Company fitness program and its benefits.Proposal - Essay Example

? Proposal Company fitness program and its benefits Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Problem ment 5 Objective of the Project 5 Project Requirements 6 Project Cost 6 Project Benefits 7 Past Studies 8 Conclusion and Recommendations 9 References 11 Executive Summary Company fitness programs have now become the necessity for companies in order to become more productive and profitable. Many companies are now showing their concerns towards employee’s health related issues and some of them have developed on-site fitness center. The Company also intends to establish on-site fitness center so that employees could become physically and mentally strong and hence their productivity could be increased (Ichihashi, Muto, and Shibuya, 2007). Therefore, this proposal will highlight the key benefits of on-site fitness center and will also identify the requirements, costs, and time for establishing on-site fitness center. The main objective of on-site fitness center is to reduce health care expenditure of employer. It has been noticed that company spends millions of dollars every year for employee’s health issues. Moreover, employee’s absenteeism and turnover rate have also been the serious problem for productivity and profitability of company. It has been estimated that employee’s health care cost and absenteeism rate would decline. Hence the end-result for the company would be higher productivity and profitability. Many studies have also been conducted to determine the benefits of company fitness programs. Therefore, it is expected that on-site fitness center would bring the profitability for company (Goetzel and Ozminkowski, 2008). However it is recommended that company should properly measure the performance of every employee participating in on-site fitness center programs. Moreover, it should also highlight to its employees the key benefits of joining fitness center. Introduction The economic benefits of the corporate wellness program are being analyzed and acknowledged by the organizations (Ansparugh, Hunter, and Mosley, 1995). In Globalization era, where most of the employees working in the motion less style, the need of proper physical fitness programs have been arising in organizations. Technological advancement and automation has reduced the physical activities of employees and thus they have become very careful regarding their health. They are facing stress and other physical problems due to improper diet and lack of physical activities. Today every employee wants to be fit and healthy person not only because of health concerns but also for looking slim and smart. Therefore, company health and fitness programs have now become the necessity of time in order to maintain the balanced and healthy life of employees (Goetzel and Ozminkowski, 2008). Many of the organizations have realized this issue and have started health and fitness programs for their employees. These organizations noted that health and fitness programs lead to improve employees’ performance. They become very active in their jobs and feel happy during their work. The report prepared by the US department of Disease Prevention and Health promotion in 1993 claimed that on-site health fitness programs is the major contribution in improving health of many American employees (Goetzel and Ozminkowski, 2008). There are many other organizations which are facing problems regarding increasing health issues of employees. The cost of spending in worker’s health is increasing due to increasing ratio of health problems in employees. In America, more than one third of the total annual medical bill was paid by employers and the average medical premium for single coverage was $3615 a year in 2006 (Goetzel and Ozminkowski, 2008). Organizations are also worried for increasing employee’s absenteeism and turnover ratio due to health related issues in them (Ichihashi, Muto, and Shibuya, 2007). Therefore, the idea of on-site fitness centers will be beneficial for both the employees and the employer. The fitness center will help employees to stay fit and healthy. Moreover, it will reduce cost of investing in worker’s health, reduce employees turnover and absenteeism ratio, make employees physically and mentally strong, enhance performance of the employees, and improve company profitability. Problem Statement The problem statement is “to establish on-site fitness center for employees in order to reduce company’s healthcare costs, employee’s absenteeism, and employee’s turnover ratio” The organization is facing problems regarding health care issues of employees due to which employee’s medical costs, absenteeism and turnover ratio is increasing. Company is intended to introduce fitness programs in the organization. For this purpose, on-site fitness center needs to be established. Objective of the Project The objective of the project is to reduce health issue of the employees which is the major reason of declining company’s overall performance. Increasing health care issues in employees have declined their performance in the workplace and increased absenteeism and turnover ratio. Company health care expenses are also increasing due to health care issues. The purpose of the on-site fitness center is to reduce health related issues in employees so that profitability of the company can be improved. The organization understands the problems of the employees and wants to see its employees physically and mentally strong. Project Requirements The organization requires on-site clean and healthy place for its fitness center project. The following are the requirements of the project 1. There are large numbers of employees in the company therefore Health Fitness Center should be convenient for employees. The inside space of center must be enough for employees and it should cover 5,000 sq ft. of area. 2. There should be 3 jogging machine for warm up, 5 Elliptical machines, and 5 Exercise bikes. 