11.29.

2018

Benefits Report

PREPARED BY: ERIQ GARDEA – STORE MANAGER

SPRINT
1901 N. ROSELLE RD. SCHAUMBURG, IL 60195

Prepared for Tracy Nolan, Chief Financial Officer

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ABSTRACT
Sprint is in a position where it needs to improve all facets of the company in order to optimize business
once a merger with T-Mobile is approved. The strongest way to put the company in position to be a
strong merger-partner, is establish a strong hold of financial stability. One of the biggest costs to our
company is insurance premiums for our employees. Mitigating this cost on a company-wide scale
would greatly position Sprint for long-term success as stable wireless merger-partners with T-Mobile.
The most practical way to mitigate insurance costs is proactively investing in our employees’ short-term
and long-term health. This investment is in the form of a wellness center for all company employees.

The production of an onsite wellness center in our corporate headquarters for our valued employees
creates opportunity for huge savings. The wellness center will possess a set of onsite nutritionists and
doctors. Creating a wellness center helps prevent some of the most prominent heart-related diseases
that can be found amongst American workers. Creating a wellness center with the intent of improving
employee health, namely cardiovascular health significantly can reduce unexpected employee time off
due to illness or disease. Improving employee wellness reduces absenteeism or missing work due to
sickness, mental state, or injury.

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ABSTRACT ............................................................ 1
Table of Contents.............................................. 2
Transmittal ....................................................... 3
Executive Summary .......................................... 4
WELLNESS CENTER ANALYSIS (INTRO) ........................ 5
WELLNESS CENTER EVALUATION .......................... 6-8
CONCLUSION AND RECOMMENDATION ....................... 9
REFERENCES........................................................ 10

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TRANSMITTAL

This report summarizes a portion of the many benefits companies reap when implementing an onsite
wellness center for their employees. This report identifies how employee sickness, long-term health
related absences, and employee disability, can be reduced with an onsite wellness center. This report
also identifies how Sprint will benefit long-term by reducing company insurance costs in tandem with
increasing overall employee productivity.

The purpose of this report is to provide insight to our senior management team on how investing in
employee wellness can benefit our company both short-term and long-term. Reducing employee
absences and guiding individuals to a healthier lifestyle to improve overall happiness and satisfaction
within the company leads to a stronger work force and puts us in position to be a strong merge partner
with T-Mobile. For any additional questions or inquiries, I am available by email and phone as well. My
email is Eriq.Gardea@Sprint.com and my phone number is (708) 497-5772.

Eriq Gardea
Store Manager (Store 5054)
Sprint

EXECUTIVE SUMMARY

Integrating a wellness center in an effort to reduce healthcare costs by improving employee wellness is
a huge opportunity for Sprint finances. If executed correctly, we have the ability to help all Sprint
employees earn a “Healthy Living Discount”—a discount rewarded to those who exhibit a certain level
of physical activity and exercise by a doctor. The “Healthy Living Discount” represents a discount on a
current cost we have for all our employees. The “Healthy Living Discount” reduces the costs Sprint pays
out of pocket for employee healthcare. Such a discount, when scaled into the tens of thousands allows

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Sprint to save an astronomical amount of money. The money that is saved will be available for other
resources in an effort to compete at a higher level with our rivals within the telecommunications
industry.

Wellness centers and the benefits they offer go beyond just costs and savings. Wellness centers also
increase employee health overall. The more we invest in our employee health the better our
employees’ wellness becomes. Improved employee health results in a direct drop-off in unexpected
time off as a result of sickness, ailments, or bodily injury. Unexpected time off is a huge detriment to
the company and negatively affects productivity on many levels. Reducing such instances eliminates
costly contingency plans and likelihood of costly errors to occur. The overall reduction of the above-
mentioned scenarios allows us to operate more effectively and operate at a more cost-effective level.

There are costs associated with creating a wellness center for our employees. There will be costs
associated with keeping the facility operating. However, the money saved will exceed the costs
associated with keeping the center operational. The overall productivity that takes place by improving
employee wellness with a company wellness center will payoff tenfold in the form of better results at a
quicker rate in any given department. Not only will Sprint dramatically reduce the cost of healthcare for
a majority of our employees by proactively assisting in their attainment for the “Healthy Living
Discount” but also, the company invests in a stronger work force that can operate and complete tasks
in a more productive fashion.

