IBISWorld Industry Report OD4128 Corporate Wellness...

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2 About this Industry 2 Industry Definition 2 Main Activities 2 Similar Industries 2 Additional Resources 3 Industry at a Glance 4 Industry Performance 4 Executive Summary 4 Key External Drivers 5 Current Performance 7 Industry Outlook 9 Industry Life Cycle 11 Products & Markets 11 Supply Chain 11 Products & Services 13 Demand Determinants 14 Major Markets 15 International Trade 16 Business Locations 18 Competitive Landscape 18 Market Share Concentration 18 Key Success Factors 18 Cost Structure Benchmarks 20 Basis of Competition 20 Barriers to Entry 21 Industry Globalisation 22 Major Companies 22 Medibank Private Limited 23 Recovre Holdings Pty Limited 23 BUPA Asia Pacific Pty Limited 25 Operating Conditions 25 Capital Intensity 26 Technology & Systems 26 Revenue Volatility 27 Regulation & Policy 27 Industry Assistance 29 Key Statistics 29 Industry Data 29 Annual Change 29 Key Ratios 30 Jargon & Glossary IBISWorld Industry Report OD4128 Corporate Wellness Services in Australia August 2013 Sebastian Chia Health and wealth: Government promotion of workplace wellbeing supports industry growth www.ibisworld.com.au | (03) 9655 3881 | [email protected]

Transcript of IBISWorld Industry Report OD4128 Corporate Wellness...

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2 About this Industry2 Industry Definition

2 Main Activities

2 Similar Industries

2 Additional Resources

3 Industry at a Glance

4 Industry Performance4 Executive Summary

4 Key External Drivers

5 Current Performance

7 Industry Outlook

9 Industry Life Cycle

11 Products & Markets11 Supply Chain

11 Products & Services

13 Demand Determinants

14 Major Markets

15 International Trade

16 Business Locations

18 Competitive Landscape18 Market Share Concentration

18 Key Success Factors

18 Cost Structure Benchmarks

20 Basis of Competition

20 Barriers to Entry

21 Industry Globalisation

22 Major Companies22 Medibank Private Limited

23 Recovre Holdings Pty Limited

23 BUPA Asia Pacific Pty Limited

25 Operating Conditions25 Capital Intensity

26 Technology & Systems

26 Revenue Volatility

27 Regulation & Policy

27 Industry Assistance

29 Key Statistics29 Industry Data

29 Annual Change

29 Key Ratios

30 Jargon & Glossary

IBISWorld Industry Report OD4128Corporate Wellness Services in AustraliaAugust 2013 Sebastian Chia

Health and wealth: Government promotion of workplace wellbeing supports industry growth

www.ibisworld.com.au | (03) 9655 3881 | [email protected]

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This industry includes companies that primarily provide workplace programs that offer a combination of educational, organisational and environmental activities designed to support behaviour

that is conducive to the health of employees in a business, and their families. This does not include programs designed internally by existing human resources personnel.

The primary activities of this industry are

Education and training provision

Health check provision

Psychology services provision

Fitness and dietary program provision

Health risk assessment provision

Online wellness services provision

Industry Definition

Main Activities

Similar Industries

Additional Resources

IBISWorld writes over 500 Australian industry reports, which are updated up to four times a year. To see all reports, go to www.ibisworld.com.au

The major products and services in this industry are

Education and training

Health and fitness programs

Health risk assessments and health checks

Psychology programs

About this Industry

Q8599 Blood Bank Operation in AustraliaCompanies in the industry are mainly engaged in providing paramedical, nursing, health or blood bank services.

For additional information on this industry

www.aihw.gov.au Australian Institute of Health and Welfare

www.hapia.com.au Health and Productivity Institute of Australia

www.workhealth.vic.gov.au WorkHealth

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Market ShareMedibank Private Limited 20.0%

Recovre Holdings Pty Limited 15.4%

BUPA Asia Pacific Pty Limited 15.1%

Key External DriversCapital expenditure by the private sectorHealth consciousnessTotal number of non-manual employees in the workforceTotal time available for leisure and recreationSport participation

Key Statistics Snapshot

Industry at a GlanceCorporate Wellness Services in 2013-14

Revenue

$134.7mProfit

$11.2mWages

$57.6mBusinesses

39

Annual Growth 14-19

9.2%Annual Growth 09-14

4.8%

Industry Structure Life Cycle Stage Growth

Revenue Volatility Low

Capital Intensity Low

Industry Assistance Medium

Concentration Level Medium

Regulation Level Light

Technology Change Medium

Barriers to Entry Low

Industry Globalisation Low

Competition Level Medium

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 29

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Revenue vs. employment growth

Establishments

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2%ACT

28%NSW

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16%QLD

6%WA

3.5%SA

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Key External Drivers Capital expenditure by the private sectorCorporate wellness services are considered a non-essential expense, and expenditure on corporate wellness is largely affected by private capital expenditure. Capital expenditure by the private sector is expected to grow

strongly over 2013-14, with a more stable business environment forecast following the election.

Health consciousnessThe more health conscious the population, the greater the demand for

Executive Summary

The Corporate Wellness Services industry is in good health. The industry has recorded robust growth over the past five years as companies and governments have recognised the benefits of promoting health and wellbeing in the workplace. A wealth of research conducted during the past decade has shown that investing in employees’ health and wellbeing can have enormous benefits in terms of reducing costs associated with absenteeism and injury, and boosting productivity. Growth in the industry has also been driven by government programs that check the health of employees and promote healthier lifestyles.

During 2013-14, the industry will again receive a clean bill of health as businesses’ desire to boost productivity and government programs and grants underpin revenue growth of 7.4% to $134.7 million. IBISWorld estimates industry revenue will rise at an annualised 4.8% over the five years through 2013-14. Despite a weak period in the economy, corporate wellness

services have benefited from the structural shift towards professional services, which provides an environment that is not typically active.

The industry is expected to remain in good shape during the five years through 2018-19. Government programs and grants designed to promote healthier lifestyles among employees will underpin industry growth, particularly in Victoria, although other states are expected to follow suit. The industry will benefit as strengthening economic conditions and a desire to boost productivity encourage businesses to invest in corporate wellness. The continuing shift from blue-collar to white-collar professions in Australia and an upturn in the finance and insurance sector will also support investment. Online delivery of wellness services such as fitness and dietary programs and health and fitness monitoring is forecast to expand over the next five years. IBISWorld forecasts industry revenue will grow at an annualised 9.2% over the five years through 2018-19 to reach $208.7 million.

Industry PerformanceExecutive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage

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Industry Performance

Current Performance

The Corporate Wellness Services industry is in a healthy state. During the past decade, the industry has recorded stellar growth as businesses and governments have realised the benefits of promoting health and wellbeing in the workplace. During 2013-14, the industry will continue to perform well as businesses seek to boost productivity and as government programs and grants drive demand. This is expected to drive revenue growth of 7.4%. IBISWorld estimates industry revenue will rise at an annualised 4.8% over the five years through 2013-14, to $134.7 million.

The industry has grown strongly during the past five years, weathering the downturn better than most. The industry boomed during the early to mid-2000s, with revenue growing at

double-digit rates as employers invested in their employees’ health and wellbeing. During 2008-09 and 2009-10, industry revenue growth slowed as

Key External Driverscontinued

corporate wellness services. Participation in dieting, health and fitness programs will increase as people become more knowledgeable about the benefits of healthy lifestyles. The level of health consciousness is expected to continue its upwards trend over 2013-14, representing an opportunity for the industry.