3. In weight area, there should be 4 benches, 30 dumbbell sets of different KGs (ranges from 1 kg to 10 kg), and 3 multi gym machine. 4. The environment of fitness center must be cool therefore 10 Split (1.5 ton) ACs must be working in the total area. 5. There must be 1 instructor who helps employees for their fitness. 6. 10 Mirrors of 10X10 must be placed in weight area. 7. Other accessories such as lights, fans, and communication devices. Project Cost Material/Equipment/Labor Total Cost Designing of Building $1000 Material Required for building $25,000 Labor $28,000 Fitness Equipments $50,000 Instructor Salary per month $3,000 Mirrors $5,000 Air conditioner $5,000 Miscellaneous expenses $5,000 Total Cost $122,000 The total estimated cost of the project is $122,000 and the total estimated time would be one month. Company current average cost of absenteeism per employee a day is $320 and average employee health expense is $5,000 per year. Project Benefits There are 600 people working in the organization and the average number of absenteeism due to health issues is 5,000 per year. Hence the total absenteeism cost which company bearing is ($320*5,000) 1.6 million. On the other hand total health care expenditure of company is (5,000*600) 0.3 million. It is estimated that after a year of its establishment, the average employee health care expenditure would decrease by 10 percent every year. Therefore company would be saving (3000,000*0.1) $300,000 per year. The total cost saving by implementing this project would be (1600, 000+300,000) $1.9 million. This is monetary benefit for the company but other benefit will include the reduction of employees’ turnover, and enhanced performance of the employees during working hours. Hence the project can improve the productivity and profitability of the company. Past Studies Many studies have been conducted to find out the relation between company’s fitness programs and employee’s level of absenteeism, turnover and performance. 1. A Harvard Business Review article published in 2010 found that company fitness programs can save as much as six times the cost of the company (Bernstein, 2011). 2. Another research published in journal of health affairs concluded that company’s medical costs and absenteeism costs decline by $3.27 and $2.73 respectively for every dollar it spends on fitness programs (Bernstein, 2011). 3. In a federal funded research of Canada conducted in 1978, researchers concluded that regular participation of workforce in company fitness programs can reduce absenteeism and improve their productivity, morale and retention. They calculated that company can save $6.85 for every dollar it spends on fitness programs (Pridham, 2002). 4. A report published by National business group of health stated that more than 140 of fortune 200 companies offering its employees health fitness programs (Khazan, 2011). 5. Toronto life Assurance found that turnover rate of those employees who regularly participate in company health fitness programs was 1.5% yearly as compared to 15% for who do not participate in fitness programs (Shephard, 1986). Conclusion and Recommendations Company fitness programs have become the necessity of time in order to enhance the profitability of company. Like other companies, this company is also interested in establishing on-site fitness center. The idea would greatly work if it is properly implemented. For that purpose, company needs sufficient space with advance fitness equipment. The successful execution of on-site health fitness center will have many benefits not only for employees but also for employer. Firstly, by participating in company health fitness programs, employees would become fit and healthy both and mentally physically. They will become active in their work and thus their productivity would increase. Secondly, employees’ absenteeism and turnover rate would decrease which would be beneficial for the company in monetary terms. Finally, health care expenditure of employer would significantly reduce. It is estimated that health care cost and absenteeism rate would decline by 10 percent and 8 percent per year respectively after one year of establishment of on-site fitness center. It will be responsibility of employer to ensure regular participation of employees in health fitness programs. For that purpose, it should develop a check and balance system for every employee participating in fitness center programs. Along with that, employer should also measure the absenteeism, health issues, and productivity of the employees. It should also demonstrate the key benefits of healthy life to employees so that more and more employees join fitness center. The healthy life of employees always leads to healthy improvement in company’s profitability. References Ansparugh, D., Hunter, S., and Mosley, J. (1995). The economic impact of corporate wellness programs: past and future considerations. AAOHN Journal, 43, 203-210. Bernstein, L. (2011). Corporate fitness program survive hard times. Washington Post. Retrieved September 29, 2012, from http://www.washingtonpost.com/lifestyle/wellness/corporate-fitness-programs-survive-hard-times/2011/06/21/gHQA37OHyH_story.html Goetzel, R., and Ozminkowski, R. (2008). The Health and Cost Benefits of Work Site Health-Promotion Programs.’ The Annual Review of Public Health, 29, 303-323. Retrieved September 30, 2012, from http://www.doh.state.fl.us/chdManatee/Pdf/Health_and_Cost_Benefits.pdf Ichihashi, T., Muto, T., and Shibuya, K. (2007). Cost-Benefit Analysis of a Worksite Oral-Health Promotion Program. Industrial Health, 45(1), 32-36. Khazan, O. (2011). Employers tell workers to get a move on. Los Angeles Times. Retrieved September 29, 2012, from http://articles.latimes.com/2011/may/15/health/la-he-workplace-fitness-20110515 Pridham, S. (2002). Workplace fitness facilities – a popular amenity with a healthy payback. Office Life. Trift Inc. Retrieved September 30, 2012, from http://www2.trifit.com/articles/OfficeLifeArticle.pdf Shephard R. (1986). The economic benefits of enhanced fitness. Champaign, IL: Human Kinetics Publishers. Read More