order to identify in a sensitive manner, who within an employer is presenting risk factors that could indicate potential problems.
In a recent case study, Sanlam was approached by one of South Africa’s largest employers to combine actuarial, health and consulting expertise to identify the key health and financial correlations impacting absenteeism at the employer. The study identified correlations between financial circumstances, mental wellness, physical wellness and absenteeism. The insights shared helped the employer to identify potential risk factors that are indicative of an employee who is in debt and the extent to which financial indebtedness is correlated with the issues of absenteeism, mental health and physical health at this specific employer.
The long-term return on investment
When seeking to deliver total wellness outcomes, there are a few challenges to implementing successful interventions. These are that the utilisation of interventions is relatively low; interventions have to compete for employees’ share of attention and time; there are stigmas attached to mental health issues and debt and the initial funding costs of such interventions may not be budgeted for.
Given financial constraints to delivering holistic wellness, HR interventions need to have a distinct impact on financial outcomes over time and our research indicates that there are compelling returns on investment in total wellness ranging up to R6 for every rand spent. In the case study shared, it is anticipated that the employer would experience an annual saving of up to R20 million in the first year post implementation of a successful intervention based on our insights. In addition, there are providers, Sanlam included, that are able to fully fund such interventions at their own cost depending on the package of services sourced from the provider, due to the demonstrable positive impact that such interventions have on mortality, morbidity and health experience.
In closing, holistic wellness for companies should go beyond addressing physical and psychological factors. We need to consider a person and their behaviour in totality. Debt is a lifestyle disease brought about by behaviour patterns, it is the leading cause of financial stress in SA, it is prevalent at epidemic levels amongst employees across socio-economic, education and demographic bands, and it contributes significantly to physical and mental health problems.
If we want to help our employees to take control of their physical and mental wellbeing, we have to first empower them to move towards better financial behaviours. And this takes dealing intelligently with the big issue of debt. Looking at individuals through the lenses of physical, mental and financial wellness allows employers to provide integrated and holistic measures to improve total wellness outcomes.