By Sarah Sipek
Sep. 4, 2014
Wellness and employee assistance programs tend to follow industry, and according to the United Nations Conference on Trade and Development, foreign industry is moving into developing economies.
Eastern Europe is one of those economies.
Foreign investors couldn’t be coming at a better time, at least in terms of the well-being of employees. With Europe still in the midst of an economic crisis, governments across the continent have been making budget cuts. Wellness programs, which are traditionally provided by the state, were among the first to go.
“There is a budget problem in Europe, so the government will not spend as much on these issues as they used to,” said Dirk Antonissen, CEO of ISW Limits, a wellness program provider headquartered in Leuven, Belgium. “The influence of U.S.-based multinationals coming in is also driving other companies doing these kinds of initiatives in the field of employee assistance.”
The region has been slowly positioning itself as a favorable environment for foreign business since it began transitioning from state-controlled to an open, free-market economy in the early 1990s. According to a report on the economic growth in Central and Eastern Europe by the McKinsey Global Institute, a business and economics research firm, at 18 percent, the region boasts the lowest corporate income tax rate of any foreign market.
Given the appealing tax incentives, an educated workforce and inexpensive pay rates — the hourly wage of Eastern European workers is 75 percent less than their Western European counterparts — it’s not surprising that companies such as financial-services company UniCredit Group and tech giant Hewlett-Packard Co. have set up shop in Poland. The U.N. report also states that Eastern Europe’s outsourcing and offshoring industry is growing at twice the rate of India’s.
But rolling out a wellness program in Europe is not as simple as carrying over U.S. practices. The region has its own unique set of health concerns that are heavily influenced by the struggling economic situation.
“If you look at the top health risks driving organizational wellness strategies, there is a difference between Europe and the United States,” Antonissen said. “In the U.S. it’s more physical activity or exercise. Stress, psychosocial — the well-being of employees in the work situation is really something that most organizations and companies in Europe are concerned with.”
Unlike in the U.S., where it is often assumed that a company’s workforce will benefit from nutrition and exercise, wellness programs initiated in Eastern Europe must start on the ground floor. Antonissen said that employee assistance programs, which typically focus on mental well-being, are not culturally part of the well-being services in Europe. Therefore, extensive audits must be performed to flesh out company-specific wellness issues.
The best thing that a company expanding to the region can do is leave all assumptions at home and take the advice of locals, said Matt Mollenhauer, vice president of operations at Chestnut Global Partners, a wellness provider that is partnered with ISW Limits.
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