Total number of non-manual employees in the workforceThe largest market for corporate wellness and workplace health services is white-collar (or non-manual) labourers. These include managers, professionals, government employees and salespeople. The total number of non-manual employees in the workforce is expected to continue its upward trend over 2013-14, on the back of a structural shift in the economy towards services.

Total time available for leisure and recreationA lack of available time is a primary constraint on the pursuit of health and fitness activities. Corporate wellness activities such as educational classes or fitness programs may take place outside

of work hours and must be undertaken during an employee’s leisure time. Spending on corporate wellness thus tends to be positively correlated with availability of leisure time. A threat looms in the near future as the economy recovers and businesses demand more labour. However, the total time available for leisure and recreation is expected to rise over 2013-14, in line with a growing casualisation of the workforce and an increasing amount of baby boomers leaving the workforce.

Sport participationThe level of sport participation is a proxy for the trend towards leading a more active life and an increasing focus on physical health. Increasing sport participation means people are more active, seeking to improve fitness or spend more time outdoors. Employers looking to improve employee happiness and productivity will therefore invest in corporate wellness services if sport participation rates grow. The level of sport participation is expected to fall in 2013-14, following a particularly high rate in 2012-13 due to a large number of sporting events.

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Industry Performance

Current Performancecontinued

weak business confidence and fears of a deep recession led many businesses to cut spending following the financial crisis and ensuing global economic downturn. The industry was shielded from the worst of these effects due to government subsidies designed to promote health and productivity. Many businesses also chose to prioritise spending on health and wellbeing due to productivity benefits.

The industry has since recovered, recording robust rates of growth given the generally weak economic climate. This performance has been driven by the rollout of government health programs,

including the national Healthy Workers Initiative and the Victorian WorkHealth initiative. Growth has been supported by rising awareness of the benefits to employers of encouraging health and mental wellbeing among their workforce. The trend has also been underpinned by an ongoing shift in the Australian labour force, away from blue-collar industries like manufacturing and towards white-collar service industries. Booming conditions in the resources sector have aided industry growth, as miners invest heavily in the health and lifestyle of employees as a way of retaining workers in a tight labour market.

Rising health awareness

Growth in the industry during the past five years has been driven by rising awareness among businesses and governments of the importance of promoting health and wellbeing in the workplace. This has mirrored a general trend of rising health awareness across the population. Businesses in Australia have lagged those in other countries such as the United States, where they are directly responsible for employees’ health needs.

During the past decade, academic research and media attention have focused on the rising incidence of chronic disease in Australia. The 2004-05 National Health Survey, for example, found that about 33.0% of Australians aged between 25 and 64 years suffered from a chronic disease. Other research has found that the incidence of chronic diseases, including cardiovascular disease, cancer, diabetes and mental

illness, has increased significantly. While the ageing of the population has contributed to this, health authorities also blame lifestyle factors such as physical inactivity, alcohol consumption and poor diet. A study by Medibank Private in 2005 estimated the cost of absenteeism in the workplace to be $7.0 billion per year, while the cost of presenteeism (not performing a job fully due to injury or illness) was estimated at $26.0 billion per year. As a result, businesses have come to view promoting health and wellbeing in the workplace as an effective way of reducing these costs and boosting productivity. The economic downturn – which focused employers’ attention on costs and profitability – has exacerbated this trend. Changes to industrial relations laws since the introduction of the Fair Work Act have also led businesses to focus on productivity.

Government support Interest in health and wellbeing has also been rising at the government level. As well as increasing costs for employers, the rising incidence of chronic disease imposes a burden on the health system and the public purse. Governments have responded by allocating funds to promoting health and wellbeing in the workplace.

The Victorian Government has led the way through its Victorian WorkHealth initiative. Since the program’s inception in 2008-09, more than 550,000 employees have received free health checks. The government has also supported the introduction of workplace health promotion programs and offered grants of up to $10,000 for further

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Industry Performance

Government supportcontinued

workplace wellbeing programs. This has been a key driver of growth for industry participants during the past five years.

During 2008-09, state and territory governments agreed to spend $289.4 million on the Healthy Workers Initiative. The money will be spent

between 2010-11 and 2014-15 on promoting health in the workplace through a number of programs designed to modify unhealthy lifestyle factors such as smoking, high alcohol consumption, physical inactivity and poor diet.

What the doctor ordered

The industry will go from strength to strength over the next five years as the attention of corporate Australia and governments remains focused on health and wellbeing. Early in the period, businesses are expected to invest in wellness programs to minimise the costs of absenteeism and presenteeism. As the economic climate improves, returning business confidence and rising corporate profit levels are likely to lead businesses to increase their investment in health and wellbeing programs, supporting demand

for higher value services like fitness and diet programs. Growth will also strengthen due to upturns in the key finance, insurance and business services sectors as they hire more staff and further boost demand for industry services.

The industry will benefit from the ongoing rollout of government programs designed to promote health in the workplace. The Victorian Government’s WorkHealth initiative has committed to check the health of every employee in the state. With only 550,000 of the state’s 2.9

Industry Outlook

The Corporate Wellness Services industry is expected to remain in good shape over the next five years. The ongoing rollout of government initiatives designed to promote health and encourage businesses to reduce absenteeism and boost productivity will underpin robust

demand for corporate wellness services. Structural changes in the labour force also bode well for industry participants. IBISWorld forecasts industry revenue will grow at an annualised 9.2% over the five years through 2018-19, to reach $208.7 million.

Profit and enterprises As befits an industry in the growth stage of its life cycle, industry profitability has been strong and enterprise numbers have demonstrated robust growth during the past decade. While profitability has fallen slightly due to rising wages, margins have been supported by rising demand for industry services. Increased awareness of the benefits of promoting health in the workplace and the introduction of government programs and grants have been instrumental in propelling industry growth over the past five years. Wages have risen as the suite of services being offered has widened and more specialist healthcare practitioners such as doctors, physiotherapists and dietitians have

been hired. As a result, the average wage has increased from about $50,000 to over $59,000 during the past 10 years. The trend to offer services online increased costs initially, but is expected to improve profitability over the next five years. The number of enterprises in the industry has increased from 21 to 39 over the past 10 years as new players have entered the industry.

Industry profit margins have been supported by growth in demand

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Industry Performance

What the doctor orderedcontinued

million workforce checked as of 2012-13, there is substantial room for growth over the next five years. Workplaces that have carried out the health checks are eligible for government grants to subsidise educational and fitness programs, providing further demand for industry operators. Other states are expected to follow Victoria’s lead over the next five years. The industry will be bolstered by the $289.4 million Healthy Workers Initiative, due to be spent between all states and territories from 2010-11 through 2014-15 on programs promoting health in the workplace.

Demand for industry services will be

underpinned by forecast growth in white-collar jobs. During the past 20 years, traditional sectors like manufacturing and agriculture have gradually been displaced by the services sector. IBISWorld expects strong growth in the white-collar industries such as finance and insurance, business services and the government sector during the next five years. Firms in these industries are more likely to have the capital and motivation to invest in corporate wellness programs and services. Strong forecast growth in the mining and energy sectors should also support demand for industry services.

Profit and enterprises Profitability is forecast to grow over the next five years as demand for industry services strengthens and the government continues to support the industry. Wages, which will remain by far the largest expense for operators, will rise as more specialist healthcare practitioners are hired. However, this will be more than

offset by rising revenue. Strong growth in the use of online delivery services such as dietary advice and fitness programs will also support profitability. Enterprise numbers are forecast to grow as new firms enter the industry, but consolidation is expected to increase in the longer term.

