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As we go into the chilly winter months, one of the biggest challenges for management is keeping staff healthy and energetic.

It's a concrete problem. Australian studies estimate the cost of productivity due to the decreasing health of the workforce is A$1.7 billion ($2 billion).

And according to the 2007 PriceWaterhouseCoopers Global report "Working Towards Wellness", there is a trend for decision-makers to invest in wellness programmes to combat the effect of an inactive workforce.

Former health insurance executive Graeme Edwards and his partner, Kim Harvey, a former Les Mills trainer/choreographer, have been running the Azion Wellness health programme and the Kiwi Workplace Challenge with companies for the past couple of years. This year, they launched a more interactive computer programme, making the challenge more fun for recalcitrant staff.

"The Kiwi Workplace Challenge is for those doing nothing at all," says Edwards.

Participants go through a guided 12- week virtual adventure race around New Zealand and Australia, stopping off at various tourist spots. To complete each leg, they have to walk a certain distance - recorded by a pedometer - or carry out other physical activities.

An animated version of Olympic triathlon silver medallist Bevan Docherty - the site's ambassador - gives personalised encouragement.

Each participant gets to build their own avatar, or animated character, using Flash technology and this personalised character then travels the course.

At the end of every leg in the 12-week event, participants can see a customised two-minute clip of the journey they have just completed around that leg, featuring their character and the characters of teammates.

There are two divisions: advanced for more athletic types and the open division for less active staff. In the latter, participants do an average of 8500 steps a day if they want to reach the end of the course, while the advanced division requirement is 11,500 steps.

Edwards has big hopes for the idea; the United States is an obvious market. But first, he is trialling the new technology in New Zealand and Australia, and with one company in Britain.

There is customised animation for companies, so an animated CEO can deliver messages of encouragement.

"A lot of the uptake we get is a reflection of the company culture," says Edwards.

"We find that where the senior management are active themselves, because they understand the benefits, it's not a hard sell.

"Where someone at a senior level is not active, it's harder to convince them - it could be seen as a criticism."

An example of management involvement came two years ago, when then-CEO of the Counties Manukau District Health Board, Stephen McKernan, took part in a treadmill challenge with a staff member from the mailroom. The health board had an excellent participation in the Kiwi Workplace Challenge and Edwards puts that down to McKernan's rolled-up-sleeves example. The board's most recent event attracted 800 participants, double the initial number two years before.

So, the hard question: how much more productive does it make people?

Edwards surveys participants after the event and asks them to rate their energy levels. The feedback has been that their energy levels improve 20 per cent. When asked if they feel fully effective, people estimate they have improved or become more productive by 10 per cent.

"We do know that sick leave drops when people are doing the programme - more because they are having fun, so they want to get into work," says Edwards. In a company where 70 out of 90 people participated, the number of those taking sick leave was halved on the previous year, says Edwards.

The current challenge trial involves 400 teams, with 1500 people from 100 companies including Air New Zealand, Tourism NZ, Westpac, Qantas, ANZ National, Kiwibank, IAG and even TVNZ's Breakfast show.

For IAG, which trades under the NZI and State Insurance brands, the Kiwi Workplace Challenge is just part of its wellness programme, says HR head Fiona Michel.

The IAG NZ chief executive, Nick Hawkins, did the Coast-to-Coast run last year and, this year, it was the Cure Kids race in West Auckland. Even if staff are fit, "we don't let them off" says Michel - they go to the advanced division.

Michel is doing it this year and the most junior person in her HR department is captain of the team, which makes for an interesting juxtaposition of roles.

"It's a nice icebreaker," she says.

As well as getting people more active, it is a valuable team-bonding exercise, says Michel.

"We have really enjoyed workplace challenges because it's something that's non-threatening, it opens up the way to all sorts of things," says IAG safety and wellness consultant Kim Carran.

There has also been large take-up from banks. Nic Veltman, national learning and performance manager at Kiwibank, says: "I was looking to do something around wellness and promoting health.

"My CEO was supportive of me going ahead. He's very much a believer in it, that it should be happening anyway," she says of CEO Sam Knowles.

What she liked about this initiative was that it was not singling out the talented athletes in the company, it was for everybody.

"It's all good stuff, quite eye opening. My colleague, we are both fairly unfit people ... but we are doing a lot more than we were," she says.

* Gill South is a freelance business writer based in Auckland.