WELLNESS CENTER ANALYSIS

INTRODUCTION
A company merger with T-Mobile is on the horizon and it is in Sprint’s best interest as an organization,
to create the opportunity to succeed long-term with a new industry partner. The company must
continue to proactively make decisions that allows them to put their best foot forward upon
completion of merger in order to allow both Sprint and T-Mobile to be successful companies in the
next era of telecommunications. Sprint must take more actions to reduce overall company costs in an
effort to be in the best financial form possible. A huge glaring opportunity for improvement lies in the
costs spent on employee healthcare. In fact, employee insurance costs have historically risen in the last
five years—a troubling trend. Another byproduct and benefit of implementing a wellness center is
increased productivity and reduced employee off time as a result of sickness, injury, or state of mind.
This can also be referred to as “absenteeism”. By tackling both issues with the same solution, Sprint can
poise themselves assume the role of strong merger-partner with T-Mobile and pave the way for
success in the years to come as a brand new more powerful company.
The Wellness center is much more than your traditional gym. Besides the obvious resources provided
for exercise, we would have onsite professionals such as a cardiovascular doctor and nutritionist who
can help our employees achieve their desired health status beyond the means of physical exercise. The

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presence and ongoing knowledge of how to maintain a strong level of cardio health from an onsite
cardiovascular doctor would represent a huge positive shift within Sprint employee heart health and
will translate to millions of dollars of savings in the long-run.

The CDC also identifies that four out of the ten most expensive health conditions that cost companies is
heart and stroke related. (CDC
Foundation) By tackling some of the most
serious heart-related health issues we can
optimize our costs and productivity even
more. Improved cardiovascular health
reduces instances of heart disease
relieving company costs on the financial
end. Additionally, improved
cardiovascular health leads to less time
off, translating into increased
productivity. Improved wellness reduces
instances of high health care costs and
improves overall productivity both on the
short and long term level.

EVALUATION
Pros

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Sprint has roughly 60,000 employees within the company. The cost of health care is roughly $12,201
(Willis Towers Watson). The implementation of a company wellness center gives our employees a huge
opportunity to engage in exercise and a healthier lifestyle in the long term. By teaming with insurance
providers to house nutritionists and doctors we can streamline a program to get all interested
employees enrolled into classes to help assist achieving the requirements of the “Healthy Living
Discount”
from
insurance
providers. A
Recent study
conducted
by Willis
Towers
Watson
reveals that
some of the
most
financially
successful
companies
have been
recently
investing
into
employee
health care, paving the foundation of cost-savings and productivity-increase. Insurance costs for
employers have increased over the last eighteen years and show no indication of going backwards. It is
important to proactively combat this ever-increasing cost. This line graph represents the most recent
increase in average cost of employee healthcare for employers and the numbers are quite telling.
There is no reason Sprint, a company responsible for generating multibillion-dollar revenues cannot
engage in these groundbreaking methods of company refinement.

These savings present themselves in the form of the “Healthy Living Discount” that insurance providers
offer both the employer paying the subsidy of the premium and the employee. The “Healthy Living
Discount” is a monthly discount off the premiums for the employer and employee who exhibits a
certain level of healthy behavior. Doctor’s document this status based on a criteria that insurance
provider’s create. If the patient meets said criteria, the doctor signs the patient off as eligible to receive
a “Healthy Living Discount” which reduces the monthly premium costs for the employer and the
employee. By promoting this program to our 60,000 employees, we can increase level of engagement
to acquire the “Healthy Living Discount” from a facility located within the work premises. The more
employees receiving this discount, the more money Sprint saves

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An onsite nutritionist would not only complement the already existing benefits of the cardiovascular
doctor, but tackle the diabetes portion of health concerns while improving employee wellness which
would also reduce employee time off—thus increasing
overall productivity. Absenteeism is one of the biggest
opponents of company productivity (Forbes) and by
investing in employees’ wellness and reducing instances
where absenteeism may occur in the form of sickness or
injury, we can capitalize on productivity in a less costly
fashion. A missed day is not simply a “missed shift” or a
“day’s worth of work lost” it is so much more. It translates
into the work being done with a higher risk of errors since a
substitute is taking care of the task. It costs time and money
to fix those errors. In fact, a recent study conducted by
Circadian, a workforce solution company discovered that
that a day missed by the average hourly worker costs a
company roughly $3,600 in productivity while a salary
employee’s absence represents a $2650 loss. (Circadian)
Tackling these instances within all facets of the company
reduces these challenging situations and allows us to work
more effectively on all fronts. The following illustration
identifies the opportunity cost lost from a company when the following occupations miss work. Note
how multiple categories within the illustration are found within the
telecommunications industry.

Cons
As the saying goes, “it takes money to make money”. Building a wellness
center and furnishing it with the appropriate equipment is not free and therefore it is only fair to
address the “cost” portion of this solution. Normally, a company of our scale would have to contract
the production of the wellness center. Land would have to be bought and paid for accordingly. These
costs can add up quickly and prompt one to consider whether the fitness center is worth it.