Online delivery growth

Online delivery of some industry services is forecast to demonstrate healthy growth over the five years through 2018-19. Most industry participants offer a range of wellness services online, including the provision of dietary and fitness programs, training schedules, online seminars and webinars, health monitoring and post-consultation advice. The major benefits of offering services online are increased accessibility and lower costs for both providers and clients.

Online services are typically designed to work in conjunction with those

delivered on-site. They could include initial health and wellness scores and online bookings for appointments, followed by health checks performed on-site by professionals. Online delivery also appeals to employees who may be more comfortable discussing personal issues of health and fitness online rather than in person. This segment will be boosted by the construction of the National Broadband Network, which will increase broadband speeds. In addition, access for rural towns is expected to increase the industry’s client base.

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Industry Performance

The industry is growing at a much faster rate than the wider economy

New firms are entering the industry

Business and societal trends are supporting growth

Life Cycle Stage

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DeclineShrinking economicimportance

Quality GrowthHigh growth in economic importance; weaker companies close down; developed technology and markets

MaturityCompany consolidation;level of economic importance stable

Quantity GrowthMany new companies; minor growth in economic importance; substantial technology change

Key Features of a Growth Industry

Revenue grows faster than the economyMany new companies enter the marketRapid technology & process changeGrowing customer acceptance of productRapid introduction of products & brands

Blood Bank Operation

Printing

Business ServicesComputer System Design Services

Health Services

Corporate Wellness Services

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Industry Performance

Industry Life Cycle The Corporate Wellness Services industry is in the growth phase of its life cycle. Industry value added is forecast to grow by an annualised 7.0% over the 10 years through 2018-19, compared with annualised growth in GDP of 2.5%. This indicates that the industry is growing at a much faster pace than the overall economy.

Industry growth will be supported by businesses’ desire to reduce costs associated with absenteeism and injury. Given the weak economic climate, businesses have also become increasingly focused on boosting productivity and increasing profitability. Corporate

wellness services providers have been emboldened by government spending on workplace health checks and programs designed to encourage healthier lifestyles. The Victorian Government has led the way during the past five years, but IBISWorld expects other states and territories will introduce similar programs over the next five.

There has also been strong growth in enterprise and establishment numbers in the industry over the past five years, as robust growth in revenue and profit has enticed new players to enter the industry. These trends are expected to continue over the five years through 2018-19.

This industry is Growing

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Products & Services The Corporate Wellness Services industry sources the majority of its revenue from health risk assessments and employee health and fitness programs. Health risk assessments are a quick and simple way of giving employees feedback on their level of health and giving them direction on how to improve their health. Health and fitness programs are growing in popularity and provide a more in-depth program designed around a fitness program or diet, or both. Education and training services are another increasingly popular choice, offering education relating to mental and physical health, exercise and workplace safety. Some workplaces also offer psychology services to employees.

Education and trainingA simple and popular form of corporate wellness or workplace health is provided within the education and training segment. This may involve workplace seminars or expos, or office campaigns designed to increase employee health awareness and encourage physical activity and healthy eating. These may

also cover job-specific safety issues such as manual handling training. This segment is fairly stagnant – it is gaining in popularity, but is not growing at a faster rate than the industry, and is thus maintaining a steady proportion of industry revenue. This segment could grow in the next five years as the trend of outsourcing training processes continues.

Health risk assessments and health checksWorkplace health assessments are an evaluation of an employee’s physical condition, assessing disease risk and their overall level of health and fitness. The thoroughness of these assessments can vary and they may be carried out by a nurse or doctor, or completed via a questionnaire. Topics such as diet, level of exercise, height, weight, family history, stress perception and metrics such as blood pressure and cholesterol may all be covered. From this data, a fitness program or diet may be designed, the employee may receive a response with a risk score or rating, or they may be referred to a doctor.

KEY BUYING INDUSTRIES

K Financial and Insurance Services The finance sector employs a large proportion of Australia’s white-collar labour force. Given that the nature of most jobs in the sector is not physical, employers invest in corporate wellness programs to promote worker health.

M6900 Business Services in Australia Firms that employ white-collar professionals such as accountants, consultants, real estate agents and developers, and legal service providers are a major market for corporate wellness services.

KEY SELLING INDUSTRIES

C1611 Printing in Australia Corporate wellness firms require printing services for the production of pamphlets, booklets and other printed educational material that is distributed to their clients.

M7000 Computer System Design Services in Australia Corporate wellness firms buy software that is then provided to clients. This software is used to deliver exercise programs, health checks and educational material online.

Q8400 Health Services in Australia The health sector provides the services of doctors, nurses, dietitians and psychologists to the Corporate Wellness Services industry.

X0025 Fitness in Australia The Fitness industry provides services from gym instructors and personal trainers.

Products & MarketsSupply Chain | Products & Services | Demand Determinants Major Markets | International Trade | Business Locations

Supply Chain

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Products & Markets

Products & Servicescontinued

The popularity of workplace health assessments has been bolstered by research into Australia’s health industries, specifically workplace health. Victoria has been a national leader in this area, initiating the WorkHealth program in 2008. This program is designed to use the workplace as a medium for delivering preventative health care. Through the WorkHealth initiative, the Victorian Government has committed funds to subsidise a health check for every Victorian employee. In a March 2012 report, WorkHealth found that 400,000 Victorian workers had received a health check between July 2009 and October 2011. Although Victoria is the only state that has gone to such lengths to encourage workplace health checks, this segment is expected to have grown in popularity over the past five years, increasing its share of overall industry revenue. This trend will continue as other states adopt similar initiatives to boost productivity.

Health and fitness programsHealth and fitness programs involve a program being designed to address weight loss, healthy eating or general fitness. The popularity of these programs has boomed in the past five years, resulting from a combination of increased health awareness and government encouragement of workplace

health and safety. The links between employee health and workplace productivity and absenteeism have been well researched. Investment into increasing the physical and mental health and wellbeing of employees can be paid back with interest in increased productivity, reduced sick days and a higher sense of loyalty towards an employer perceived to have an interest in their employees’ health. Innovation in this area has benefited the segment, with programs such as Pilates and yoga providing an alternative to using a gym. Corporate wellness providers have embraced new trends in fitness and exercise and have designed workplace programs accordingly.

An increasing proportion of corporate health and fitness programs are being offered online as opposed to in person in the workplace. Others are a combination of face-to-face and online delivery. Some industry operators now offer online programs that allow employees and employers to log in and view a pre-designed fitness regime or diet. The combination of innovative delivery mediums, a trend towards increased health awareness and government encouragement has resulted in this segment growing faster than the industry as a whole over the past five years, and increasing as a share of industry revenue.

Products and services segmentation (2013-14)

Total $134.7m

44.5%Health and fitness programs

38%Health risk assessments

and health checks

10.5%Education and training

4%Psychology programs

3%Other

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Products & Markets

DemandDeterminants

Companies are increasingly demanding corporate wellness and workplace health programs in an attempt to increase worker productivity and attract and retain high-quality labour. Corporate wellness is also being promoted as an investment, as increased productivity and reduced absenteeism can pay a healthy return. Demand is affected by health consciousness, and more specifically the link between a healthy employee and a productive employee. As more research is conducted into the area, private businesses and governments are realising the benefits of good mental and physical health in the workplace, driving demand for corporate wellness services. Australia is in the midst of a shift towards increased health consciousness and a growing focus on dietary and exercise concerns. Industries such as the Corporate Wellness Services industry offer a way for an organisation to address this growing trend and increase employee satisfaction.

