Corporate Values and Health and Well-being Benefits at KONE

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Benefits programmes can be an expensive business for multinational corporations. In many industries, however, such programmes have not been overhauled for some time, and all too often tradition, rather than actual need, dictates spending.

This article explains how KONE, a global leader in the elevator and escalator industry, worked with Mercer to implement a global evidence-based benefits strategy that would reduce its costs, promote sustainability and increased productivity, and lead to better health outcomes for its employees.

Context and BackgroundFounded in Finland in 1910, KONE now has more than 50,000 employees worldwide. Its range of solutions to facilitate optimum People Flow® — in other words, enabling people to move smoothly and safely within buildings — has helped yield net sales of €8.6 billion.

KONE has a long tradition of innovation, both in its products and services and also in the way the business operates. In recent years, the company has applied its innovative approach to employee well-being and engagement.

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KONE had identified improving employee engagement as one of its five key strategic targets. Because engagement is linked to both productivity and health, two preparatory projects were undertaken simultaneously in 2011. The first involved conducting a benefits audit with three principal aims: to stress test the relevance of KONE’s existing employee benefits provision; to identify harmonisation and cost-efficiency opportunities; and to determine and manage any risks.

The audit revealed that although KONE was compliant with the relevant legislation, it was not always market-competitive. It also became clear that cost savings and efficiency improvements could result from a more coordinated approach to benefits management, and that gains could also be made from leveraging the global scale of the organisation more effectively.

A parallel survey of well-being across KONE’s 14 largest international locations was similarly revealing, and several broad themes emerged. It was evident that well-being as a concept was poorly understood and that related programmes were thin on the ground — or non-existent — in many countries. Moreover, although many roles at KONE were physical and involved potential strain to the back, neck and limbs, psychological issues such as stress were also increasingly relevant. Several specific local issues were also identified, such as diabetes, weight management and tobacco use.

Stage 1: Understanding Employee Benefits and Well-being

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The wide-ranging data audit had left KONE with a much clearer idea about its most pressing challenges, but the HR team still needed to engage the wider business and explain to key stakeholders both the risks and the opportunities of a revised global benefits strategy. Perhaps the most crucial aspect of that was persuasively working through the potential advantages of upfront investment, namely that it would:

• Support the company’s strategic target of being a great place to work by aiding the recruitment and retention of top talent, as well as improving employee engagement

• Increase productivity by reducing absenteeism, stress and injuries (put bluntly, healthy employees are more engaged and get more done)

• Reduce costs by cutting health care expenditure

“KONE defined health and well-being as something that wasn’t ‘nice-to-have’ but ‘need-to-have’ if it was to achieve its best-in-class aspirations and their growth plans,” said Dr. Wolfgang Seidl, Mercer’s Workplace Health Consulting Leader (UK and Europe), who was part of the team brought on board to work with KONE. “A compelling business case was made that didn’t just include potential outcomes of health interventions but also brought together key corporate goals and messages, such as business outcomes, health and safety, productivity, a flourishing workforce and successful client relationships.”

Stage 2: Engaging the Business About Employee Benefits and Well-being

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Having made a compelling business case, KONE’s HR team worked to pin down the core principles of its well-being programme and, crucially, create a well-being brand — “Elevate your health” – to galvanise messages around positive behavioural change.

KONE’s definition of well-being — “the state of being physically, mentally and socially healthy, and therefore having a balanced life” — was clarified, and employees’ contribution also defined carefully and clearly: they needed to be aware of their situation, be responsible and be active.

Getting the branding right was an important element at this stage. From its internal surveys, KONE realized that it was doing an awful lot to support staff to be healthy, but it wasn’t getting credit for its efforts because people didn’t recognise them as a cohesive programme. Employees needed to realise that all communications and initiatives were linked to ”Elevate your health” and that, more broadly, the programme was a win/win for all concerned: employees would become healthier and happier, while KONE would benefit from reduced health care spending and improved productivity and employee engagement.

