Employee Health and Business Success. Making the Connections and Taking Action. Global Research Summary

Employee Health and Business Success Making the Connections and Taking Action Global Research Summary

More and more, organizations worldwide look to a healthy, engaged workforce as a key to improved organizational productivity and financial performance. And every year, more of these organizations take steps to develop and implement health and productivity programs that promote employee well-being.

Employee Health and Business Success Making the Connections and Taking Action: Summary of the Global Findings of the 2015/2016 Staying@Work Survey Table of Contents Executive Summary...2 Improving Health and Productivity: A Top Priority Around the Globe...5 Health and Productivity: A Multidimensional Issue...6 Using the Health and Productivity Strategy to Enhance the Employee Value Proposition...7 Shared Concerns Driving Employers...9 The Challenges: Inadequate Budgets and Weak Employee Health Engagement...12 Disconnect Between Employers and Employees...14 What Are Employers Doing to Strengthen Global Health and Productivity?...17 Are Employers Efforts Paying Off?...26 What Are the Best Doing Right?...27 Summary: Good Intentions, Formidable Obstacles, Notable Successes...30 1 Employee Health and Business Success

Executive Summary Interest in health and productivity is nearly universal. In our 2015/2016 Global Staying@Work Survey, nearly 90% of respondents say that improving workforce health and productivity is a core component of their organization s overall health strategy, and nearly all (98%) said they re committed to health and productivity improvement in the years ahead.* They believe these programs will reduce their employees health risks and improve their overall health and well-being, which in turn will lead to better business outcomes. But commitment to a concept and the implementation of a successful strategy are very different things, and our 2015/2016 survey results point to a wide gap between the two. Globally, 56% of employers have no health and productivity strategy and instead simply offer various health and wellbeing programs. This percentage has remained nearly the same since our last survey two years ago, despite the fact that 49% of respondents to our 2013/2014 survey expected to develop an articulated health and productivity strategy that differentiated them from competitors. In fact, in our latest survey, only 11% of respondents said they have an articulated health and productivity strategy in place, and only 26% have effectively communicated the value proposition behind their health and productivity strategy and delivered on its promises. What s more, there s greater opportunity for employers to boost employee participation in health and well-being programs. Half of employees participate in health risk assessments and use an onsite or near-site health clinic, and 62% participate in biometric screenings at work. Just 44% make use of onsite vaccination programs. When it comes to programs to support lifestyle changes (including coaching programs, weight management, tobacco cessation and stress management), participation numbers among at-risk employees drop off sharply, hovering between 10% and 20%. Employers believe these programs will reduce their employees health risks and improve their overall health and well-being, which in turn will lead to better business outcomes. Top priorities of employer s health and productivity programs are improving and maintaining workplace performance (74%), improving and maintaining workplace safety (73%), raising employee awareness of health and risks (69%) and developing a workplace culture of health (67%). The Employee Health Risk Problem Respondents say employee health risks especially lifestyle risks, such as stress, lack of physical exercise, obesity, poor nutrition and lack of sleep are among the foremost workplace issues they face. As in our survey of two years ago, stress remains the biggest employee health risk everywhere except Asia Pacific, where it ranks second. Lifestyle health risks, many of which are interconnected, can have profound and lasting negative effects on both individual and organizational performance. Employers that understand the health risks of their own employee population, and the underlying causes, are likely to have greater success forging a holistic health and productivity strategy with interconnected programs than are employers who take a scattershot approach by offering individual, disconnected programs. What Employers Want to Achieve Respondents are very clear about the goals they ve set for their health and well-being programs. Their top priorities are improving and maintaining workplace performance (74%), improving and maintaining workplace safety (73%), raising employee awareness of health and risks (69%) and developing a workplace culture of health (67%). Organizations that have well-defined, measurable goals for their health and productivity strategy, combined with a deep understanding of their employees health risks, are best positioned to develop targeted, coordinated strategies and programs. * Health and productivity includes the strategy, tactics and programs to improve both employee/family health and well-being, and the organization s workforce effectiveness; it s an all-encompassing term that moves beyond basic health insurance. 2 willistowerswatson.com

