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Exercise Options

HR Magazine, June 2005 Is an on-site exercise facility or an off-site reimbursement program better for your organization?

Denise Townsend personally tested the theory that exercise boosts productivity at work. Townsend, a community relations coordinator for The Regence Group, an affiliation of health care plans in Portland, Ore., says exercise improves her performance.

“I’ve had days when I have been under an impending deadline where I have just powered through the work, and I have also had those same circumstances where I made myself take a break and work out,” she says. “Every time I went to exercise and clear my head, I was much more effective in getting my work done and doing it well.” Research backs up Townsend’s experiences.

A 1990 study of Johnson & Johnson employees found that employees’ attitudes toward their jobs improved when they participated in “health promotion intervention sites,” which included fitness centers. Employees’ attitudes improved most with regard to organizational commitment, supervision, working conditions, job competence, pay, fringe benefits and job security.

And there is other evidence that fitness improves work attitudes, which in turn helps curb the effects of both presenteeism and absenteeism. Some examples documented by employers:

  • The DuPont Corp. found that absences from illness unrelated to the job decreased 14 percent at 41 industrial sites where its health promotion program was offered, compared with a 5.8 percent decline at the 19 sites where it wasn’t.
  • Pacific Bell’s FitWorks program decreased absentee days by 0.8 percent, saving the company $2 million in one year. Those who participated in the program spent 3.3 fewer days on short-term disability, saving an additional $4.7 million during the same time frame.
  • The Coca-Cola Co. reported a reduction of $500 in annual health care claims for each employee participating in its fitness program, HealthWorks.

Results like these suggest that everyone at your company should lace up their athletic shoes and head for the gym. But the question many HR professionals are now facing is this: Where should that gym be located—on-site or off-site?

Some companies choose to reimburse employees for use of off-site facilities; others choose to set up on-site facilities. Which option works best for you? It depends on which of several factors matter most to you and your employees.

Off-Site: Emphasizing Choice

Berlin Packaging LLC, a supplier of rigid packaging in Chicago, decided 10 years ago to help defray the cost of fitness programs for employees who exercised at the off-site gym of their choice.

Because Berlin has 20 facilities coast to coast, with some sites employing only a few workers, the company figured reimbursing employees’ fitness costs made more sense than having an on-site facility.

In addition, says Jim Sollenberger, SPHR, vice president of HR and organizational effectiveness, the company wanted a program that fit employees’ lifestyles, letting them make their own decisions about the types of activities in which they wanted to engage.

That flexibility has been important to Jay Koger, regional manager of business development in the company’s Dallas office. Koger exercises every afternoon and is currently training for a triathlon, but he admits he wasn’t always so fit. That changed about seven years ago, when he took advantage of the company’s fitness reimbursement program.

As his fitness needs have changed, Berlin’s reimbursement program has given Koger the flexibility to move to facilities that better serve his needs. For example, he initially joined clubs that emphasized running, but later switched to one that lets him swim and bike while he trains for the triathlon.

His current facility also gives him time with his daughter. They go to the gym together, and he exercises while she “works out” in the children’s section; later, they meet for a swim.

Ensuring employee choice also led Eschelon Telecom Inc., a telecommunications provider in Minneapolis, to reimburse fitness center costs for employees who use off-site facilities.

“Our employees like choice and want things simple,” says Carol Braun, vice president of HR. “Some employees want a family-friendly health club, while others want one that is mainly utilized by other singles. You want them to go where they are comfortable so they keep going.”

Both companies keep their programs simple. Berlin reimburses 50 percent of employee costs, up to $250 a year, for any type of fitness activities—including classes. To be reimbursed, employees turn in a receipt along with a signed statement verifying their involvement with the program.

It’s that easy at Eschelon, too, though employees can be reimbursed only on a monthly or quarterly basis.

Braun says the company pays 50 percent of employees’ costs up to a maximum of the current monthly YMCA fee, which in the Minneapolis area is $52. The company also pays for dual and family memberships—again, based on current YMCA rates.

Neither company checks on employees to verify they are using the facilities on a regular basis, but it is an option for some companies.

“They’re adults, and I don’t think we need to control or monitor,” says Sollenberger. “It’s a concept of trust, really.”

