For many organizations, the idea of adding a comprehensive workplace wellness program is viewed as a nice employee benefit, but not necessarily as a strategic necessity in an era of aging workforces and increasing healthcare costs. Employers want to improve the health of their workforce, decrease attrition rates and lower costs…
Do Workplace Wellness Programs Really Work to Achieve These Results?
One of the biggest hurdles for HR departments and benefits buyers to overcome in implementing a wellness program at their company is proving a return on investment (ROI) to company leadership. However, surveyed employers who have implemented such programs report substantial, measurable savings. For example, Johnson & Johnson estimates that they have saved nearly $250 million dollars over the past decade after implementing their wellness program. These savings mainly come from the medical cost reductions that resulted from a 67% drop in the number of employees who smoke, and a 50% decrease in employees with high blood pressure and physical inactivity.
While Johnson & Johnson estimates a $2.71 return on every dollar spent for their wellness programs, other studies have found even higher savings. For example, a comprehensive analysis of 22 different studies of employer wellness programs by a team of Harvard University professors discovered a return of $3.27 for every dollar spent, while Doctors Richard Milani and Carl Lavie found that a six-month wellness program at one company resulted in a 57% reduction in the number of employees at high-risk (based on obesity, blood pressure, anxiety, etc.) and a medical claims decline of $1,421 per participant, with an ROI of 6:1.
Productivity gains are another way employers see a return on their wellness program investments. A recent comprehensive analysis of 42 published studies of companies with effective wellness programs showed a 28% average reduction in sick days and a decrease in absenteeism costs of $2.73 for every dollar spent on the wellness program.
Wellness programs also work by increasing employee satisfaction and decreasing attrition rates. Employees who are offered and participate in wellness programs report a higher level of job satisfaction and are more satisfied with both their employer and their overall benefits package. A study by Towers Watson found that companies utilizing highly effective wellness programs saw lower attrition rates than those that did not (9% vs. 14%), while one company, Biltmore Tourism Enterprise, experienced a reduction in turnover from 19% to 9% four years after implementing their wellness program. According to Vicki Banks, Biltmore’s director of benefits and compensation, “Employees who participate in our wellness program do not leave.” According to another company, Nelnet, employees that have left their organization list the wellness program as the number one thing that they’ll miss most.
So do wellness programs really work? Based on studies by leading experts, when companies invest the time, resources and finances to create a truly effective, holistic program (one that focuses on stress management and financial security in addition to diet and exercise) that incentivizes employee participation through free services and premium cost reductions, the answer is a resounding “yes”.