Demographic and structural changes within the Australian labour force influence demand. Corporate wellness services are demanded more by white-collar organisations, such as insurers, accountancies and banks, as opposed to blue-collar companies. They are also targeted more towards these organisations, as office workers are more inclined to adopt a physical activity outside of a non-physical job. Higher

educated white-collar workers are a larger investment for employers and are paid a higher wage. Employers are thus willing to spend a greater amount per head on corporate wellness services for these employees. As the proportion of non-manual labour grows (compared with manual labour), the market for corporate wellness services also grows.

Business cycle trends and the subsequent level of capital expenditure affect demand for industry services. Corporate wellness services are seen by some organisations as a luxury afforded employees to increase satisfaction, loyalty and retention rates. Therefore, when an economic downturn occurs and costs need to be cut, corporate wellness services can be among the first to go. Even firms that consider these services an investment that will pay back in productivity gains may choose to cut them from the expense sheet.

IBISWorld expects that government assistance will become a greater demand determinant in the next five years. Victorian workplaces are currently being subsidised for implementing health checks and health programs for their employees. This increases demand for corporate wellness services, as it effectively makes them cheaper for the employer. More states are expected to adopt similar encouragement programs, which will benefit the industry.

Products & Servicescontinued

Psychology and other servicesWorkplace psychology services include sessions or seminars offered to employees (and sometimes to direct family members) either in person or online. These programs are used for stress management, employee coaching, psychological assessments and workplace resistance training. Investment in psychology services offers a potentially high return on investment, as stress is a major cause of productivity loss and absenteeism among Australian employees and a psychology program can address this issue. Corporate

psychology services form a significant industry segment. However, relative to the other industry segments, they are shrinking in proportion amid the boom in popularity of workplace health and fitness programs and health and safety checks.

Corporate wellness services may cover more job-specific or niche services, such as stress management, smoking cessation, ergonomics or safety training and assessment tailored to specific workplaces. Alternative therapies may also be offered as part of a corporate wellness program.

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Products & Markets

Major Markets Corporate wellness services are primarily aimed at white-collar, corporate office workers, or non-manual labourers. Many industry players are targeting white-collar employers, who are willing to invest more money per capita than blue-collar employers. However, government initiatives are aimed at having all workers health checked, which means other industries will take part in the growth of corporate wellness. Thus, the largest markets for the industry’s services are the government and finance and insurance sectors. Many industry players have establishments located in CBDs to ensure proximity to their preferred markets.

White-collar businessesWhite-collar markets comprise mainly the business services sector and the finance and insurance sector. The business services sector comprises real estate operators and developers, engineers and specialist consultants and business functionaries such as accountants and legal service providers. The finance and insurance sector provides another large market for corporate wellness services. This sector holds many of Australia’s largest and most successful businesses. These firms have large budgets and given the nature of the work means it is generally conducted indoors, staff are more motivated to enter a fitness program

either during lunch hours or after work. Given that many industry participants are located in CBDs, they can send staff to offices to hold a program.

GovernmentThe government sector houses much of the remainder of Australia’s white-collar workforce and provides the second-largest market for corporate wellness services. This segment was partly shielded from the economic downturn given that Australian government budgets were all in healthy condition and remained so throughout the period. No large-scale cost cutting occurred and government employees retained many of their benefits. Additionally, the Federal Government has commissioned research into corporate wellness and pinpointed it as a potential area to increase national labour force productivity. Therefore, the government is obliged to adopt corporate wellness and workplace health services for employees to lead by example and encourage the private sector to follow suit.

Blue-collar businessesMining and manufacturing markets, though constituting large amounts of Australia’s labour force and considered among the unhealthiest of Australian workers, do not represent the largest market for corporate wellness services. A March 2012 study by WorkHealth

Major market segmentation (2013-14)

Total $134.7m

54%White-collar businesses

22%Government

14%Blue-collar businesses

10%Other

SOURCE: WWW.IBISWORLD.COM.AU

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Products & Markets

International Trade International trade is not relevant to this industry.

Major Marketscontinued

Victoria found that male and female blue-collar workers had a 21.0% and 28.0% increased risk of high waist circumference, respectively. The prevalence of cardiovascular disease is also much higher for blue-collar workers. While companies in this market invest heavily in health and safety campaigns, the safety component tends to receive far

more attention, given that injuries from poor safety conditions can be extremely serious and fatalities can occur.

Other markets for corporate wellness services include the agriculture, construction, retail, health and transport sectors. These sectors are small and remain a fairly stable market in terms of proportion of revenue.

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Products & Markets

SOURCE: WWW.IBISWORLD.COM.AU

TAS1.0

WA6.0

QLD16.0

VIC42.5

NSW28.0

NT1.0

SA3.5

ACT2.0

Establishments (%)

Cold Zone (<10) <25 <50 Hot Zone (<100) Not applicable

Business Locations 2013-14

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Products & Markets

Business Locations Businesses in the industry are skewed towards the eastern states of Victoria, New South Wales and Queensland. Much of the industry’s revenue is earned in CBDs, as white-collar and government workers are the major target markets. Many of the industry players that operate nationally have established premises close to finance hubs and office buildings, as industry activities are often held within or near the client company’s office space.

WHITE-COLLAR STATESMelbourne houses several large players in the industry and the head offices of many manufacturing and business services firms. While the potential market is not as a big as New South Wales, Victoria has benefited from a high level of industry assistance from WorkSafe and Victorian Government initiatives. New South Wales is the financial capital of Australia. Sydney houses many of Australia’s largest banks, insurance companies and auditing firms. Given that the finance and insurance sector is the largest market for corporate wellness services, New South Wales houses a significant proportion of industry participants. Queensland is one of Australia’s fastest growing states due to the resources boom, and many Queensland-based companies have grown their profit as a result. New South Wales, Victoria and Queensland together account for 86.5% of industry revenue.

RESOURCE BOOM SHIFTS DEMANDWestern Australia is the next-biggest state, accounting for 6.0% of revenue. Although this is a small share, WA businesses are benefiting greatly from the resources boom. Population growth is the fastest in this state, corporate profit is high and demand is strong. Higher profit margins mean more spending on items that may be considered luxuries, such as corporate wellness services. There is a growing trend towards corporate wellness services being demanded in Western Australia, while the eastern states maintain strict budgets and expense cutbacks.

Perc

enta

ge

50

0

10

20

30

40

WA

ACT

NSW N

T

QLD SA TA

S

VIC

EstablishmentsPopulation

Distribution of establishments vs. population

SOURCE: WWW.IBISWORLD.COM.AU

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Cost Structure Benchmarks

Industry profitability is forecast to decline over the 10 years through 2018-19. During the five years through 2013-14, profit has been declining due to rising wages. However, profit margins are expected to have stabilised and will be supported by rising demand for industry services due to increased awareness of the benefits of promoting health in the workplace, and the introduction of government programs and grants supporting industry services. Industry profitability will rise marginally over the next five years as demand for corporate wellness services strengthens and the government supports the sector.

WagesWages are the major cost item for the industry. Wages as a percentage of revenue have increased during the past five years as the range of services being offered by participants has expanded and more specialist healthcare practitioners such as doctors, physiotherapists and dietitians have been hired. The average wage in the industry has increased from about $50,000 to over $59,000 during the past 10 years.

