Spending more on employee healthcare boosts profitability, Japanese experts tell Lankan firms
Sri Lankan businesses could increase their profitability if they spent more on the healthcare of their employees, according to the Japanese experts who were in Colombo recently to conduct research on healthcare and productivity in Sri Lankan firms.
The research, which was commissioned by the Japanese government’s Japan External Trade Organisation (JETRO), is being conducted by several leading private companies in Japan, led by the technological giant Hitachi.
“We will be starting a project with some companies based in Colombo to evaluate their processes on promoting employee health and productivity and ascertain which practices could be adopted,” said Hitachi Ltd International Standardization Office Senior Chief Engineer Dr. Yoshi Ichikawa.
He was speaking at a workshop which was organised recently by JETRO in collaboration with the Chamber of Young Lankan Entrepreneurs (COYLE) and supported by the Sri Lanka Association of Software and Service Companies.
“I know that there are large similarities between Japanese and Sri Lankan people. There’s a lot of stress at work and it leads to excessive drinking, smoking and getting shouted at by the boss,” he said.
Dr. Ichikawa said that he had witnessed how Sri Lankan companies, which had provided healthcare benefits to their employees, had seen their employee behaviour and productivity improve.
JETRO is attempting to promote benchmarked Japanese healthcare and productivity improvement strategies and services in Sri Lanka in order to help firms perform better and improve Sri Lanka’s economic growth.
During the workshop, local participants highlighted the unique aspects of Sri Lanka’s insurance and healthcare systems, how local companies work within this framework and that Japanese processes must address these realities when they are implemented in Sri Lanka.
Dr. Ichikawa outlined some of the leading Japanese practices, including health education, data health, special diets and automated support systems along with lifestyle choices at the workplace which have made employees happy and helped increase the performance of their companies.
He said that these are related to both physical and mental health. “Compared to unhappy people, happy people have a 35 percent higher productivity and 300 percent more creativity. Creativity is a measure of mental well-being,” he added.
The findings are corroborated by a study conducted by Johnsons and Johnsons worldwide, which found that every US $ 1 spent on healthcare and productivity management gave a return between US $ 2 to US $ 4. A separate study had placed the return as high as US $ 6 for each US $ 1 spent by an employer.
While higher spending by businesses on healthcare and well-being increases business performance, from the employee perspective it decreases personal healthcare spending, increases salaries, provides greater professional opportunities and enhances work and social life, according to Dr. Ichikawa. Increased healthcare spending by employers would also lead to reduced risk of non-communicable diseases such as obesity and diabetes, said Shigeru Yamato, who is the CEO of Marimo5 Co. Ltd, which is a Japanese company that consults on workplace healthcare and productivity practices in Japan and Thailand.
Although deaths from non-communicable diseases are higher in Japan at 79 percent, compared to Sri Lanka’s 75 percent, Sri Lanka has higher diabetes prevalence at 8.4 percent compared to Japan’s 7.8 percent, while obesity in Sri Lanka is over 40 percent, compared to around 26 percent in Japan, Yamato said.
“Obesity results in higher medical costs and absenteeism,” he said. Yamato said that a healthy and decent workplace are part of the Sustainable Development Goals and Marimo5 is exploring the possibility of entering Sri Lanka with its services, which include food education, chef training at canteens, data management of health checkups and advising on medical costs.