Poor health costs companies money — in direct medical costs, loss of work through absenteeism, and loss of productivity through presenteeism (where employees are present at work but too unhealthy to be productive). No matter what sector you operate in, and whether you run a large corporation or an SME, employee health represents a significant area of business risk and one that companies ignore at their own peril.
Alain Peddle, head of research and development at Discovery Health, points out that apart from the expenditure directly related to the illness or injury, the are a number of other costs that both the employee and the SME can incur. Consider the costs if one of your employees is constantly ill and does not have access to high quality medical care or suffers from a severe illness or disability, for instance.
They would carry the cost of loss of income or reduced working hours, modifications to living areas, modifications to transport and assistance with family responsibilities. Your business costs might include the salary of the ill employee, the cost of recruiting replacement staff, loss of productivity and the risk to key customer accounts.
The medical aid debate
There is currently much debate about whether companies should make some sort of medical cover mandatory for employees. As more companies adopted the cost-to-company salary package model, they left it up to employees to decide whether they wanted to spend money on medical insurance — and many employees elected not to, preferring to spend their money elsewhere. Doing so leaves both them and their companies exposed.
Employees who are not covered by medical aid are less likely to seek early medical intervention when they fall ill, risking severe illness that leads to more time off work and a decrease in productivity. In medical emergencies, their company is often the first place they turn to for a loan to cover unforeseen medical expenses which can run into hundreds of thousands of rands.
Such risks can be mitigated with the right kind of medical insurance. Blanket comprehensive cover is not necessarily required — medical aids offer a range of options suited to different risk profiles and companies can leave it up to employees to decide on the most suitable cover. At the very least, however, it’s probably a good idea for all employees to be on a hospital plan as this covers them for emergencies and those things that can incur the greatest costs.
Understanding employee health risk factors
Peddle comments that there is a large body of evidence to show that many health risks are modifiable. Many of the diseases that cost companies the most money are therefore preventable, provided companies can identify which employees are at risk for which diseases and implement programmes that actively lower this risk.
Working with world expert in corporate wellness, Ron Goetzel, from Emory University in the United States, Discovery Health published the first Healthy Company Index in South Africa. Top health risk factors in the South African population include high blood pressure, high cholesterol, excess body weight, low fruit and vegetable intake, diabetes, physical inactivity, and smoking tobacco. These are lifestyle factors that can, with the programme, be changed.
In a White Paper on Corporate Wellness, Discovery points out, “There is increasing evidence to suggest that nearly a quarter of all health care costs can be attributed to conditions directly resulting from easily modifiable lifestyle factors. In fact, the higher the health risk of individuals based on their lifestyle factors, the higher the health care costs.”
The benefit of workplace health programmes
A study by Ron Goetzel et al, published in the Journal of Occupational and Environmental Medicine, points out that although a good deal of emphasis has been placed on the management of acute and chronic disease as a way to contain employer health costs and limit employee absenteeism, there is growing recognition that promoting employee health may be a more efficient way to achieve cost savings.
This entails understanding the risk profile of employees and finding ways to actively reduce these. This is supported by additional research published in the same journal by Henke et al. The authors state: “Employers seeking to contain health and productivity costs are turning to workplace health promotion programmes to reduce the prevalence of risk factors among their workers.
Knowledge of the association between health risks and costs can help employers determine where to target workplace programmes and estimate cost savings resulting from interventions.” Such information can, the authors point out, help employees to calculate a potential return on investment before investing in any programmes.
Discovery’s White Paper provides evidence of the kind of return on investment employers can expect from such programmes. “A recent World Health Organisation Report cites research into the economic benefits of workplace health programmes observed over an average of 3,6 years. The research showed an average 27% reduction in sick leave absenteeism, 26% reduction in sick leave costs, and a 32% reduction in workers compensation and disability claims,” reports the paper.
Components of a successful workplace wellness programme
Discovery’s White Paper outlines the hallmarks of a successful employee workplace wellness programme. It should:
- Integrate health and productivity management programmes into the organisation’s operations
- Simultaneously address individual, environmental, policy and cultural factors affecting health and productivity
- Target several health issues
- Be tailored to address specific needs
- Attain high employee participation
- Include rigorous evaluation
- Communicate successful outcomes to key stakeholders.
The problem with presenteeism
You might look favourably on those employee ‘martyrs’ who come to work no matter how ill they are, but research shows that such presenteeism is a significant contributor to decreased productivity. The Institute of Risk Management in South Africa (IRMSA) reports that presenteeism is just one of several challenges facing South African companies under the increasing pressure of global competition.