Technology will increasingly allow wellness programs to be carried out without the need for face-to-face interaction. Nonetheless, screenings and

Key Success Factors Easy access for clientsCorporate wellness services need to be easy to access, given that employers do not want to eat into work hours. This means corporate wellness service providers should be located close to target markets and should be able to travel to workplaces.

Access to highly skilled workforceDelivery of corporate wellness services must be conducted by a qualified teacher, trainer or medical practitioner.

Having a good reputationIndustry competition is growing quickly. Having a good reputation will ensure high satisfaction, repeat business and recommendations through word of mouth.

Ability to quickly adopt new technologyThe industry delivers services both on-site and online. Adopting new technology such as software or hardware can improve the delivery process and reduce labour costs.

Market Share Concentration

The Corporate Wellness Services industry is expected to have a medium level of market share concentration. The top four players are estimated to account for more than half of industry revenue. The industry comprises a fairly large number of small and medium-size businesses. Barriers to entry are low and the industry is growing. This means more small players are entering the industry and existing small players are growing to become medium-size firms by expanding geographically and in terms of the number of services offered.

There has been little consolidation in

the industry and although some players dominate niche segments or niche markets, no player dominates the industry nationally. However, in 2010 UK-based health services giant BUPA acquired major industry player PEAK to expand into the industry. Additionally, global employment services firm Ingeus has expanded its Australian operations with the acquisition of psychology services provider Assure. Thus, although concentration is considered low, it is increasing. Australian-owned Recovre Group has also been busy, acquiring Active Work Solutions and Medico Legal Opinions.

Competitive LandscapeMarket Share Concentration | Key Success Factors | Cost Structure Benchmarks Basis of Competition | Barriers to Entry | Industry Globalisation

Level Concentration in this industry is Medium

IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:

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Competitive Landscape

Cost Structure Benchmarkscontinued

health evaluations will continue to require healthcare practitioners to measure blood pressure, cholesterol and other health conditions.

PurchasesPurchases account for 18.1% of revenue. Advancements in technology during the past five years have increased the cost of purchases. Purchases include computer software, medical equipment, educational materials to help participants in the programs, materials required for workshops and seminars, fitness equipment and uniforms.

Rent and depreciationDepreciation is relatively low, representing about 2.5% of industry revenue. Capital expenditure requirements in the industry are quite low, with investment spread across a range of items including fitness and medical equipment. Rent represents about 2.3% of revenue. Operators tend to

rent offices in proximity to major clients in CBDs. Some providers also rent health and fitness equipment.

OtherIndustry operators incur a variety of other expenses, such as staff training and development to keep their programs up to date with the latest health trends and research, marketing materials to promote their services, and fees for legal and accounting work. Insurance also makes up a small part of costs. Marketing is a significant cost item for the industry, accounting for 10.5% of revenue. Services are targeted at corporate clients so wellness services providers invest heavily in branding, market research and website development. As participants in the industry need to service clients, often at work, travelling expenses are another noteworthy cost. While these costs are rising, they have fallen as a percentage of total costs due to the strong growth in wages.

Sector vs. Industry Costs

■ Profi t■ Rent■ Utilities■ Depreciation■ Other■ Wages■ Purchases

Average Costs of all Industries in sector (2013-14)

Industry Costs (2013-14)

0

20

40

60

Perc

enta

ge o

f rev

enue

80

100

26.7

17.1

20.6

22.4

10.40.62.2

8.3

18.1

42.8

25.0

2.5 1.02.3

SOURCE: WWW.IBISWORLD.COM.AU

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Competitive Landscape

Barriers to Entry Barriers to entry for the industry are estimated to be low and increasing. Skills required to operate a business range from minimal, such as a personal trainer, through to a highly educated doctor or physician. There is no legislation constraining corporate wellness services. In fact, it is being encouraged through government initiatives.

Capital required to start a corporate wellness business is not necessarily substantial, depending on the size of the business a new entrant may wish to

target and the scope of services they wish to offer. A new entrant aiming to start a niche business specialising in a certain segment may be able to start a sole proprietorship and operate with minimal technological and fitness equipment. Additionally, no player controls a dominant portion of the industry.

The life cycle of the industry contributes to the ease with which a new entrant can become established. The industry is in a growth phase of its

Basis of Competition Participants in the Corporate Wellness Services industry face competition on the basis of price, brand, reputation, service quality, program flexibility and specialist service providers. Competition in the industry is at a medium level, and the trend is increasing. The industry is far from saturated, with no players dominating the industry to an extent that significantly affects the market. Given the growth rate of the industry and only low barriers to entry, it is no surprise that competition is growing rapidly.

Internal competitionCompetition can be based on the cost- and time-effectiveness of a corporate wellness service. A corporate wellness firm that can use software effectively to assist with delivery of the program will be more attractive to employers, which are seeking to promote workplace health in a cost- and time-effective manner. Some industry players have in-house IT teams that design software to be provided alongside onsite services. These companies can gain a competitive advantage over rivals if their software is cheaper, easier to use and more engaging.

Price is an important basis of competition. Given the current economic climate, employers will look to spend as little as possible on services that may be considered a luxury for employees. However, many corporate wellness firms do not compete on price. Instead, they advertise the fact that corporate wellness

services are an investment that can be used to increase worker productivity and retention, providing a positive return on investment and effectively alleviating financial stress in a poor business environment. These firms compete on the basis of the effectiveness of their program and the level to which employees adopt and adhere to it. This leads to brand positioning and marketing as a basis of competition.

External competitionOther industries are also taking advantage of the trend towards increased health consciousness among Australians, and these industries represent external competition. Gyms, fitness clubs, sports organisations and personal trainers all provide services that compete directly with corporate wellness services. An employer can just as easily go to a local gym or personal training studio and negotiate a group rate to allow their employees access to services, which are a substitute for corporate wellness services.

Medical services provided by the industry, such as health risk assessments, psychological assessments, massage, physical therapy and diet plans, can be substituted by the respective specialist industries to which these services belong. However, a corporate wellness firm typically offers these in a package with other services, often both on-site and online, giving them an advantage in the scope of services offered.

Level & Trend Competition in this industry is Medium and the trend is Increasing

Level & Trend Barriers to Entry in this industry are Low and Increasing

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Competitive Landscape

Industry Globalisation

Industry globalisation is at a low level, with several key industry players owned by overseas operators. BUPA and Ingeus Limited both operate globally. However, this does not affect the performance of local subsidiaries. BUPA’s primary

subsidiary in the Corporate Wellness Services industry is PEAK Health Management, an Australian company that was bought by BUPA in 2010. This trend is expected to stay steady over the next five years due to the small size of the market.

Barriers to Entrycontinued

life cycle and demand for corporate wellness services is rising rapidly. Government support has only benefited the industry in Victoria, as the other states have not yet implemented a similar system of subsidised health checks. As more research is released into the benefits of workplace health, it is expected that other governments will encourage corporate wellness services to increase productivity.