Defining Health and Well-Being While definitions and measures of health and wellbeing vary, throughout this report, well-being is defined as a concept that includes physical, financial and psychological health, as well as personal connection and belonging. It isn t merely the absence of disease or infirmity. Well-being is a broad, encompassing concept that takes into consideration the whole person. In simple terms, it describes someone who not only is in good physical health (body) but also judges life positively and feels good (mind). What s behind this disparity? In part, more than one-third of employees have sensitivities about their employer having access to their personal health information, and just as many don t trust their employer to be involved in their health and well-being. Instead, most employees (71%) prefer to manage their health on their own. Without a strategy that defines health and wellbeing program goals, uses data for decision making and program development, sets out a budget and takes employee preferences into account, it can be difficult for employers to get the necessary resources, obtain leadership support and engage employees. What s Keeping Health and Productivity Strategies From Being Successful? A number of factors are keeping employers health and well-being programs from being as successful as they could be. Primary among them are the lack of several necessary elements: adequate resources (budgets and staff) to support their programs, measurable return on investment, adequate employee engagement and data to support targeted outreach. Also on the list is a lack of senior leadership support. Interestingly, only 23% of respondents cited the lack of an overall strategy as an issue, yet in our experience, this is often a core reason for the lack of success. Without a strategy that defines health and well-being program goals, uses data for decision making and program development, sets out a budget and takes employee preferences into account, it can be difficult for employers to get the necessary resources, obtain leadership support and engage employees. Disconnect Between Employers and Employees Ultimately, the success of the health and well-being program depends on the ability of employers to connect with employees around issues that have long been personal to workers and their families. The good news is that Willis Towers Watson s most recent Global Benefits Attitudes Survey found that two-thirds of employees around the world generally believe their employer has an active role to play in this area. However, despite significant investments, less than one-third credit their employer with helping them lead healthier lives. The gap between employer and employee views on health is most apparent when it comes to identifying the sources of stress. Employers highlight work/life balance issues, but employees are focused on four far different areas: adequate pay, the right resources to do their work, a clear understanding of priorities and a work environment that allows them to be effective. When employers don t recognize the stressors employees face, employees are more likely to tune out, and the risk of turnover and low performance increases. Clearly, in order to convince employees that they have their health and well-being interests at heart, employers must build trust. Do Financial Incentives Boost Employee Engagement? Interestingly, employers that offer financial incentives to participate in programs (primarily those in the U.S.) are meeting with mixed success. In exchange for incentives, employees are willing to complete fairly simple, one-time activities such as a health assessment, but they re far less willing to complete more difficult, longer-term activities such as a weight-reduction program. The bottom line on incentives: More than two-thirds of companies globally and nine in 10 U.S. companies that offer them plan to reassess their incentive designs in the next three years. 3 Employee Health and Business Success

About the Survey For nearly two decades, Willis Towers Watson has conducted Staying@Work research in North America. Our 2013 Staying@Work Survey was our first that included employers in Asia, Europe and Latin America. The 2015/2016 Employer survey, our second global study of employers health and productivity strategies, involved 34 markets, including the Middle East. Conducted between May and July 2015 in 34 markets around the world 1,669 employers surveyed Respondents: Asia Pacific: 582 respondents in 13 countries Europe: 247 respondents in 14 countries, including 24 respondents from the Gulf Cooperation Countries Latin America: 242 respondents in five countries North America: 598 respondents in Canada and the U.S. Respondents are responsible for the health and wellbeing programs in their respective countries (i.e., local market survey) All major industry segments represented 34% of participating employers have more than 10,000 full-time workers 73% of participating employers have workforces dispersed across multiple countries 42 multinational companies provided additional details from a headquarters perspective about the global management of their health and productivity strategy Concurrent with our Staying@Work Survey, we conducted our second Global Benefits Attitudes Survey, through which we collected responses from nearly 30,000 employees Employee in 19 countries. The biennial Global Benefits Attitudes Survey explores employees attitudes on a broad range of factors concerning their benefits, health-related behaviors, current and prospective financial situations, and work experience. How High-Performing Companies Succeed A subset of respondents fall into a group we ve identified as high performers with regard to their health and productivity strategy and results. Based on respondents selfevaluations of their programs effectiveness, we ranked their performance according to our Overall Health and Productivity Effectiveness (OHPE) metric. Using respondents scores, we divided them into three equal-sized groups. We found that the group with the highest OHPE scores (high performers) take a different approach and more effectively execute on their health and productivity strategy than the other groups do, and their programs are more successful. Our research shows that high performers: Offer prevention programs aimed at keeping employees healthy Provide personal support to employees with specific health needs Build and sustain a culture of health at the workplace Align their health and productivity strategy with their employee value proposition (EVP) Provide a range of program choices informed by regular evaluation of the programs effectiveness Use the latest technology (including wearables and apps) Target communication to reach employees in ways they prefer In short, offering disconnected programs based on cost or longevity is not a path to success. Instead, employers need to take a coordinated approach based on a clearly communicated strategy that helps employees understand the benefits of participation to both themselves and the company, and uses a variety of approaches to encourage engagement. To a great extent, the success of health and well-being programs depends on employers ability to engage employees in these initiatives. That s why employee attitudes hold important clues for getting the best return on health and productivity investments. Throughout this report, we complement the emerging trends in employer activities by presenting the voice of the employee to help employers understand the critical success factors as they develop and build upon their health and productivity strategy. 4 willistowerswatson.com