“For workers, that pressure means they can feel they need to be present at work even if it’s unhealthy. In the US the cost of presenteeism is believed to equal the sum of absenteeism, injuries and health care costs. There is no reason to believe that South Africa is any better off,” reports IRMSA.
How to Take Risks That Win (Almost) Every Time
Knowing which risks to take, and how to take them, can be extremely helpful in stacking the odds in your favour.
Looking 13,000 feet down out of an airplane, parachute pack secured, your heart beating in your throat, must be one of the most terrifying experiences imaginable. Though not all risks are life-threatening, all risks are frightening. As humans, we’re constantly afraid of failure, of doing something wrong and of having to deal with the consequences. Yet, at the same time, there is nothing more rewarding than reaping the benefits of a risk gone right – of landing safely ground, to build the earlier metaphor.
For entrepreneurs, risk taking is a necessity of the job. After all, we’re never quite positive that things are going to work out the way we envision. We make choices daily which affect our business, and we can never be absolutely sure that we’re making the right ones.
Knowing which risks to take, and how to take them, can be extremely helpful in stacking the odds in your favour. While risks are unavoidable, approaching them strategically can be the best way to decrease your parachute’s chances of failing, so to speak, and to produce measurable results that you would never have achieved had you avoided the risk in the first place.
In order to hone your risk-taking skills, here are some guidelines:
1. Information is your friend
The more knowledge you have about any given topic, the less risky your endeavours will ultimately be. For example, many of the most steadily successful brokers on Wall Street are those who understand the patterns of the market better than anyone else. While there are always going to be those people who make millions off a risky uninformed bet, they are the same people who most likely will lose all their earnings on a single trade. Traders who build a sustainable career for themselves are the ones that have deep knowledge of the industry.
Similarly, you should be an expert in your field. You should know your industry well – your product or service you are providing. You should understand the buying patterns of consumers, their motivation and pain points. What drives them to buy your products? Where and when do they buy? What makes them stop buying?
As an entrepreneur – or in any profession that requires risks, really – you’ll want to have as much information as possible. The more you know, the fewer unknowns there are. The unknowns, ultimately, are what makes an action risky.
2. Assess the risk carefully
While risk is a reality of life, there is also something to be said for strong assessment skills. Being able to look at a risky situation and decide whether or not it’s worth taking is a hallmark of a good businessperson.
Venture capital investors, for example, spend their entire careers deciding which companies are worth risking time and money on. Those who throw their money around recklessly, while admirable for their risk-taking, are not necessarily the most successful investors.
Being a good risk-taker involves using the information you have to assess a situation and decide whether or not the risk is worth it.
3. Learn from failure
Appreciate that all risks are learning experiences. Especially those that don’t pan out.
On some accounts, failure is actually more valuable than success. While failures may not lead to an increase in your bottom line, you can use the opportunity to glean important information about what you’ve done wrong, where you misstepped and how you can move forward in the future.
The biggest mistake many people make is seeing failure as a measure of who they are, rather than a measure of where they can go. We’ve all heard that failure is feedback. Most successful entrepreneurs failed at many ventures before they created that million-dollar offering. Most overnight successes took many years to make. If you take a risk and fail, learn from it. Ask yourself what you can do differently next time, and then move on. The only failure is not learning the lesson that it provides and using it to hone your next endeavour.
According to Mark Zuckerberg, “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
Taking risks is the only way to go from here to there. Even failed risks move you closer to your goals if you can turn that failure into valuable learning and a plan for improve your results next time.
This article was originally posted here on Entrepreneur.com.
Are You Focusing Too Much On The Little Details (And Forgetting The Bigger Picture)?
To what degree do outside influences impact your business’s success? As a business owner, should you be focused on your business, or taking a macro view of the world?
Entrepreneurs live in the daily grind of their businesses. This is unavoidable but can often be fatal. Day to day we think that the little things matter more than the very big things do. A little thing like the floor of your office or store being mopped daily can become a huge issue if not done.
Sure, these things are important because they create a culture of care and pride, but what you might be missing while you watch your team mop the floors is the macro-economic climate shifts that happen more rapidly than you think.
Step back to move forward
Early in the life of a new business the only way to survive is for the founders to do absolutely everything. From designing a logo and launching a strategy all the way through to writing tweets and emailing customers when there are issues.
This makes sense when you’re building a business, your team is small and your cash is tight. However, as you grow, it becomes important to let your people do their best and take on the day to day work.