Convenience, Personal Contact Helps

Other companies find that there are important advantages to having a fitness center at the workplace. Those advantages include greater convenience, more personalized instruction and increased employee interaction.

The Regence Group, where Townsend both works and works out, offers on-site fitness facilities for its employees at three of its larger sites. “In our metro areas, it makes sense to offer it on campus,” says Rod Hart, the company’s supervisor of safety and wellness. “It may be hard for them otherwise to find the time to go to another facility, work out, change and then come back to the office.”

Says Townsend: “Having it on-site means I can get a workout even if I only have 20 minutes. I could never do that if I had to go to an outside facility.”

Some companies look to maximize such convenience in other ways. For example, Mitre Corp., a provider of engineering and IT systems with headquarters in Bedford, Mass., and McLean, Va., is providing shorter and easier ways for employees to use the company’s on-site exercise facilities. “They don’t have to change and shower or make a 60-minute commitment to start exercising,” says Joyce Barth, health and wellness manager. “They can do it in their work clothes and be back at their desks in 30 minutes. That makes it easier for them to get started.”

At Regence, on-site facilities offer a broad array of cardiovascular and weight equipment and areas for classes, such as jazzercise and kickboxing. They also provide wellness coordinators who can help employees design workouts that are right for their individual levels, stressing incremental changes instead of monumental ones.

“I was definitely one of those who took incremental steps,” says Townsend. “I went from going to an aerobics class a couple of times a week to running a 5k and 10k and, this year, a half-marathon.”

The personal contact with on-site coordinators has been a big plus at Mitre as well.

“The coordinators get to know you and your fitness needs,” says Cheryl Balian, senior writer for Mitre. “They help me navigate the equipment and help me design a new workout when I’ve hit a plateau with my old one. I know off-site centers have them, but it’s different. Here I’ll bump into them in the cafeteria or at a company gathering. They just give more personal attention.”

For example, both Regence and Mitre seek feedback from employees and develop programs and classes geared specifically to their needs—needs that could be drowned out in larger facilities that must balance the potentially competing needs of various customers.

On-site fitness centers also encourage camaraderie among employees who serve as mutual mentors and spur each other to use the facility—which can be that final incentive workers need to make it to an exercise class the next morning.

“There’s no better motivation for me than running into someone else in the class who asks if I’m going to be there tomorrow,” admits Townsend. “I will be now.”

Costs and Fees

On-site facilities may offer potential advantages for employees, but they also involve greater up-front costs and risks for employers.

How much cost? Fitness Resource, a fitness equipment provider in Fairfax, Va., suggests some benchmarks: 200 to 400 users will need at least four cardio machines and weight training equipment to supply at least six to eight single stations. Cost estimates for such a moderately equipped fitness center run from $30,000 to $75,000—just for the equipment alone. Class instructors and other staffing are additional.

To recoup at least some of the costs, both Mitre and Regence charge employees a membership fee.

In Mitre’s case, they do so because they are a government contractor and are required to charge a nominal fee in an effort to cover costs, says Bill Albright, director of quality work/life and benefits. The company charges employees $5 a week for use of its larger facilities and $2 to $3 a week for its smaller sites. Regence employees who use its on-site facility pay $13 a month.

Employers also must address the legal risks of on-site facilities, in case employees injure themselves while working out.

“Be certain that all employees who use the facility understand that they are exercising at their own risk,” advises Patricia G. Butler, senior counsel with Ford & Harrison LLP, a labor and employment law firm in Atlanta. “To protect yourself against workers’ compensation claims, it’s wise to stress to your employees that they are using the center on their own time and voluntarily.”

She adds: “An employer probably cannot protect itself too much in this regard.” Butler also recommends that on-site facilities have a phone in case someone needs help, a secure entrance and—for companies that can afford it—a security camera.

In addition, encourage employees to check with their doctors before starting a fitness program. For example, Regence conducts a health screening, called a profile. If the profile reveals any problems, the company may require an employee to visit a physician. Berlin does not require clearance to use off-site facilities, but it does provide employees one half-day off each year for a physical.

Also, set up regular schedules for checking and maintaining all equipment for proper operation and safety.