Barriers to Entry checklist Level

Competition MediumConcentration MediumLife Cycle Stage GrowthCapital Intensity LowTechnology Change MediumRegulation & Policy LightIndustry Assistance Medium

SOURCE: WWW.IBISWORLD.COM.AU

Level & Trend Globalisation in this industry is Low and the trend is Steady

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Player Performance Medibank Private Limited is an Australian Government business enterprise that primarily operates as a health insurance provider, but also offers health services. The group operates 110 retail stores and 50 clinics around Australia, employing over 4,500 staff. It operates in the Corporate Wellness Services industry through Medibank Health Solutions. Medibank Health Solutions provides healthcare services to businesses and government entities. The company services more than 4,000 corporate clients in Australia and reported consolidated revenue of $278.9 million in 2011. It employs about 1,500 people and is headquartered in Melbourne. On 1 July 2010, Medibank Health Solutions acquired McKesson Asia-Pacific, allowing the company to boost its telephone and web-based health management activities. In the same year, it acquired Carepoint Holdings to expand its occupational health clinics in Australia.

Corporate wellness services fall under the workplace health division. Services include health and wellbeing programs (including an online fitness program called Fitness2Live), injury management and injury prevention. Services for injury management include physiotherapy, psychology services, injury treatment and fitness for duty assessments. Injury prevention services include occupational health consulting,

health surveillance, travel health consulting and pre-employment medical checks. Through Fitness2Live, the company offers 24-hour access to meal and activity plans, motivational material, diet plans, cardio and fitness programs and educational articles.

Financial performanceGiven the size and scope of Medibank’s operations, it is in prime position to use its reach and expertise to promote its operations in the fast-growing Corporate Wellness Services industry. Although limited financial information is available for Medibank’s operations in the industry, IBISWorld expects it is growing its market share and outperforming the industry average in terms of growth.

Major CompaniesMedibank Private Limited | Recovre Holdings Pty LimitedBUPA Asia Pacific Pty Limited | Other Companies

Major players(Market share)

49.5%Other

Medibank Private Limited 20.0%

Recovre Holdings Pty Limited 15.4%

BUPA Asia Pacific Pty Limited 15.1%

SOURCE: WWW.IBISWORLD.COM.AU

Medibank Private Limited – industry segment performance*

YearRevenue

($ million) (% change)

2007-08 1.2 N/C

2008-09 1.8 50.0

2009-10 9.7 438.9

2010-11 14.5 49.5

2011-12 21.7 49.7

2012-13 27.2 25.3

*EstimateSOURCE: ANNUAL REPORT AND IBISWORLD

Medibank Private Limited Market share: 20.0%

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Major Companies

Player Performance BUPA Asia Pacific Pty Limited is part of a global diversified health services provider based in the United Kingdom. The company owns and operates BUPA Wellness, which operates in the industry through PEAK Health Management. BUPA acquired PEAK in 2010.

PEAK was established in 1995 in Melbourne and offers a large catalogue of services to its clients, ranging from health promotional programs, health checks and fitness facilities to online support, coaching and vaccinations. The company also conducts wellness programs to assist clients in managing their health, stress, nutrition, smoking habits and recovery from surgery. PEAK is experienced in the implementation of corporate fitness facilities, offering equipment maintenance and facility management services. The company also runs online

wellness solutions that allow clients to access their progress, schedules, programs, food database and video coach. PEAK operates in all states and territories and also operates medical suites in the Melbourne, Sydney and Brisbane CBDs.

Recovre Holdings Pty Limited – industry segment performance*

YearRevenue

($ million) (% change)

2007-08 14.6 12.9

2008-09 23.9 63.7

2009-10 21.9 -8.4

2010-11 19.9 -9.1

2011-12 20.2 1.5

2012-13 20.7 2.5

*EstimateSOURCE: ANNUAL REPORT AND IBISWORLD

BUPA Asia Pacifi c Pty Limited – industry segment performance**

Year*Revenue

($ million) (% change)

2010 4.7 N/C

2011 17.5 272.3

2012 18.6 6.3

2013 20.4 9.7

*Year end December **EstimateSOURCE: ANNUAL REPORT AND IBISWORLD

BUPA Asia Pacific Pty Limited Market share: 15.1%

Player Performance Recovre Holdings Pty Limited is an Australian-owned private company that provides health and rehabilitation services to businesses, governments and insurers. Recovre provides services in occupational health and safety, corporate health and wellbeing, injury prevention and management, training, education and psychology. The company operates Medico Legal Opinions, which specialises in providing independent medical opinions and assessments for workers’ and accident compensation purposes. Recovre also provides pre-employment medical screenings for the NSW and Queensland police forces. It employs about 343 people.

Financial performanceDuring 2008, Australian fund management and private equity firm Hawksbridge Capital made a substantial investment in Recovre after it made a loss of over $5.0 million in 2006-07. Industry segment revenue is estimated to have grown by 63.7% in 2008-09 before falling by about 9.0% in both 2009-10 and 2010-11 due to weaker

conditions in the regulated market. The company reported improved results in 2011-12, attributable to improved conditions in the NSW regulated market. The company has continued to expand, acquiring Active Work Solutions and Medico Legal Opinions and opening new offices around the country. Over the five years through 2012-13, Recovre is expected to have outperformed the industry.

Recovre Holdings Pty Limited Market share: 15.4%

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Major Companies

Other Companies Unified Healthcare Group Pty LtdUnified Healthcare Group Pty Ltd (UHG) is an Australian private company that offers customised healthcare services to its clients. The company was incorporated when it was granted the contract to conduct pre-employment health assessment for Crown Casino in 1997. It is based in Melbourne.

UHG tailors products to insurers, employers and individuals. The company offers its services under two segments: life insurance and occupational health. The life insurance segment was the first to offer an outsourced medical report filing service. UHG was appointed by CommInsure to provide medical information services, which are used by the company’s insurance advisors, underwriters and customers.

UHG operates in the Corporate Wellness Services industry through its occupational health segment, which offers a mobile health screening service that includes mobile health check-ups, mobile blood tests and ECGs. The company conducts vaccination programs, customised health assessments, 24-hour medical advisory services and productivity management programs. Although financial information is not available for the company, UHG claims to service over 100 private and public sector organisations, making it a significant industry player.

Worklife Solutions Pty LtdWorklife Solutions Pty Ltd, trading as

Healthworks, is an Australian private company that offers customised health and wellness solutions. The company is headquartered in Sydney and has an

office in Melbourne. It offers a wide range of health services including annual health programs, health assessment, consultations, campaigns, seminars, vaccinations and health risk appraisal. The company holds corporate health expos that give employees opportunities to discuss any health issues and to assess their wellbeing. Healthworks is also involved in managing corporate fitness centres and implementing corporate fitness programs.

Ingeus LimitedIngeus Limited is an unlisted public

company involved in assisting welfare-dependent people back into employment. The company operates globally, with more than 150 office locations around the world. The company began its operation in 1989 in Australia and is headquartered in Brisbane. It has refocused its operations in the United Kingdom and other international locations during the past decade, with minimal activity in the Australian market. In 2011, Ingeus acquired longstanding business psychology services provider Assure Programs.

Assure offers specialty psychological services to organisations and employees. Services offered include psychological assessments, resilience and wellbeing training, management coaching, team development, organisational change management, and leadership assessment and development. Assure operates in all Australian states and territories and has expanded into New Zealand, with an office in Auckland. The company’s head office is located in Brisbane and it operates 17 other offices in Australia.

Player Performancecontinued

Financial performanceFinancial accounts for BUPA show that the entity earned $23.5 million from health services in 2010-11. IBISWorld estimates that revenue from PEAK is the largest contributor to this. Since BUPA invested in the business, PEAK has benefited from BUPA’s existing

operations in health management, including its national footprint. This is expected to allow PEAK to increase its market share and grow at a faster rate than the industry. PEAK currently operates five primary offices located in Melbourne, Sydney, Brisbane, Perth and Adelaide.

