September 21, 2017

Do Employee Wellness Programs Save Money?

Businesses large and small are embracing the concept of employee wellness programs and, in turn, these programs have spawned an entire industry judged to be worth $US6 billion in the United States alone.

On the surface, workplace wellness programs would seem a good thing for everyone. Naturally, happier, healthier workers are less likely to have time off work due to illness and are likely to be more productive. While sceptics argue that wellness programs cost more than they deliver in benefits, others argue that a well-designed wellness program can provide both savings,cheap health insurance and a competitive advantage.

In 2010, a Harvard economist claimed that implementing a workplace wellness program returned three dollars to a business for every dollar invested due to reduced absenteeism. A more recent study by RAND Corporation, however, revealed that lifestyle management programs averaged just $US6 savings per member per month, while disease management programs saved $US136 per member per month.

Lifestyle management or disease management?

The study recommended that employers need to be very clear about their goals when introducing wellness programs at work. The findings showed that a lifestyle management program can reduce health risks from factors such as smoking, obesity and lack of exercise and can reduce absenteeism. If an employer’s aim is to improve workers’ health or productivity then such a program is worthwhile. If, however, the company is seeking a healthy return on investment for their programs, they should choose a program focussed on employees with existing chronic diseases.

The RAND Wellness Program Study also advises that lifestyle interventions don’t need to be excessively expensive, but can include simple things such as offering healthy snacks and meals within the workplace and encouraging people to use the stairs, rather than catch a lift.

So it would appear that the type of wellness program implemented is key to whether it achieves cost savings. The answer appears to be programs that identify at-risk employees and aim to prevent them from becoming ill and that assist chronically ill employees with stabilising their existing medical conditions.

The importance of employee willingness

Employee involvement is also a key factor in the success of workplace wellness programs – companies cannot force employees to live a healthier lifestyle. They need to have trust in both the program itself and the employer’s motives for implementing it.

Many studies have shown that increased employee engagement, productivity and workplace morale lead to higher financial returns and competitive advantages for businesses. A workplace wellness program that is welcomed by employees can have holistic effects including reduced absenteeism, fewer workers’ compensation claims, a higher level of employee engagement and productivity and a higher rate of employee retention – all of which lead to a happier workplace and financial advantages for the company.

In the end, employee wellness programs should be simply a part of an overall company ethos that supports the health and wellbeing of its employees and focusses on creating a workplace that is supportive, vibrant and a pleasure to be a part of each and every work day.

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