Improving Health and Productivity: A Top Priority Around the Globe Over the last decade, the global economy has experienced one of the longest productivity slowdowns on record. Weak productivity growth measured as output per worker is a problem everywhere, affecting both developed and emerging economies alike and increasingly identified as a global crisis.* At the organizational level, reversing this problem to deliver productivity growth is the key to boosting the bottom line; in its absence, cost cutting is the only way for companies to remain profitable. At the same time, an increase in preventable chronic disease is posing a significant problem for employers. In many countries, this translates into rising health care costs. And while the scale of the issue may be greatest in the U.S., the challenges are growing across the globe.** In addition, as rising health benefit costs squeeze merit bonus pools, it s becoming more difficult for employers in markets where health care costs are highest to appropriately reward topperforming and critical-skill workers, which makes boosting productivity even more challenging. Against this backdrop, it s not surprising that addressing health-related issues and their effects on the workforce has become a global priority for employers, and that many organizations are making significant investments in health and well-being programs. As in 2013, almost 90% of the 2015/2016 survey respondents said improving workforce health and productivity is a core component of their organization s overall health strategy (Figure 1). And nearly all (98%) of the 2015/2016 survey respondents revealed an unwavering commitment to health and productivity improvement in the years ahead. The success of any organization s health and well-being program hinges on the employer s ability to engage employees in attaining and maintaining good health. The good news: Employees share employers enthusiasm about health improvement. Our 2015/2016 Global Benefits Attitudes Survey found that for 65% of employees, their health is a top priority. These results are remarkably consistent worldwide (Figure 2). ** For more discussion, see The Future of Benefits: Disruptors, Talent Shifts and a Coming Transformation, Willis Towers Watson, 2015. ** See Willis Towers Watson s 2014 Global Medical Trends Survey. Figure 1. Health and productivity is a top priority for organizations globally 0% 20% 40% 60% 80% 100% Global U.S. Canada Europe Latin America Asia Pacific It is essential to our organizational health strategy 50 37 48 36 46 36 48 41 47 34 53 37 It plays a moderate role in our organizational health strategy Figure 2. A majority of employees report managing their health as a top priority 0% 20% 40% 60% 80% 100% Global U.S. Canada Europe Employee Perspective Latin America Asia Pacific 60 65 64 66 67 71 Source: 2015/2016 Global Benefits Attitudes Survey Note: Percentage of respondents indicating agree or strongly agree on a five-point agreement scale. Sample: U.S., Canada full-time employees with employer-based health care; other countries all respondents 5 Employee Health and Business Success

Figure 3. Workplace performance and safety are top priorities of health and productivity programs 0% 20% 40% 60% 80% Improve/Maintain workplace performance Improve/Maintain workplace safety Improve employee awareness of health and risks Develop a workplace culture where employees are responsible for their health and understand its importance Improve the emotional/mental health of employees 65 Improve the physical health of employees Improve employee engagement in the health and well-being program Make manager awareness and behavior a part of the workplace health strategy Incorporate workforce well-being as a key attraction and retention strategy Better understand the cost drivers linking health to absence and productivity Manage the rising cost of the health care program 43 45 Incorporate emerging technologies as a way to deliver key messages and information to employees about health and well-being 55 65 64 Note: Percentages reflect 4/5 on a five-point extent scale. 41 51 67 69 74 73 Health and Productivity: A Multidimensional Issue Many employers see their health and well-being programs as vital tools for addressing a broad set of health and productivity challenges (Figure 3).* When asked about the top priorities of their health and productivity strategy, respondents didn t coalesce around any single theme. Instead, they identified multiple priorities as being important to health and productivity success. The top three priorities of employers worldwide are boosting productivity, improving employee safety, and increasing employees awareness of both their health status (physical and emotional) and their health-related risks. For many employers, simply educating workers about the near- and long-term consequences of their lifestyle can help the organization tackle the problem of insufficient employee engagement. Also, in every world region, organizations are using their health and productivity strategy to create a work environment that addresses the wide range of employee needs and preferences, hence building a workplace culture that encourages healthy behaviors. For many employers, simply educating workers about the near- and long-term consequences of their lifestyle can help the organization tackle the problem of insufficient employee engagement. * Willis Towers Watson research has found strong links among employee health improvement, reductions in absenteeism, drops in benefit costs, and improvement in employee engagement and workforce effectiveness. See Health and Well-Being in the Workplace: The Engagement Challenge, Jonathan Gardner and Steve Nyce, Willis Towers Watson, December 2015. 6 willistowerswatson.com

Using the Health and Productivity Strategy to Enhance the Employee Value Proposition Most organizations don t have an articulated health and productivity strategy. With surprising consistency, over half of the survey respondents in all regions offer various health and well-being programs but don t have a formal strategy that they ve aligned with business priorities and explained to the workforce. Even so, there are signs of progress in this area: Roughly 10% to 15% have an articulated strategy; another 15% to 20% have communicated and delivered on their strategy s goals, and 10% or less use their health and productivity strategy to differentiate their organization in the competition for talent. Just as employers are at varied points along the health and productivity strategy path, their next steps on the journey will likely differ. But there s widespread agreement among organizations about the need to step up their efforts and adopt a strategy that will deliver crucial organizational benefits, link to the EVP and motivate employees to join and stay with the organization. Across all markets, an impressive 88% of employers are planning to have a strategy in place in the next three years up from 37% today (Figure 4). And roughly two in five plan to customize their health and wellbeing programs for critical workforce segments to help them attract and retain key talent. That will be an increase of 30 to 40 percentage points by 2018. The findings of our 2013 survey were similar: Most employers didn t have a strategy in 2013 but did have very strong intentions about adopting, communicating and delivering on a formal health and productivity strategy in the near future. Does the failure of many organizations to do so by 2015 suggest a lack of commitment to health and productivity improvement? No. Rather, it reflects the fact that building a health and productivity strategy takes considerable effort and organizational resolve. Setting objectives that resonate with employees and then delivering on the strategy s promises is a journey, not a race. While employers may not have progressed as quickly as they d intended, our 2015/2016 survey results show that organizations worldwide are consistent in their determination to use their health and productivity strategy as a key differentiator. Figure 4. Employers are taking the next step in making health and employee effectiveness a key competitive advantage No strategy Offered various programs but have not articulated a health and productivity strategy Adopt strategy Articulated a health and productivity strategy with stated objectives and goals for each program Communicate and deliver Effectively communicated the value proposition behind the health and well-being program and delivered on its promises Differentiate health and productivity strategy Customized the strategy for critical workforce segments and used organizational analytics to test program effectiveness Reduce emphasis Reducing our focus on health and productivity Today In 2018 Today In 2018 Today In 2018 Today In 2018 Today In 2018 Global 56% 8% 11% 16% 16% 29% 10% 43% 7% 4% U.S. 51% 4% 10% 7% 22% 29% 12% 54% 5% 5% Canada 60% 8% 16% 18% 17% 23% 4% 48% 3% 3% Europe 60% 6% 9% 19% 17% 30% 10% 42% 4% 2% Latin America 51% 5% 10% 19% 14% 25% 13% 46% 13% 6% Asia Pacific 57% 13% 14% 20% 12% 28% 7% 35% 10% 4% 7 Employee Health and Business Success