To bring the brand to life, KONE looked to its senior management team to take the reins and instill the values of the programme from the top down, starting with training modules for managers. Resilience had been identified as one of the company’s priority issues. There was evidence that stress was a very significant part of a number of job roles and that this was being compounded by operational and workflow changes within the company. “Train the trainer” sessions on resilience were established so that KONE could help managers spot signs of increasing pressure in themselves and others, and take steps to help their people to cope. This approach allowed KONE to own the message in an authentic way, setting a blueprint for other health initiatives. Wherever possible, the team took a “glocal” approach that explained the company-wide goals in ways that resonated with local units and encouraged countries to act on their individual needs. A range of customisable communications materials and templates, including both printed material and e-learning brochures, was produced. Most recently, a series of 10 short and snappy health films was added to the expanding brand activity. They are available in eight languages and cover top tips on avoiding stress, stretching before lifting, breathing and relaxation, and the value of healthy sleep, among other topics.

Stage 3: Implementation

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Although getting any type of HR programme to implementation is a huge achievement, it is just as important to monitor and measure the results: participation rates tell one side of the story, but outcomes are arguably more instructive. Developing credible case studies that can genuinely engage employees are also incredibly valuable, as KONE learnt once “Elevate your health” was up and running in the US. The company now has at least five years’ worth of results to draw on and has been able to demonstrate the programme’s many positive effects to the wider business.

US employees have been incentivised to participate in “Elevate your health” through a medical premium discounts and reward scheme. A number of outstanding outcomes have resulted; for example, KONE’s medical claim costs have been below national trends for the last five years, and the cost of claims has remained static for the past two years.

Incentives have also encouraged 90% of US staff to take part in biometric screening, which can facilitate the early detection of life-limiting diseases such as cancer. Other gains include 61% of high-risk employees improving their health scores, an increasingly active workforce (56% are using pedometers) and overall improved employee engagement.

There have been many positive results across all of KONE’s international operations — another testament to its policy of “thinking global, acting local”.

At a national level, supported by Mercer’s expertise in benefits broking, the company has been able to control costs more effectively and thereby make financial savings equivalent to millions of euros. Furthermore, processes are running more smoothly, saving time and resources. In some cases, employees have enjoyed improved benefits (at no extra cost to the business) and, thanks to a more coordinated corporate approach, have gained better access to dedicated consultants should they require medical attention.

From a global perspective, KONE now has a much clearer grasp on its offering and on how it can be improved where appropriate. The organisation’s scale has been more effectively leveraged, which again has yielded welcome cost reductions. A better understanding of the situation on the ground across its locations has helped the central HR team offer practical support to local units.

In some countries, the programme is now entering its fifth year, and the company now has useful claims data to analyse, which may help identify trends and future challenges in order to help people thrive and reduce absenteeism and maintain productivity levels. During this period, engagement levels and work/life balance have steadily increased and industrial injury rates have significantly decreased.

Stage 4: Optimise and Evolve

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Despite the early success of “Elevate your health”, KONE is not sitting on its laurels: the company hopes that the programme will be expanded to formally link retirement, well-being and other benefits. Additional potential impact areas, such as M&A and talent, will also be looked at in more detail as the framework evolves. Whatever direction the future developments take, however, KONE can now rely on having a structured, evidence-based benefits programme in place to drive engagement and productivity rather than the complex, hide-bound systems operating at many other multinationals.

According to the Mercer/World Economic Forum Talent Barometer, only 31% of organisations measure the outcome of their health and well-being programmes. They may well be missing a trick, as successful initiatives can have an extensive range of positive outcomes for both employer and employee, as KONE has discovered.

Stage 5: Widen Activity

Employee engagement

is up 10%

Since 2010:

Staff who agree that their job enables them to balance their work and

personal life up by 10%

Frequency of industrial

injuries is down by 3.4%

ABOUT THE AUTHORS

Andrew Pilbeam is head of Performance and Reward for KONE Corporation.

Wolfgang Seidl leads Mercer’s Workplace Health Consulting practice. Based in London, he can be reached at +44 20 7178 5592 or wolfgang.seidl@mercer.com.

Mercer Marsh Benefits is a service provided by Mercer Ltd, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 984275. Registered Office: 1 Tower Place West, Tower Place, London, EC3R 5BU.

Marsh Ltd is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No. 1507274. Registered Office: 1 Tower Place West, Tower Place, London EC3R.

Copyright 2016 Mercer LLC. All rights reserved.

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