Explore Alternatives

For some companies, neither the on-site nor the off-site option is ideal. In such cases, there are variations that may better serve the needs of both employers and their workers.

One option is to offer a mix of on-site and off-site facilities. For example, Regence offers on-site facilities at its largest sites, but at smaller sites where an on-site option isn’t feasible, the company reimburses workers for off-site fitness expenses.

Another option is to offer discounted national health-club memberships to employees. This strategy may work best for companies with multiple locations. Regence, for instance, offers employees the opportunity to join one of three national health clubs: 24-Hour Fitness, Curves for Women and Gold’s Gyms. The company pays for the entrance fee and then negotiates a discounted monthly rate that employees cover.

Or, if your company prefers an on-site facility but doesn’t want to worry about the details, some health clubs will oversee and manage the operations for you.

Some of the nation’s 2,600 YMCAs, for example, will set up a fitness center on your property—complete with equipment and staff. The organizations also can track employee utilization rates. In fact, many local YMCAs have offered this service for years, says Michael Spezzano, national health and fitness consultant for YMCA of the USA, based in Chicago.

“Most companies aren’t really familiar with what they may need to do it right. That is our specialty,” he says.

Spezzano notes, however, a decline in the number of requests for this service—largely due to employee preferences, he says. “Businesses are finding that utilization rates for off-site centers are basically as good as those for on-site,” he says. “And using the Y’s facilities can offer employees much more. For example, you probably aren’t going to have a swimming pool on-site.”

Taking the pulse of utilization rates at Mitre and Regence seems to echo that finding: Having an on-site facility doesn’t always mean more employees will take advantage of the benefit. Mitre and Regence each report that about 20 percent of their workforces use their centers; Regence counts an additional 500 employees (8.7 percent) who use one of its off-site fitness partners. Berlin Packaging and Eschelon Telecom report that 35 percent and 30 percent of employees, respectively, participate in off-site fitness offerings.

Fitness Pays

No matter which option you choose for encouraging employees to be physically active, you will likely see positive results in both performance and recruiting.

Offering a fitness program “goes to your people philosophy,” says Berlin’s Sollenberger. “It’s about looking at them as an investment, not as an expense.” He acknowledges the studies linking fitness with reduced health care costs and lower absenteeism, but says fitness programs offer other intangibles that benefit a company’s return on investment.

“At the end of the day, most companies are no better than their competitors. When you invest in the team you have, you are going to be able to execute better and be a better organization than your competitors. That’s why we do it.”

When it comes to battling the competition for talent, The Regence Group has noticed benefits also.

“We are in a building with other companies,” says Angela Hult, assistant director of strategic communications. “Our fitness center is housed on the lobby level, and we are the envy of everyone else. People who interview with us have actually said it is one of the reasons they want to work for us.”

Nancy Hatch Woodward is a freelance writer based in Tennessee and a frequent contributor to HR Magazine.

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Fitnesss Effects On Health Care Costs

Its a fact: Physically active employees are absent fewer days than their sedentary counterparts, says Nico Pronk, vice president of HealthPartners, an integrated health system company based in Bloomington, Minn.

Pronk, who also serves as chair of the American College of Sports Medicine (ACSM) Worksite Health Promotion Committee, says that even when theyre injured, active employees return to work faster because they heal quicker.

Recent studies document the proof:

  • An ACSM study published in December 2004 found that physically fit adult men have fewer overnight hospital stays and visit their doctors less frequently, reducing health care costs by more than 50 percent.
  • Studies by HealthPartners in 2003 found that adults age 50 and over who went from not exercising or exercising one day a week to participating in a moderate level of activity four or more days a week reduced their health care costs by $2,200 a year. People in all age groups, on average, lowered their health care costs by 4.7 percent for each additional day per week spent engaging in moderate activity. And employees who did 90 minutes of moderate exercise a week reduced health care costs by approximately $200 a year per person.
  • Cost savings are even more dramatic for obese employees. A study of 23,500 General Motors employees in the May 2004 Journal of Occupational and Environmental Medicine found that encouraging obese employees to engage in physical activity as little as once or twice a week reduced health care costs by $400 to $500 per year per employee for a total estimated savings of about $790,000, or 1.5 percent of health care costs for the whole group.


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