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G7 occupational health software can achieve multiple returns

(The authors of the article are lecturers from Corvinus University in Budapest. Gnes Szabó is an Assistant Professor in the Department of Business Economics at the Institute for Business Economics, and Peter Goasz is a qualified Associate Professor in the Department of Investments and Corporate Finance.


The health of the worker is also of value to the business owner. This claim is hardly being questioned by a senior executive who has had to resolve, for example during the Coronavirus pandemic, to replace a colleague who lost his job for weeks due to an illness. Of course, it is not enough for someone to simply show up at work: an employee who is stressed, tired, ill, tired, or chronically persistent may be poor, and it may have a bad effect on their immediate employees.

The recognition is by no means new: the World Health Organization (WHO) has been working in the field of occupational health since 1950, confirming that not only the workplace and work affect the physical and mental health of workers, but also the health of workers affects the company. And its business. However, workplace health programs began to appear at the turn of the millennium. According to global surveys, while in 2008, only 34 percent of multinational companies had such a health initiative, in 2016, 69 percent of companies had this initiative.

  • First generation programs were typically smoking cessation campaigns.
  • During the second generation, they focused on assessing additional physical risk factors, while
  • In the third generation, the issue of total physical and mental well-being arose.

The fourth generation programs that are running today no longer operate at the individual level but at the organization level, integrating health into the corporate culture itself. These health programs include smoking, nutrition, exercise, and the use of tools to promote mental health or manage stress, and more recently, financial health has emerged to alleviate subsistence stress.

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At the societal level, chronic spending is increasing due to chronic diseases, although many diseases of the population can be prevented with an adequate lifestyle. However, the workplace is an excellent area of ​​health education because we spend a lot of time there and we can address employee communities in a targeted and ‘class-specific’ manner very efficiently.

Among the health risk factors, stress follows the lack of physical activity globally and in Europe. Since 2017, it has had the largest number of mental health-related program components globally, well ahead of program components related to the former pioneering movement. According to surveys, companies’ spending on health promotion in 2018 ranged very widely internationally, between $ 150 and $ 1,200 per person per year.

Experience has shown that health programs function well as great emphasis is placed on making the program strategically important, appointing officials, engaging employees, gathering employee needs, as well as organizational evaluation, commitment and management support. There is also a need to screen employees, set specific goals, plan and implement thoroughly, and choose appropriate incentives. Programs that work best through multiple channels, engage external experts as needed, and are subject to continuous evaluation, measurement and development, do better.

Research has shown that health programs clearly create value for the company. The programs improve employee health awareness, and reduce health risks and health expenditures at the company and individual level. It also increases productivity by reducing not only absenteeism but also attendance in a mental or physical exhausted state. However, the latter causes more damage than absences. Additionally, workers who smoke, eat unhealthy, or lead a sedentary lifestyle are more likely to develop than those who are healthy.

Thanks to the healthy programs, it can reduce fluctuations and improve morale and mood. According to a 2019 survey of nearly two million employees, employee satisfaction is closely related to employee productivity and customer loyalty, and is inversely related to fluctuations.

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Although continuous evaluation of programs is an important success factor, few do so in practice. Even internationally, only 28 percent of companies surveyed measured some form of financial profitability for health programs. However, when they do, the results are very favorable. According to scientific research, over a period of three years, every dollar spent on the Corporate Health Program brings $ 1.4-4.7 in benefits.

Most international research places the full benefits of the programs between $ 1 and $ 5 for every dollar spent.

There are three ways to measure the impact of programs. We can focus only on monetary benefits that can be measured well for the business owner (ROI approach – ROI) or changes that are often subjective and difficult to measure at the level of individuals and groups (investment value – VOI approach), but we can also estimate the benefits available to society as well. (Social return on investment – SROI).

Reasons to start health programs often include reduced healthcare expenditures, the number of sick days, and the frequency of injuries and disabilities. These are only taken into consideration when calculating the return on investment. However, although it only focuses on items that can be well measured in terms of money, difficulties of measurement can still be serious, and there is no completely standardized formula or definition. The meter may show income or savings (mainly in North America) but also net profits (in Europe and Australia); The denominator may be the recurring expenses, the capital invested in the program, or even the amount thereof; The total duration is one year in some cases, but the full term of the program in others

However, VOI measures also include indicators that are difficult to convert into Fortnite, such as health awareness, workforce retention, employee satisfaction, commitment, attendance, energy, team cohesion, and well-being. Additionally, each VOI factor is usually measured separately, and there is no single compounding index. A particular challenge is the many self-reported factors, which require more expensive measurements, usually focusing on quality parameters. In order to implement the VOI approach, the company information system must also be developed, otherwise companies rarely collect data about an employee’s mood, well-being, energy levels, or even attendance.

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The Social Return (SROI) developed from cost-benefit analysis seeks to capture the overall societal impact of programs, primarily in monetary terms. SROI also includes all stakeholders outside of the host community in the study, so this approach is more appropriate to support health policy decisions as they seek to maximize the overall well-being of the community. This approach also raises very serious ethical questions: What is the value of human life? Whether and to what extent a person’s well-being can be reduced in order to improve the well-being of others.

Regardless of which approach you choose, it is important for your company to have a health program and measure its impact! The workplace is an excellent area for creating health awareness. Employee health is a win-win collective condition that creates value not only for the individual and the company, but also indirectly for society.

(The authors ‘article “Measuring the Value of Creating Occupational Health Programs” was recognized by the Editorial Board of the Journal of Management Science with the “Excellent Essay 2019” award based on readers’ comments, downloads, and professional opinion of the journal. on this link Available.)

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