Any discussion of risk management involving construction invariably turns to worker injuries, financial risk, contractual risk, project risk, stakeholder risk – the list goes on. Often lost or overlooked is the connection between employee health and well being and the health of the enterprise itself, as well as methods of promoting healthy lifestyles that drive a healthier bottom line, according to John Patrick, vice president of health and performance with HUB International Midwest, a leading global insurance brokerage, risk advisory and employee benefits firm.
Patrick, who will be presenting at BuildIdeas! Employee Wellness on June 21, works with employers to develop strategies related to employee wellness, culture improvement and organizational health. In a discussion with BuiltWorlds, he noted that many employers, including construction-related enterprises, “understand the benefit of a holistic approach to employee health and wellness.” The problem, he added, is that “few employers know how to do it.”
JP: Very. Studies show that about 75% of health care costs and coverage are based on how we choose to live. A study by the “Harvard Business Review” found that for every dollar a company spends on employee medical costs, its lose $3 in productivity. We know that construction sites can be conducive to job injuries, but if a crew member who is 120 pounds overweight twists his knee, medical costs, productivity costs and workers compensation are going to be higher. The issue is, how can employers assist in promoting better health management among their workers?
BW: How do firms, including those involved in construction, accomplish that?
JP: The good news is that we’re learning more about what drives human behavior – the root causes of it. The older paradigm of health promotion primarily focused on health behaviors. The thinking once was, a person didn’t exercise because he didn’t feel like it. He overate because he felt like it. As health promotion paradigms evolve, we are seeing companies place more focus on both health behaviors and the root causes that drive those behaviors among employees. Another important factor is developing an effective program is the organizational health of the workplace and its effect on employee health and behavior. Assuming the workplace is tied to poor health and behavior, the objective is to develop an ecosystem in which employees can thrive.
BW: What does such a program look like?
JP: HUB’s approach to cultivating a high-performance workplace is to think of employees and the workplace as an interconnected system. We divide the system into six critical areas, or performance factors, that can impact employee performance, including health and energy; money and security; career and growth; culture and connection; productivity and risk; and communication and engagement. We’ve developed a comprehensive assessment that evaluates companies in accordance with those factors. The assessment focuses on answering the following three questions: Does the company have the essential resources to support each performance factor? Does the company have an effective strategy to support each performance factor? Does the company have the infrastructure to support each performance factor? The assessment allows us to identify gaps and how to address those gaps.
BW: Are segments of the construction industry prone to substandard health and performance among employees?
Yes, particularly in the areas health and energy, productivity and safety, and money and security. Construction workers tend to be lower educated and, as a result, confront a larger gap in financial literacy. As a result, many of them don’t think about 401k programs, let alone retirement. Many live from paycheck to paycheck. This can cause to enormous financial stress leading to problems involving health and nutrition. A 2015 study by the American Psychological Association indicated that 72% of Americans are financially stressed, with 36% of them responding by overeating unhealthy food or drinking too much. Further, a 2016 survey by PricewaterhouseCoopers found that issues of financial wellness can distract employees from work up to 13 hours per month.
BW: So financial stress alone can ripple through areas of productivity, health and nutrition. Are there other consequences for construction enterprises, as well?
JP: Yes, particularly employee turnover and the cost of securing qualified replacements if a contractor’s pay rate isn’t in line with that of similar companies. If an employee doesn’t have money in the bank, he or she may be more prone to jump ship and go with the competing employer that offers 50 cents more per hour.
BW: What role can construction firms, specialty contractors and the like play in relieving acute financial stress?
JP: Companies can work to understand the root cause of financial stress and assess the resources they have to support the financial wellness of their employees. For example, what is their budget for investing in financial wellness solutions? Is there a 401k manager available to provide on-site, one-on-one meetings with employees? If so, will it cost any money? Does the company have a relationship with its bank through which the bank may provide financial wellness support to employees? Are they interested in hiring a financial wellness vendor? From our perspective, the primary objective is to create the most effective wellness strategy within the scope of employee needs and the company’s available resources. Among other activities, we work with clients to develop a year-round communications and engagement strategy to market the financial wellness programs.
“Many construction workers don’t think about 401K programs, let alone retirement. Many live paycheck to paycheck. This can cause enormous financial stress.”
— John Patrick, HUB International Midwest
BW: Is financial stress a factor in other segments of the A/E/C industry, such as architecture and engineering?
JP: It’s becoming a more of problem among millennials as a result of student loans. Many entering the marketplace have difficulty meeting monthly payments. I recently came across a statistic indicating that an overwhelming majority of recent graduates would take jobs with enterprises that offered student loan assistance.
BW: Are companies implementing other strategies, as well?
JP: While employers are investing in financial wellness, their strategies vary greatly. At present, employers seem to be throwing things against the wall to see what sticks.