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Capital Intensity The industry displays a low level of capital intensity. The capital to labour ratio for the industry is 1:17.1, meaning that for every $1.00 invested in capital, $17.10 is invested in labour. Wages are the largest cost item for the industry. Corporate wellness providers employ a range of specialised healthcare and fitness professionals, including physiotherapists, doctors, nurses, dietitians and personal trainers. Capital costs are low, with firms investing in fitness and medical equipment and other items.

Operating ConditionsCapital Intensity | Technology & Systems | Revenue VolatilityRegulation & Policy | Industry Assistance

Tools of the Trade: Growth Strategies for Success

SOURCE: WWW.IBISWORLD.COM.AU

Labo

ur In

tens

ive Capital Intensive

Change in Share of the Economy

New Age Economy

Recreation, Personal Services, Health and Education. Firms benefi t from personal wealth so stable macroeconomic conditions are imperative. Brand awareness and niche labour skills are key to product differentiation.

Traditional Service Economy

Wholesale and Retail. Reliant on labour rather than capital to sell goods. Functions cannot be outsourced therefore fi rms must use new technology or improve staff training to increase revenue growth.

Old Economy

Agriculture and Manufacturing. Traded goods can be produced using cheap labour abroad. To expand fi rms must merge or acquire others to exploit economies of scale, or specialise in niche, high-value products.

Investment Economy

Information, Communications, Mining, Finance and Real Estate. To increase revenue fi rms need superior debt management, a stable macroeconomic environment and a sound investment plan.

Blood Bank Operation

Printing

Business Services

Computer System Design Services Health Services

Corporate Wellness Services

Capital intensity

0.5

0.0

0.1

0.2

0.3

0.4

SOURCE: WWW.IBISWORLD.COM.AUDotted line shows a high level of capital intensity

Capital units per labour unit

Corporate Wellness Services

Rental, Hiring and Real Estate

Services

Economy

Level The level of capital intensity is Low

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Operating Conditions

Revenue Volatility The industry displays a low level of revenue volatility. Revenue growth has been robust for most of the 10 years through 2013-14. Growth slowed during

2008-09 and 2009-10 as businesses cut back on non-core spending, but government programs and grants ensured this slowdown was mild and short-lived.Level

The level of Volatility is Low

Technology& Systems

The industry is increasingly reliant on technology as a medium of delivering corporate wellness services. Certain aspects of a fitness or health program can benefit greatly from face-to-face contact, such as a health check conducted in person by a qualified practitioner or a fitness class held for employees with an instructor or trainer. However, much of what the industry offers can be delivered over the internet or through a company’s intranet. Many of the industry’s larger participants offer an online service in conjunction with onsite services.

Online services are generally offered either through the internet or through software that is provided as part of a corporate wellness package. Medibank Health Solutions, for example, offers health management software, diet and recipe information, and health education resources via its online health services brand Fitness2Live. It also allows employers to monitor the health of their employees through access to the software and track productivity and absenteeism. BUPA’s PEAK Health Management offers a range of services through software designed by the company’s in-house IT team. Other players , such as Springboard HP, offer online programs that a client can include his or her family in. These online services are compatible with much of the industry’s target market:

office workers and other non-manual labourers whose work is done predominantly at a desk, giving them easy access to online services.

The rise of technology adoption and its utilisation as a medium for delivering industry services have led to technology becoming a crucial component of a wellness service offering. Investing in technology and including it as part of a corporate wellness package can save on wage costs, as less time needs to be spent on-site providing services in person. The client can then carry out the program at their own pace and in their own time. Additionally, health and fitness can be a confronting topic for some clients and being able to access an online diet, conduct an online health check or work through on online fitness program in one’s own time may increase participation, motivation and the eventual success of the service.

Given the importance of having an online component to a corporate wellness or workplace health package, industry participants stand to gain a significant competitive advantage if they can successfully design software that is accessible and useful to clients and that saves the firm wages costs. The benefits of the online medium mean that technology adoption within the industry will be rapid, while the level of technological change will be moderate.

Level The level of Technology Change is Medium

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Operating Conditions

Industry Assistance The Corporate Wellness Services industry receives a medium level of assistance. The industry body, the Health and Productivity Institute of Australia, is charged with promoting the industry through providing information on its benefits, supporting member businesses and linking corporate wellness providers with organisations seeking their services. In 2008-09, state and territory governments agreed to spend $294.3 million on the Healthy Workers Initiative. This scheme will run from 2010-11 to 2014-15 and will encourage workplace health programs

that tackle obesity, physical activity, healthy eating, smoking and harmful levels of alcohol consumption.

The most significant form of assistance in effect is WorkHealth, a Victorian initiative with the aim of having every employed person in Victoria receive a workplace health check. As of October 2011, WorkHealth announced 400,000 of Victoria’s estimated 2.9 million workers had been checked. These checks involve a 15-minute assessment by a doctor or nurse with the aim of identifying any potential risk of heart disease or diabetes. These health checks

Regulation & Policy There is no specific legislation or government regulation that applies to the industry. However, industry operators must adhere to consumer protection law. The Fair Trade acts in Australia’s states and territories stipulate rules regarding membership contracts, disclosure, privacy and sales and marketing tactics.

There is legislation that indirectly affects the industry by requiring qualifications for certain practitioners. This includes doctors, nurses, dietitians, massage therapists, personal trainers and psychologists. If someone were to sue on the advice of an unqualified practitioner,

a corporate wellness firm would be responsible through vicarious liability and would be exposed to legal ramifications. Fitness instructors, for example, cannot apply for indemnity insurance unless they are qualified.

The most recent and significant case of government involvement in the industry has been the Victorian Government’s WorkHealth initiative. The aim of WorkHealth is for every member of Victoria’s labour force to have access to a health check. Depending on the size of the employer, they may also receive a subsidy or grant for providing the service to their workers.

Revenue Volatilitycontinued

Level & Trend The level of Regulation is Light and the trend is Increasing

Level & Trend The level of Industry Assistance is Medium and the trend is Increasing

SOURCE: WWW.IBISWORLD.COM.AU

Volatility vs Growth

Reve

nue

vola

tility

* (%

)

1000

100

10

1

0.1

Five year annualised revenue growth (%)–30 –10 10 30 50 70

Hazardous

Stagnant

Rollercoaster

Blue Chip

* Axis is in logarithmic scale

Corporate Wellness Services

A higher level of revenue volatility implies greater industry risk. Volatility can negatively affect long-term strategic decisions, such as the time frame for capital investment.

When a fi rm makes poor investment decisions it may face underutilised capacity if demand suddenly falls, or capacity constraints if it rises quickly.

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Operating Conditions

Industry Assistancecontinued

are delivered by third-party businesses, including those in the Corporate Wellness Services industry. Springboard, PEAK Health Management and Corporate Bodies International have been commissioned by the Victorian Government to carry out these checks. Employers that participate in WorkHealth become eligible for a grant of between $2,000 and $10,000, provided they meet certain requirements.

Victoria is currently leading the way in terms of government support for workplace health and corporate wellness. Given that there is already evidence that productivity and absenteeism can improve as the health of workers improves, other Australian states are likely to follow Victoria’s lead. Alternatively, the Federal Government may choose to implement a national program, given the success of WorkHealth.