Health and Well-Being Global Strategy, Local Execution While workforce health is a growing priority for companies worldwide, results show that many organizations are still in the process of developing a formal health and productivity strategy. Multinational organizations have the additional challenge of considering how to connect the health and well-being programs in each of the markets in which they operate. This is increasingly important, as many organizations have linked or are planning to link their health and well-being strategy to their broader corporate objectives and goals, and to use their program to differentiate the EVP they re trying to create. For many multinational organizations, the process starts with the goal of creating global consistency in their health and well-being programs, regardless of where the headquarters are located. Yet today, just one-third of organizations with operations in multiple countries have a global health and productivity strategy, and most rely on regional or local strategies (Figure 5). Even so, large multinational organizations are out in front: Today, more than half of these companies have a global strategy. To help ensure global consistency in their programs, global or regional headquarters for many companies have established specific health and well-being sitecertification requirements that local markets must meet. These can include requirements to offer programs that address specific health risks or chronic conditions, switch to healthier food options onsite, measure employee satisfaction, track specific metrics for safety or health-related absences, or have local health champions. Today, 25% of multinational companies have specific site-certification requirements in place, and another 35% plan to adopt them by 2018. Once a global strategy is in place, success hinges on whether the overall health and productivity strategy allows for local flexibility, and fosters local management and employee engagement. Organizations that account for unique distinctions in local cultures, languages and health care systems have the best chance to both increase program appeal and build employee trust around the very personal issue of health both of which are key to boosting engagement rates. As Figure 6 shows, most employers rely on local resources for vendor selection, communication, program evaluation, and other elements of the administration and operation of their health and well-being programs, and 87% set their global strategy at headquarters. Figure 5. One-third of organizations with operations in multiple countries have a global health and productivity strategy Organizations with operations in multiple countries Less than 25,000 employees globally More than 25,000 employees globally No global, regional or local strategies are in place Only local strategies (no global or regional strategies) are in place A regional strategy (no global strategy) is in place A global strategy has been in place for fewer than five years A global strategy has been in place for five or more years 18% 36% 11% 19% 16% 10% 23% 11% 24% 32% Figure 6. Most organizations set their strategy centrally but rely on local execution Establishing country priorities Selecting the well-being programs to implement Continually managing wellbeing programs, vendors and communication Funding well-being programs Selecting well-being vendors Managing data and evaluating programs Selecting brokers/ consultants Setting overall strategy Centrally 28% 33% 23% 34% 27% 33% 34% 87% Regionally 38% 30% 22% 18% 26% 28% 25% 17% Locally 54% 64% 77% 70% 69% 65% 58% 16% Note: Based on organizations operating in multiple countries 8 willistowerswatson.com

Shared Concerns Driving Employers To design an effective health and productivity strategy and create a suite of health and well-being programs that will reduce absence rates, boost engagement and improve productivity, employers must first understand underlying workforce issues. Though these vary from one organization to the next depending on employee populations, many employers see similar causes of their biggest workforce challenges. The common elements are stress, insufficient physical activity, obesity and poor nutrition (Figure 7). Employers worldwide see stress as the foremost workplace issue, with the exception of those in Asia Pacific, who rank it second. Insufficient physical activity and obesity are ranked the next highest in almost every market, with sedentary lifestyles the top concern in Asia Pacific. This is likely tied to the fact that employers understand the connections among obesity, lack of exercise and the rates of diabetes in countries like China, where the disease has reached epidemic levels.* ** Employers in all regions identify poor nutrition as an issue, except in Asia Pacific (which is surprising given the rate of hyperglycemia in the region). Employers in Europe and Latin America identify presenteeism*** as a prominent issue, reflecting concerns about workforce productivity in those markets. Many of these risk factors, including the foremost issue of stress, were identified by employers as significant issues in our 2013 study, which shows why employers must remain committed to addressing them. It s also important for employers to recognize that many of these issues are interconnected. For example, research shows that insufficient physical activity, poor nutrition and inadequate sleep are strongly linked with obesity and stress, both of which negatively affect employee performance. This linkage is why employers efforts to address issues singularly could fail to improve employee s health and well-being, and why tackling one issue at a time can create difficulties. To alleviate employee stress, for example, employers must first understand its primary sources and the ways in which employees prefer to cope with it. There s considerable misalignment between employers views on the leading causes of workplace stress and the views of employees themselves (see Sources of Employee Stress, page 10). Figure 7. Stress and sedentary lifestyles are the top workforce risk factors globally Rank Global U.S. Canada Europe Latin America Asia Pacific 1 Stress 64% Stress 75% Stress 85% Stress 74% Stress 72% Lack of physical activity 52% 2 Lack of physical activity 53% Overweight/ Obesity 70% Lack of physical activity 46% Lack of physical activity 45% Lack of physical activity 58% Stress 44% 3 Overweight/ Obesity 45% Lack of physical activity 61% Unplanned absences 45% Presenteeism 33% Overweight/ Obesity 47% Overweight/ Obesity 32% 4 Poor nutrition 31% Poor nutrition 50% Overweight/ Obesity 43% Overweight/ Obesity 32% Presenteeism 40% Lack of sleep 30% 5 Lack of sleep 30% Lack of sleep 31% Poor nutrition 41% Poor nutrition 31% Poor nutrition 36% Presenteeism 23% Note: Percentages reflect to a great extent a 5, 6 or 7 on a seven-point extent scale. * Yu Xu, Limin Wang, Jiang He, et al., Prevalence and Control of Diabetes in Chinese Adults, JAMA, 2013; 310(9): 948 59 ** Chan J.C., Malik V., Jia W., et al., Diabetes in Asia: Epidemiology, Risk Factors and Pathophysiology, JAMA, 2009; 301(20): 2129 2140 *** Presenteeism is when an employee is physically at work but not fully productive due to physical or mental health conditions, or to stress due to job-related, personal or financial matters. 9 Employee Health and Business Success