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As an obsessive entrepreneur it’s often hard to let go of these little details. Day to day operations will always be integral to the growth of your business and an important part of someone’s job in your organisation. However, it shouldn’t be yours if you are taking care of the big picture.
As the leader of your business you need to take a step back from the grind and look at the world around you.
To truly understand the positioning of your growing business you need to understand your country, continent and world.
You should understand the economic position you’re in as well as that of your province, country and even the markets that might directly influence your sales. Get a good understanding of the political stability of your country and the world.
Finally, you should figure out if there are any large- scale impending disasters. If disaster is imminent, like Zuma pillaging a nation and tanking an economy, then you have to get your head out of the floor mopping and into the high-level strategy of survival and preparation for disaster.
Move the needle
Every day there are 24 hours that you can fill. You can choose to work during that time and faff with the things that were once important, or you can figure out what is going to move the needle in your business.
What is going to really help you survive and grow in the years to come? Founders, CEOs and leaders need to be thinking about the next three, five and ten years. Let your team worry about today. Let the smart people you work with make today and tomorrow and next week work.
Chances are, the things you are doing in the hours/minutes aren’t saving your business or moving the needle. It’s the things that you plan for the next six months that affect the next five years.
Don’t live in a bubble
It’s easy to fall into the trap of thinking that you live in an isolated country or region that isn’t affected by world events. Unfortunately, no matter how hard you close your eyes and hide your head under the pillow you can’t avoid the fact that your business exists in a globally connected environment.
At Nic Harry we were affected by the Brexit events that unfolded in the UK and Europe. British shoppers were scared and didn’t spend their money when they were on holiday in Cape Town over the peak holiday season. I was so busy preparing for the seasonal uptick that I missed the link between a huge global event and my sales.
You live in a world that is filled with online shoppers and tourists who visit your business whether you know it or not. Prepare for the world to start having an effect on your business more and more.
Broaden your view
I am always fascinated by the narrow view of the world many entrepreneurs display. I may sell men’s socks, accessories and style but that doesn’t mean that the mining sector doesn’t affect my business.
Even if you were an entrepreneur building a business in Antarctica I would urge you to read about oil prices, political world events and the intricacies of overfishing in the South American seas. Being well rounded and having a broad view of the world and your business can only make you a more robust thinker who sees more angles to exploit, protect against and thrive on.
Why Adversity Is Actually The Best Thing For Your Business
There’s been a lot of talk about privilege lately: What is it? Who has it? Who doesn’t have it? I have a slightly different take on privilege and prefer to frame it as the privilege of adversity.
Studies across the globe show that the minorities in all contexts have higher rates of entrepreneurial activity than the incumbent majority. There are a host of reasons for this, but one of them is that adversity creates resilience and self-reliance that are vital for entrepreneurial success.
Every successful and exponentially successful entrepreneur that I have met or read about has transitioned through a baptism of fire. They have overcome insurmountable obstacles and used the lessons gifted through their experiences to rocket their business to the next level.
Related: Approach Adversity Head-On
The Five Gifts Of Adversity
A sense of where your true limits are. These are always far beyond what your belief system believed them to be. The experience of testing your limits breaks the preconceived notion of where your limits are or were.
Confidence. Once you have overcome an issue, the experience of overcoming it builds a high level of confidence that should the issue reoccur, you will have the ability and resources to overcome it. For example, if you lose your biggest client and manage to keep your business afloat, the next time you lose a big client you will not panic or become despondent, but will instead kick into action and claw your way out again.
Insight. Insight as to which of your non-financial resources you can tap into. When the chips are down and money is nowhere to be found, it’s amazing how many resources you will now perceive around you that can potentially help you transition to success. These resources come in the form of advice from friends, access to new markets through networks, credit from suppliers, and free promotion through networks, to name a few.
Your relationship with your own resourcefulness. The experience of not having resources but somehow manufacturing some out of thin air, recalibrates your sense of your own resourcefulness, which in turn builds a level of confidence that should you be dropped off in the middle of the desert with only a matchbox and a magnifying glass, you will survive.
Faith. A level of faith and a belief system that there is always a way to overcome a problem. This is true no matter how overwhelming the problem may be. The more you overcome impossible problems, the less you’ll believe in the existence of impossible problems.
So instead of worrying about who has privilege, who doesn’t, or what privilege actually is, use the lessons gifted to you when overcoming insurmountable obstacles to propel your business forward.
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