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Key StatisticsRevenue

($m)

Industry Value Added

($m) Establishments Enterprises Employment Exports ImportsWages ($m)

Domestic Demand

2004-05 76.8 39.6 65 23 559 -- -- 28.2 N/A2005-06 83.6 44.0 69 25 612 -- -- 30.9 N/A2006-07 95.9 49.5 74 27 682 -- -- 35.7 N/A2007-08 102.6 53.7 78 29 728 -- -- 38.5 N/A2008-09 106.6 56.8 86 30 754 -- -- 40.4 N/A2009-10 109.2 58.5 92 32 769 -- -- 41.7 N/A2010-11 114.7 62.1 103 34 809 -- -- 44.1 N/A2011-12 120.9 64.8 112 36 847 -- -- 47.8 N/A2012-13 125.4 67.8 118 37 896 -- -- 53.6 N/A2013-14 134.7 72.1 125 39 975 -- -- 57.6 N/A2014-15 149.9 81.5 128 40 1,078 -- -- 64.2 N/A2015-16 165.5 89.8 133 42 1,177 -- -- 70.7 N/A2016-17 180.2 98.2 136 43 1,260 -- -- 77.1 N/A2017-18 195.0 105.7 139 45 1,333 -- -- 83.1 N/A2018-19 208.7 111.5 141 48 1,412 -- -- 87.2 N/ASector Rank 35/35 35/35 32/35 33/35 33/35 N/A N/A 32/35 N/AEconomy Rank 623/633 607/633 546/633 567/632 592/633 N/A N/A 592/633 N/A

IVA/Revenue (%)

Imports/Demand (%)

Exports/Revenue (%)

Revenue per Employee

($’000)Wages/Revenue

(%)Employees

per Est.Average Wage

($)

Share of the Economy

(%)2004-05 51.56 N/A N/A 137.39 36.72 8.60 50,447.23 0.002005-06 52.63 N/A N/A 136.60 36.96 8.87 50,490.20 0.002006-07 51.62 N/A N/A 140.62 37.23 9.22 52,346.04 0.002007-08 52.34 N/A N/A 140.93 37.52 9.33 52,884.62 0.002008-09 53.28 N/A N/A 141.38 37.90 8.77 53,580.90 0.002009-10 53.57 N/A N/A 142.00 38.19 8.36 54,226.27 0.002010-11 54.14 N/A N/A 141.78 38.45 7.85 54,511.74 0.002011-12 53.60 N/A N/A 142.74 39.54 7.56 56,434.47 0.002012-13 54.07 N/A N/A 139.96 42.74 7.59 59,821.43 0.002013-14 53.53 N/A N/A 138.15 42.76 7.80 59,076.92 0.002014-15 54.37 N/A N/A 139.05 42.83 8.42 59,554.73 0.012015-16 54.26 N/A N/A 140.61 42.72 8.85 60,067.97 0.012016-17 54.50 N/A N/A 143.02 42.79 9.26 61,190.48 0.012017-18 54.21 N/A N/A 146.29 42.62 9.59 62,340.59 0.012018-19 53.43 N/A N/A 147.80 41.78 10.01 61,756.37 0.01Sector Rank 25/35 N/A N/A 27/35 13/35 8/35 23/35 35/35Economy Rank 135/633 N/A N/A 531/633 79/633 293/633 317/633 607/633

Figures are inflation-adjusted 2014 dollars. Rank refers to 2014 data.

Revenue (%)

Industry Value Added

(%)Establishments

(%)Enterprises

(%)Employment

(%)Exports

(%)Imports

(%)Wages

(%)

Domestic Demand

(%)2005-06 8.9 11.1 6.2 8.7 9.5 N/A N/A 9.6 N/A2006-07 14.7 12.5 7.2 8.0 11.4 N/A N/A 15.5 N/A2007-08 7.0 8.5 5.4 7.4 6.7 N/A N/A 7.8 N/A2008-09 3.9 5.8 10.3 3.4 3.6 N/A N/A 4.9 N/A2009-10 2.4 3.0 7.0 6.7 2.0 N/A N/A 3.2 N/A2010-11 5.0 6.2 12.0 6.3 5.2 N/A N/A 5.8 N/A2011-12 5.4 4.3 8.7 5.9 4.7 N/A N/A 8.4 N/A2012-13 3.7 4.6 5.4 2.8 5.8 N/A N/A 12.1 N/A2013-14 7.4 6.3 5.9 5.4 8.8 N/A N/A 7.5 N/A2014-15 11.3 13.0 2.4 2.6 10.6 N/A N/A 11.5 N/A2015-16 10.4 10.2 3.9 5.0 9.2 N/A N/A 10.1 N/A2016-17 8.9 9.4 2.3 2.4 7.1 N/A N/A 9.1 N/A2017-18 8.2 7.6 2.2 4.7 5.8 N/A N/A 7.8 N/A2018-19 7.0 5.5 1.4 6.7 5.9 N/A N/A 4.9 N/ASector Rank 4/35 7/35 3/35 3/35 5/35 N/A N/A 5/35 N/AEconomy Rank 52/633 77/633 27/633 36/632 22/633 N/A N/A 36/633 N/A

Annual Change

Key Ratios

Industry Data

SOURCE: WWW.IBISWORLD.COM.AU

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Jargon & Glossary

BARRIERS TO ENTRY High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labour. IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labour; medium is $0.125 to $0.333 of capital to $1 of labour; low is less than $0.125 of capital for every $1 of labour.

CONSTANT PRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the ‘real’ growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the Australian Bureau of Statistics’ implicit GDP price deflator.

DOMESTIC DEMAND Spending on industry goods and services within Australia, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.

EMPLOYMENT The number of permanent, part-time, temporary and casual employees, working proprietors, partners, managers and executives within the industry.

ENTERPRISE A division that is separately managed and keeps management accounts. Each enterprise consists of one or more establishments that are under common ownership or control.

ESTABLISHMENT The smallest type of accounting unit within an enterprise, an establishment is a single physical location where business is conducted or where services or industrial operations are performed. Multiple establishments under common control make up an enterprise.

EXPORTS Total value of industry goods and services sold by Australian companies to customers abroad.

IMPORTS Total value of industry goods and services brought in from foreign countries to be sold in Australia.

INDUSTRY CONCENTRATION An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less than 40%.

INDUSTRY REVENUE The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.

INDUSTRY VALUE ADDED (IVA) The market value of goods and services produced by the industry minus the cost of goods and services used in production. IVA is also described as the industry’s contribution to GDP, or profit plus wages and depreciation.

INTERNATIONAL TRADE The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For exports/revenue: low is less than 5%; medium is 5% to 20%; and high is more than 20%. Imports/domestic demand: low is less than 5%; medium is 5% to 35%; and high is more than 35%.

LIFE CYCLE All industries go through periods of growth, maturity and decline. IBISWorld determines an industry’s life cycle by considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments; the amount of change the industry’s products are undergoing; the rate of technological change; and the level of customer acceptance of industry products and services.

NONEMPLOYING ESTABLISHMENT Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self-employed individuals.

PROFIT IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding interest and tax.

VOLATILITY The level of volatility is determined by averaging the absolute change in revenue in each of the past five years. Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3%.

WAGES The gross total wages and salaries of all employees in the industry. Benefits and on-costs are included in this figure.

Industry Jargon

IBISWorld Glossary

HEALTH CHECK During a health check, a healthcare professional assesses an employee’s health by performing a physical examination.

HEALTH RISK ASSESSMENT Health risk assessments provide a snapshot of employees’ health within an organisation. The assessment typically involves a questionnaire, risk score and feedback.

PRESENTEEISM The cost of injured or ill employees not performing their jobs fully.

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