Sources of Employee Stress: Closing the Understanding Gap By comparing employers responses to our Staying@Work Survey with employees responses to our Global Benefits Attitudes Survey, we find marked differences of opinion on the primary causes of work-related stress (Figure 8). For example, employees top cause of stress low pay is mis-ranked by employers as only number 11 on the list of stressors for workers. Clearly, a number of employees are dealing with financial challenges that their employers might be able to help them address with means that go beyond increases in pay (see Employees Financial Well-Being, page 20). A number of employees are dealing with financial challenges that their employers might be able to help them address with means that go beyond increases in pay. Employee Perspective Figure 8. Employers and employees not aligned on causes of stress Employee View Support me Pay me Guide me Employer View Employee View* Lack of work/life balance (excessive workloads and/or long hours) 1 5 Inadequate staffing (lack of support, uneven workload or performance in group) 2 2 Technologies that expand availability during nonworking hours (e.g., mobiles, notebooks) 3 13 Unclear or conflicting job expectations 4 3 Excessive amount of change at my employer 5 6 Lack of manager support and feedback 6 7 Low level of control over my job 7 10 Concerns about my personal financial situation 8 8 Concerns about job loss 9 11 Company culture 10 4 Low pay or low increases in pay 11 1 Lack of technology, equipment and tools to do the job 12 12 Concerns about benefit reduction/loss 13 9 Unfriendly or unsafe work environment 14 14 * Source: 2015/2016 Global Benefits Attitudes Survey Note: Percentage of respondents indicating agree or strongly agree on a five-point agreement scale. Sample: U.S., Canada full-time employees with employer-based health care; other countries all respondents 10 willistowerswatson.com

Conversely, employers incorrectly rank a lack of work/ life balance as the leading source of workplace stress; employees say it s actually fifth on the list of stressors. Also, employers underappreciate the stress caused by a poor company culture that lacks teamwork and accountability, and they overestimate the impact of technologies that expand employees availability during nonworking hours. Such disparities hamper employers ability to mitigate the causes of workplace stress and to educate employees on the best ways to manage stress and improve resilience. Employers must make efforts to understand the primary causes of employees stress whether they re elements of the workplace or personal factors such as financial problems and to develop a strategy for addressing the specific, employee-identified issues. It s important for employers to: Ensure leaders at all levels know how to recognize employee stress. Help managers understand what s causing their team members stress. Listen to employees to learn how they re coping with stress and how management can help. Adjust the organization s workforce programs in light of those findings. Ensure the employment deal includes elements that support effective stress management. When employers understand employees needs, they can create the programs that will engage employees and improve their health and well-being. An employee assistance program (EAP) can be a valuable tool for alleviating stress, but it s offered by fewer than half of companies outside North America (Figure 14, page 17). However, reducing stressors and helping employees manage stress is about much more than offering an EAP. By understanding employees challenges, employers can build trust with employees on personal health issues. When they understand employees needs, they can create the programs that will engage employees and improve their health and well-being. This involves looking at the entire employee experience and finding opportunities to make changes likely to have a positive impact. Such efforts can pay off in the form of stronger employee engagement as well as less stressrelated illness, absenteeism and presenteeism. It can also improve retention. Employers that participated in our 2014 Global Talent Management and Rewards Study said helping employees manage stress is one of the top five ways they can strengthen their retention program. 11 Employee Health and Business Success