Fortunately, my team and I have pre-emptively started looking into some solutions that can address
such primary financial concerns. The building next to our Midwest headquarters is rarely used, as it is
the old Nextel corporate office. Sprint owns that building as a part of the acquisition of Nextel in 2005.
We would be able to convert the old four-story building into a wellness center for our employees. This
directly addresses the concerns related to the initial costs of a wellness center. Secondly. I have
reached out to the president of major industrial construction company, Bob’s Builders—an account
Sprint has had for more than twenty years. We discussed the possibility of needing the company’s
services to gut the interior of the old Nextel building and convert it into a wellness center. The
president informed me he would be ecstatic at possibility of working with us and is willing to offer a
discount for the work if we can collaborate with the business team and pave the way for an exclusive
cost-effective plan rate for his business going forward.

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Beyond initial costs,

there is the reality of
staffing,
maintenance, and
equipment that can
also pose a threat to
our finances if this
project is executed
incorrectly. Staffing,
maintenance, and
equipment can be
costs that run a toll
on our finances in
the long run. This is
where the Wellness
center becomes a
“too good to be true
solution” for all. The
picture on the next
page shows the
average monthly cost
of gym memberships
in America. We can further subsidize the operation costs of our wellness center by including a cost-
effective gym membership with the option to deduct it from one’s direct deposit to ensure
convenience. We will be able to offer our employees a special rate of $25 a month for access to this
new state of the art gym. This program will be even more appealing because it is less than half of what
the cost is in a normal gym. The appeal to our employees is the reduction of insurance premiums once
they can attain “Healthy Living Discount” status which start off at a minimum discount of $50 a month--
-essentially paying off the membership fee of the gym itself!

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CONCLUSION AND RECCOMMENDATION

Times are changing quickly for Sprint as a company. The company is nearing a merger with
telecommunications powerhouse T-Mobile and it is in the company’s best interest to make proactive
strategies before the merger is complete. Strategies in the name of financial stability and increased
productivity are key components for our success going forward. The implementation of a wellness
center provides us a huge opportunity to undergo massive discounts for employee health care. We
have the opportunity to give our employees direct access to a facility where they can achieve a level of
fitness while getting valued consultation from professionals. This concept paves the way for millions of
dollars in savings as it translates to significant employee health care cost reductions.

Additionally, investing in professionals to give onsite consultation about nutrition and exercise
increases overall wellness of all employees participating. Increased wellness amongst our employees
will result in drastic productivity. Increased wellness decreases instances of sick time, injuries, and
chances of injury, aka absenteeism which prevent unexpected employee time off. Aside from costs
alone, the flow of work in all departments will operate more effectively with a staff that is less inclined
as a whole to miss work unexpectedly.

Costs associated with manufacturing the wellness center itself can be high and discouraging. However,
by utilizing company partnerships and recycling old real estate we actually can start this initiative at a
fraction of the cost. We must act soon as every day that goes by we get closer to the pending merger
with T-Mobile. As we all know, it is best to start a productive relationship with “your best foot forward”.

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References

-Business Pulse (2018) Healthy Workforce https://www.cdcfoundation.org/businesspulse/healthy-

workforce-infographic
-Dwilson, Stephanie (June 6, 2018) Do You Know the Full Cost of Workplace Absenteeism?
https://thebenefitsguide.com/do-you-know-the-full-costs-of-workplace-absenteeism/
-Forbes contributor “Investopedia” (July 10, 2013) The Causes and Costs of Absenteeism in the
Workplace https://www.forbes.com/sites/investopedia/2013/07/10/the-causes-and-costs-of-
absenteeism-in-the-workplace/#7a832fbb3eb6
-Willis Towers Watson (March 1, 2018) Best-performing Companies Achieve Significant Healthcare Cost
Savings https://www.willistowerswatson.com/en/press/2018/03/best-performing-companies-achieve-
significant-health-care-cost-savings
-Willis Towers Watson (January 31, 2018) Best Practices in Healthcare Employer Survey Report
https://www.willistowerswatson.com/en/insights/2018/01/2017-best-practices-in-health-care-
employer-survey#endnote
-Miller, Stephen (September 26 2017) For 2018, Expect Steeper Health Plan Premium Increases
https://www.bing.com/search?FORM=SWBW15&q=money.
-Alton, Larry (October 18, 2017) How Workplaces are Improving Employee Health—And What
Millennials Can do to Help https://www.forbes.com/sites/larryalton/2017/10/18/how-workplaces-are-
improving-employee-health-and-what-millennials-can-do-to-help/#60ecd2f27dd6
-CDC (2018) Workplace Health Model https://www.cdc.gov/workplacehealthpromotion/model/

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