I’ve been reading a lot of articles about the need for HR to become more data-driven. One article, Survey: Some Predict HR Will Be Automated, Data-driven and Strategic by 2022, states that the top 3 areas of focus over the next 5 years will likely be training and development, morale, and retention. It goes on to say that HR will invest heavily in people and data to address their two biggest challenges—finding the right people and keeping them motivated.

Another article, 10 Reasons to Shift to a Data-Driven High Business Impact HR Model, says a 2017 survey by Conference Board ranks human capital as the biggest challenge facing CEOs. It then provides tips on using HR analytics to become more strategic on human capital planning

These articles and others about workforce analytics or people analytics (as it’s also called), provide really good insight, but I think they’re missing out on a key area of focus—healthcare. Healthcare impacts employee productivity, absenteeism, presenteeism, morale, job satisfaction, and retention. It’s also one of the company’s biggest expenses. I just don’t see how HR can truly become data-driven or strategic without also investing in analytics across all employee benefit programs—medical, Rx, wellness, dental, vision, workers’ compensation, disability, absence, safety, 401k and any others.

The Impact of Poor Health on Productivity

“HR needs to analyze all benefits program data to deliver true strategic value.” – Sashi Segu, Innovu Counsel

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Workforce output is directly tied to revenue. Poor health can cause your bottom line to suffer.

Indirect costs of poor health—reduced productivity, absenteeism, and disability—could be several times higher than your direct medical costs. The CDC reports that productivity losses related to personal and family health problems cost US employers $1,685 per employee per year, or $225.8 billion annually.

A study by the Nashville Chamber of Commerce and FTI Consulting asserts that lost productivity from diabetes, high blood pressure, and obesity cost area businesses $500 million (Tennessean).

Sick employees coming to work also impact productivity, a challenge that can be mitigated by fostering a supportive company culture through a social recognition platform. Such platforms encourage healthy behavior and peer recognition, which can reduce the frequency of sick employees feeling compelled to come to work, thus indirectly boosting productivity.

Studies show that sick employees who miss work cause a 24% reduction in productivity, but when they come to work sick, there is a 72% loss of productivity because they infect other employees.

Employees suffering from depression and other mental health conditions have an average of 5.1 other conditions, which also impacts productivity:

• 48% suffer from anxiety
• 46% are chronically fatigued
• 29% are obese
• 26% have chronic sleeping problems
• 26% have chronic back or neck pain (32%).

Productivity losses due to poor health cost US employers $225.8 billion annually.

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If you aren’t analyzing how mental health costs are impacting all your benefits programs, you’re missing key insight into what’s driving your healthcare costs and productivity loss.

How Health Impacts Employee Safety

Mental and physical health influences employee safety, especially when the work is repetitive and strenuous. Studies have linked obesity to back injuries and stress to high blood pressure, which has been shown to cause poor decision-making. Lack of sleep and fatigue are also tied to workplace safety, even for white collar workers (Occupational Health and Safety).

Frequency and severity of injuries (e.g., recovery time, likelihood of a full recovery, and increased risk of medical complications) have been linked to employee health risk. In a study of a large US employer,

• Employees with 5 or more health risks had 300% more workers’ compensation claims than those with 2 or fewer health risks.
• Employees with 3-4 health risks had 150% more workers’ comp claims (Knowledge at Work).

Lack of Retirement Preparedness Could Impact Your Quantified Liability

If your employees are like most Americans, they haven’t saved enough to retire at age 65. The National Institute on Retirement Securityreports that the median retirement account balance:

• For all working age households is only $2,500

• For near-retirement households is only $14,500.

Employees working longer can adversely impact your healthcare costs. But more importantly, it is creating an unquantified liability for employers. You need to be able to assess the retirement readiness of your employees to quantify your future risk from higher incomes, higher medical and pharmacy costs, increased safety risk, and other risk exposures from an aging workforce.

With evidence like this, I hope you agree that including all your benefit programs in your HR analytics approach is imperative. If you don’t, you’re missing critical information that could reduce current and future costs and improve your company’s bottom line. Be a true strategic partner to your C-suite and give them data-driven benefits program insight.

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