The Challenges: Inadequate Budgets and Weak Employee Health Engagement Unfortunately, a number of obstacles stand in the way of health and well-being program success (Figure 9). Globally, the most significant are: Inadequate budgets Insufficient evidence to build a case for health and productivity investment A lack of employee engagement in well-being programs Respondents to our 2013 survey identified both inadequate budgets and the lack of employee engagement as top challenges then, too. But today, the dearth of resources (budget and staff) is an even bigger issue; approximately two out of five employers see inadequate resources as the leading obstacle to health and productivity improvement, with the exception of those in North America. And only about two in five employers have sufficient budget to add new health and well-being programs that are critical for targeted populations or to adopt new technologies. Conversely, one-third have insufficient budget to even deliver on their existing programs. Low program participation rates are troubling for employers, particularly those in the U.S., who ve seen poor participation as the top barrier to health and productivity improvement for more than a decade. Conversely, participation rates in Latin America and Asia Pacific are quite a bit higher than in Figure 9. Lack of budget, ROI and employee engagement are top obstacles to changing employee behavior related to health and well-being Lack of adequate budget/staff to support effective health management programs Lack of evidence of appreciable financial returns and which practices work best Lack of employee engagement (e.g., low participation or interest in programs) Lack of actionable data to support targeted outreach (e.g., geographical) Global U.S. Canada Europe Latin America Asia Pacific 39% 33% 34% 41% 45% 41% 36% 34% 32% 33% 42% 37% 34% 43% 28% 26% 33% 31% 28% 21% 27% 34% 24% 32% Lack of organizational structure to support programs 28% 25% 25% 35% 30% 24% Lack of senior leadership or manager support (e.g., lack of communication or flexibility for employees) Insufficient financial incentives to encourage participation in programs Fragmented or disjointed delivery of health and wellbeing programs Lack of overarching strategy for investing in employee well-being Regulatory limitations and uncertainty about employer-sponsored activities 28% 23% 25% 32% 33% 28% 27% 23% 30% 24% 36% 30% 27% 25% 33% 37% 33% 20% 23% 19% 29% 28% 27% 21% 14% 13% 5% 15% 16% 14% Overly complex health and well-being programs 12% 13% 3% 9% 11% 13% Note: Percentages reflect to a great extent a 4 or 5 on a five-point extent scale. 12 willistowerswatson.com

Figure 10. One in five organizations globally has a strategy that supports multiyear evaluation of their health and well-being programs Have a strategy that supports multiyear evaluation of our health and well-being program Use clinical-level medical claim data/benchmarking information to inform decisions or changes to our health and well-being programs Measure active participation or active engagement by employees/spouses in our health and well-being programs Share health and well-being program performance metrics with C-suite or regional management on a regular basis Use data to identify specific individuals or subgroups for targeted outreach on relevant health and well-being program(s) Use a variety of financial and nonfinancial metrics to measure the impact of our health and well-being programs (i.e., value-on-investment approach) Measure demonstrated impact of our health and well-being programs on health risks Use ROI measures to measure the impact of our health and well-being programs Measure the demonstrated impact of our health and well-being programs on health care costs Measure the demonstrated impact of our health and well-being programs on employee productivity (e.g., lost time, employee work engagement) Global U.S. Canada Europe Latin America Asia Pacific 22% 39% 17% 13% 21% 13% 31% 55% 38% 15% 39% 16% 28% 51% 28% 19% 30% 13% 26% 48% 22% 16% 24% 14% 23% 43% 21% 16% 31% 10% 13% 25% 8% 8% 16% 5% 12% 35% 15% 14% 27% 7% 11% 24% 7% 6% 11% 4% 11% 35% 15% 10% 29% 9% 11% 14% 13% 9% 18% 8% Note: Percentages reflect 4/5 on a five-point extent scale. the U.S., especially for worksite programs. Yet, no market has done more to boost employee health engagement than the U.S., where employers use personalized communication, technology-enabled tools, and a combination of financial rewards for participation and penalties for nonparticipation. Despite these initiatives, weak employee interest in health and well-being programs continues to hamper U.S. employers efforts to help workers adopt healthier lifestyles. Another significant roadblock cited by 36% of employers: a lack of quantitative evidence of whether health and wellbeing programs are actually improving employee health and productivity. In the U.S., where employers have access to considerable amounts of data, the use of metrics and data to assess health and well-being programs is only now beginning to take hold. After decades of effort to provide programs enabled by new technologies, the emergence of sophisticated databases is helping U.S. employers build and strengthen the evidence about what s having the biggest impact. Above all, employers in all world regions struggle to provide such evidence in the absence of multiyear assessment plans. Only one in five surveyed employers has an articulated measurement strategy. Few markets report heavy use of data and metrics for other purposes, such as evaluating employee awareness and engagement, identifying individuals for outreach and assessing the overall performance of health and well-being programs. For example, only one in 10 employers measures the impact of health and well-being programs on costs, employees health risks or employee productivity (Figure 10). One exception is the U.S., where employers rely on data and metrics to evaluate the impact of their health and well-being programs. In addition, quite a lot of measurement activity takes place in Latin America, where medical claim data are available in many markets. But without an assessment strategy, employers are ambiguous about what to measure and tend to have fragmented programs that might not complement each other. Also, senior leaders are reluctant to allocate more funds. In all, it s difficult to make a case for expanding health and well-being initiatives or launching new ones, and this difficulty reduces organizations chances of creating effective programs. 13 Employee Health and Business Success

