Executive Assistant

“On the Go” for Office Creation

(410) 693-0745

Internal Memorandum

DATE: February 03, 2012

TO: John E. Davies, President

Cc: Dr. Harris, Dr. Alonge, Paul Cahn, Alicia Blake, and Sarah King

FROM: Modupe O. Sarratt, Executive Assistant

SUBJECT: Requesting to Conduct Research for Creating an On-Site Workout Facility/Gym

Introduction

On November 21, 2011, a questionnaire was sent out to the staff, referencing a decrease in productivity, caused by laziness and time off from work. Many of our employees are no longer fit to do their job and as a result, we are no longer able to compete in today's job market.

Problem

The employees’ tiredness linked to weight gain/obesity has led to time off from work for doctor appointments. One of the suggestions in the questionnaire to address the problem was an offer to provide gym benefits or create an on-site workout facility. Majority of the staff responded to create an on-site gym: 90% responded, while 10% did not respond.

Preliminary research

The staff unanimously preferred having an on-site gym versus gym memberships; memberships can become quite costly, inconvenient, require a long-term contract, and it is an expense for the company because there is no tax benefit for having a gym membership. While the United States Department of Health and Human Services report the impact of “Obesity-related health problems cost U.S. businesses an estimated $13 billion including about $8 billion in health insurance costs,

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$2.4 billion for sick leave and average health care expenditures for people with diabetes run about $13,243 per person.” (Prevention)

However, the IRS provides tax benefits to companies who have on-site workout facilities, according to Hearst Communication Inc Tax Incentive for Workforce Health Improvement Program Act, “IRS allows businesses to deduct only the costs of providing on-site gym facilities and employees do not pay taxes on those benefits.”(Hearst).

The USGS Physical Fitness Program Handbook for funding suggested, “To buy equipment or establish an on-site fitness center, overall costs may not exceed $300.00 per employee times 10 years.”(USGS)

Recommendation

To convert our basement into an on-site workout facility, such as this online design by "Club Gym Site" we need to review these key points:

• Free design and consulting service

• Equipment orientation

• Equipment service and preventative maintenance services

• Extended warranty programs

• Having one source for all our product and service need

• 24-hour response time

HR Guidebook for established on-site fitness rooms or exercise facilities suggested that we buy and read these two books before implementing:

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• ACSM’s Health/Fitness Facility Standards & Guidelines, Second Ed., American College of Sports Medicine, 1992.

• Health Fitness Management, A Comprehensive Resource for Managing and Operation Programs and Facilities, by William C. Granthan/Robert W. Patton/Tracy D. York/Mitchel L. Winick, Human Kinetics, 1989. (HR)

Benefit

An on-site gym would eliminate the need to reimburse employees for gym memberships and travel expenses. The gym would be available to all employees from Monday to Friday between 6am-8am, Noon-2pm, and 5pm-8pm. According to HR Guidebook for established on site fitness, our company would receive the following benefits:

• Potential reduction in overall healthcare costs

• Potential reduction in employee absences

• Improved employee health and fitness

• Increased employee satisfaction

• Increased employee engagement

• Informal building of community networks

• Can aid in the recruitment of top talent

• Can help facilitate a positive company culture

Challenge

The restructuring of the basement into a gym could be long and noisy.

Conclusion

Although our staffs are efficient and friendly, they know that their health has overshadowed their strengths to do their job. We want to include “On the Go” in our title to refer to having on-site gym.

An on-site gym is a benefit to the company and to the employees. The company can receive many tax benefits for having an on-site gym. In pursuit of new employees, we will be able to offer the on-site benefit versus a reimbursement for gym membership fees.

I know you are interested on how we can improve our productivity. Therefore, I hope you will allow me to begin the research and gather financial information. Let me know if you have any questions.

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Sources

Free Web

Reference

Gym Source (2011) http://www.gymsource.com/media/wysiwyg/test-3.jpg

Hearst Communication Inc. Tax Incentive for Company who offer gyms incentive (2012)

http://smallbusiness.chron.com/tax-incentives-companies-offer-gym-memberships-18505.html

HR Guidebook, Establish on site fitness rooms or exercise facilities (2012)

http://www.elinfonet.com/human-resources/Establish-on-site-fitness-rooms-or-exercise-facilities/-us

Prevention Makes Common “Cent” U.S. Department of Health and Human Services (2003)

http://aspe.hhs.gov/health/prevention/prevention.pdf

USGS Gov Human Capital Services and Support Physical Fitness Program Handbook-Funding (2011)

http://www.usgs.gov/humancapital/pb/physicalfitnesshandbook.html

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