What You Need to Know About Employee Health Scorecards Some companies, persuaded by data linking better employee health and better company performance, will report on workforce health just as they do financials.

By Matt Straz

Opinions expressed by Entrepreneur contributors are their own.


Employee health is one of the biggest investments employers and their employees make all year. Some major businesses are now calling for more accountability for workplace wellness among employers.

Last week at the World Economic Forum annual meeting in Davos-Klosters, Switzerland, corporations and health organizations, including the American Heart Association, IBM, Johnson & Johnson, and PepsiCo, announced their participation in an initiative of the Vitality Institute to publicly report workforce health metrics.

The participants met for more than a year to discuss best practices for reporting these metrics and developed two health metrics scorecards. The idea is to create a standard measure of employee health to evaluate a company's commitment to wellness. Then, companies would publish this metric publicly alongside typical financial metrics they report, keeping employers accountable.

Employee health scorecards feel like a natural progression of HR metrics for measuring employee benefits and wellness initiatives. If used properly, they could allow HR professionals to benchmark their benefits plans and employee health with competitors in their industries.

But what will this new approach to wellness in the workplace mean for small and medium companies in practice? Here's a look at the potential impacts of these recent developments on the evolution of employee health:

The holistic view of employee health.

More and more employers are investing in the health and well-being of their employees. Why? The obvious answer is that healthier employees decrease health care costs. While this is true, organizations are recognizing additional benefits and adopting a more holistic view of employee well-being.

Investing in the health and well-being of employees can help solve one of the biggest workplace problems -- engagement. In a 2015 survey conducted by Quantum Workplace and Limeade, respondents were 38 percent more engaged and 18 percent more likely to go the extra mile when they felt their employers cared about their well-being.

Related: Using Wearable Devices to Help Promote Employee Wellness

The role of the scorecard.

Employee scorecards aim to set a standard measure for the benefits of employee health investments. Scorecards are a logical next step in HR metrics, and they're already showing results for businesses.

A study published in the January issue of the Journal of Occupational and Environmental Medicine tracked the stock performance of 45 publicly-traded companies that earned top scores on employee health and wellness scorecards developed by the Health Enhancement Research Organization. It found the high scorers out-performed the 500 largest U.S. companies listed on the S&P 500 index over a six-year period.

Two additional studies published in the same issue showed similar results, suggesting that successful companies invest in and measure employee health.

Beyond metrics

Incorporating new tools like scorecards to better measure employee health is beneficial to employers. They can help direct business decisions and point to where employees need support to improve their wellness.

But consolidating the entire health of a workforce into one number is tricky, and may not always represent the needs of employees. From an HR standpoint, employee health scorecards are just one number, one tool -- every decision can't be based on metrics alone. A number can't capture everything. People, not numbers, come first when making HR decisions.

To truly improve employee health, HR needs to listen to employee wants and needs, and find the best ways to support their well-being. What are employees' biggest health challenges and goals? How can the employer help achieve them? People are the heart of HR, and while metrics can provide insight and lead to improvements, feedback and input from employees is still key.

Related: 4 Hacks for Lowering Health-Care Costs While Improving Employee Health

Compliance concerns

Employee health metrics may support HR decision-making, but there are legal issues to keep in mind before any company starts tallying up totals. Employers must be careful when publishing health metrics. For one, data needs to be presented in a way that complies with employee privacy laws. A scorecard should look at an organization holistically, not single out subgroups or individual employees.

Wellness initiatives themselves can raise compliance issues as well. The big question is whether employers can require participation in certain wellness programs. Although there is no clear answer yet, recent court cases support the idea that employers can create wellness programs as long as they are fitting for an entire workforce.

Just as HR professionals must always think about people first in the face of metrics, they must think of all their employees when creating wellness programs and initiatives. What is best for the entire workforce? Although metrics can tell us a lot, they can't capture the complete picture of your employees as people. Like any strategic human resources initiative, there's only one way to get that full view: through the keen eye of a thoughtful HR professional.

Related: Companies Gain Competitive Advantage by Improving Employee Health

Wavy Line
Matt Straz

Founder and CEO of Namely

Matt Straz is the founder and CEO of Namely, the HR and payroll platform for the world's most exciting companies.

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