Disconnect Between Employers and Employees Clearly, organizations have made employee health and wellbeing a priority, and many have made significant investments in their programs. As previously described, budgets are certainly tight. And for many employers, the resource issue limits their ability to enhance their well-being initiatives. But an effective health and productivity strategy is about more than offering programs. Ultimately, success hinges on whether employers can motivate their employees to live healthier lifestyles by actively participating in the company s health and well-being initiatives or taking steps on their own. The good news is that employees generally agree that their employers have a role to play in encouraging them to live healthier lifestyles. Two-thirds of employees think their employer should take an active role, and fewer than one in five believe their employer shouldn t be involved in their health (Figure 11). The positive attitude is strongest in Latin America, where three in four employees are comfortable with employer involvement in their health-related behavior. The strongest opposition to such involvement is in Europe, where nearly one in four employees is resistant. Yet, the positive attitudes about employers taking an active role are higher today than in 2013 in every region, including Europe. Ultimately, success hinges on whether employers can motivate their employees to live healthier lifestyles by actively participating in the company s health and well-being initiatives or taking steps on their own. While many employers have drawn a clear path for engaging their employees in building and maintaining good health, many others have yet to sufficiently motivate employees. Many employees don t yet recognize their employer s efforts, and relatively few credit their employer with helping them lead healthier lifestyles (Figure 12). In the U.S. and Latin America, only one-third (33%) of surveyed workers give their employers that credit, and it s only one-quarter (25%) in Canada. The percentage is a bit higher in Asia Pacific (36%), though it s less than one in five (19%) in Europe. Employee Perspective Figure 11. Most employees say their employer has a role in encouraging healthy lifestyles Option A: Employers should take an active role in encouraging their employees to live healthy lifestyles Option B: It is not the role of an employer to encourage their employees to live healthy lifestyles Strongly prefer Prefer Slightly prefer Neutral Slightly prefer Prefer Strongly prefer Global U.S. Canada Europe Latin America Asia Pacific 66 18 17 65 19 16 65 19 16 54 22 23 74 13 13 70 16 14 Source: 2015/2016 Global Benefits Attitudes Survey Sample: U.S., Canada full-time employees with employer-based health care; other countries all respondents 14 willistowerswatson.com

Employee Perspective Figure 12. Few employees say that the well-being initiatives offered by their employer have encouraged them to live a healthier lifestyle Canada 25% Europe 19% U.S. 33% Latin America 33% Asia Pacific 36% Source: 2015/2016 Global Benefits Attitudes Survey Sample: U.S., Canada full-time employees with employerbased health care; other countries all respondents Note: Percentage of employees indicating agree or strongly agree on a five-point agreement scale. 2013 2015 Change Global 32% 31% 1 U.S. 34% 33% 1 Canada 27% 25% 2 Europe 16% 19% +3 Latin America 39% 33% 6 Asia Pacific 35% 36% +1 Furthermore, Figure 13, page 16, shows that when it comes to managing their health and well-being, roughly three-quarters of employees prefer to do it on their own. Only in Latin America is that feeling slightly less prevalent: 59% of employees in Latin America prefer to be self-reliant concerning their health still a majority of surveyed employees in the region. This suggests that either employers have yet to make a convincing enough case for employees to participate in company-sponsored initiatives or that there are other barriers that employers need to recognize and overcome. This is leading many managers with global responsibility for health and well-being programs to ask themselves why employees aren t responding. While there are many possible explanations, one is that many employees are highly sensitive to their employer having access to their personal, health-related information. This is particularly true in North America and Europe, where roughly half of employees don t want their employer to have access to such information. Workers in Latin America and Asia Pacific are generally more comfortable sharing this information with their employer. And while the majority accept their employer s involvement in their health, there are pockets of mistrust that could be disruptive if not addressed. Nearly one-third of employees worldwide say they don t trust their employer getting involved in their health and well-being. 15 Employee Health and Business Success

Employee Perspective Figure 13. Sensitivities around personal health data impede engagement in well-being activities Global U.S. Canada Europe Latin America Asia Pacific I prefer to manage my health on my own 71% 71% 76% 73% 59% 72% I don t want my employer to have access to my personal health information 39% 46% 52% 48% 28% 34% The initiatives offered by my employer do not meet my needs I don t trust my employer to be involved in my health and well-being I am not sure about the activities provided by my employer or how to sign up My manager is not/would not be supportive of my participation 34% 32% 38% 38% 40% 32% 31% 30% 36% 36% 29% 31% 26% 19% 24% 30% 29% 29% 23% 14% 20% 28% 30% 26% Source: 2015/2016 Global Benefits Attitudes Survey Sample: U.S., Canada full-time employees with employer-based health care; other countries all respondents Note: Percentage of respondents indicating agree or strongly agree on a five-point agreement scale. Despite the sensitivities, many employers have raised employees awareness about their programs, and few employees say their manager is a barrier to their participation. Even so, employees may be suffering from information overload in some markets. For example, many U.S. employers have made significant investments and offer a vast portfolio of health and well-being programs through a variety of providers and vendors. In these cases, too much information competing for employees attention could be drowning out important messages. Employers clearly need to build employees trust in areas pertaining to health, especially the use of employees personal data, so that workers will begin to see their employer as a go-to resource for improving their health and well-being. For some employees, improving their health and well-being may always be strictly a personal pursuit. In these cases, employers can play a pivotal role by creating a workplace environment that supports these employees as they tackle health issues on their own. 16 willistowerswatson.com

What Are Employers Doing to Strengthen Global Health and Productivity? Program Offerings Most organizations offer a range of health and well-being programs, with the most common focused on prevention, particularly screening activities and programs related to staying well at work. Not surprisingly, U.S. employers lead the way with such worksite programs. But biometric screenings are also widely available in other regions, particularly Asia Pacific. Many employers in Europe, Canada and Latin America offer vaccinations at worksites. Worksite activities related to diet and exercise have become increasingly popular worldwide over the last few years, with between one-half and three-quarters of respondents offering these programs. Onsite clinics that include medical services with a doctor or nurse onsite are widespread in Europe and Latin America, partly because they re compulsory in some countries (Figure 14). In general, the success of worksite programs depends on having a critical mass in a location; the more widespread an organization s operations, the more difficult it is to implement onsite programs, especially in locations with few employees. Figure 14. Employers offer an array of health and well-being programs Global U.S. Canada Europe Latin America Asia Pacific Worksite well-being activities and screenings Worksite biometric screening 68% 73% 39% 53% 68% 75% Onsite vaccinations 66% 88% 76% 62% 78% 48% Worksite diet/exercise activities 65% 77% 72% 61% 53% 59% Health risk assessment/appraisal 60% 85% 54% 58% 57% 40% Well-being fairs at some/all locations 55% 74% 53% 43% 35% 50% Onsite or near-site health clinic 42% 32% 23% 51% 55% 44% Onsite healthy lifestyle coaching in at least one location 41% 38% 23% 35% 45% 50% Lifestyle change and health management activities Stress or resilience management 47% 68% 64% 47% 27% 31% Maternity support (pre- and post-delivery, child care resources) 46% 81% NA 35% 38% 25% Tobacco-cessation programs 45% 89% 62% 27% 24% 22% Weight management programs 44% 81% 57% 20% 37% 25% Chronic condition (disease) management programs 39% 86% 25% 16% 32% 16% Telephonic lifestyle behavior coaching programs 35% 72% 49% 18% 15% 16% Web-based/Mobile lifestyle behavior coaching programs 31% 58% 44% 18% 16% 17% Healthy sleep programs 19% 37% 35% 11% 9% 10% Decision-support tools EAP 61% 98% 98% 46% 35% 42% Online information on demand 34% 59% 57% 24% 22% 20% Telemedicine for professional consultations 28% 46% 19% 14% 9% 26% 17 Employee Health and Business Success

The emphasis that employers continue to place on prevention programs isn t surprising given the rising rates of preventable chronic illnesses such as cardiovascular disease and diabetes. The prevalence of these conditions has expanded beyond Western economies to become a global issue and in some countries, an urgent one. This is particularly problematic for employers whose health and well-being programs are evolving, a process that can take many years. It s common for employers to begin by adding primary and secondary prevention interventions such as screenings, vaccinations and onsite services that focus on catching diseases in their earliest stages. Once employees become more aware of disease risks and understand the connection between lifestyle and disease, demand for these services rise. The uptake in lifestyle management programs hasn t been widespread outside of North America, where health and well-being programs have been established and evolving for several decades. It s common for U.S. employers to directly address the full gamut of lifestyle-related risk factors that drive up health care costs by offering programs to help employees manage stress, maintain a healthy weight and cease using tobacco. While lifestyle management programs aren t widely offered in other regions, stress management and resilience management programs are the most prevalent, especially in European countries, which is consistent with stress being the top lifestyle-related risk globally. There are opportunities for greater employer uptake in programs like tobacco cessation in some areas of Asia, Europe and the Middle East, where smoking rates, especially among men, are quite high. And though a vast majority of U.S. employers offer programs for chronic condition management, these programs haven t yet made their way into other markets, except for a few in Latin America. In one of the more exciting areas, many new health-related online and mobile applications are becoming widely available. This development provides employers with more costeffective opportunities for enhancing their health and wellbeing programs. These include online tracking and education tools that help employees understand their lifestyle-related health risks, as well as platforms for providing efficient delivery of acute health care services. For example, in the U.S., there s an uptake in telemedicine by which employees can consult medical professionals via phone, online chat or video in lieu of or before seeking more expensive care at a medical facility. Telemedicine, which can increase the access to and efficiency of health service, is expected to expand even more over the next few years. Higher use in Asia Pacific is already evident. Lower uptake in Europe is likely attributable to tight privacy and security requirements. Program Participation Though the offering of health and well-being programs is broad and growing in all regions, employers are still challenged to motivate employees to participate. Our study found that only around half of employees who are eligible to participate in these programs are actually making use of them (Figure 15). Figure 15. Companies struggle to boost participation in health and well-being programs 0% 10% 20% 30% 40% 50% 60% Global U.S. Canada Europe Latin America Asia Pacific 31 In North America and Europe, employee participation in most lifestyle change and health management programs ranges between 10% and 20%. And participation rates in the U.S., where programs have been in place for many years, have historically been low for some programs, including weight management and onsite fitness programs. Possibly due to the absence of financial incentives to encourage participation, rates have declined in the U.S. in recent years for programs such as health coaching and health assessments. 38 49 50 57 57 Our study found that only around half of employees who are eligible to participate in these programs are actually making use of them. 18 willistowerswatson.com