Exploring the payoff of employee wellness initiatives on company performance
Companies in the US have been investing in employee wellness programs since the early 1950s; Some of the initial programs were designed to help employees cope with issues of alcoholism and mental health. Over the years, these programs have transformed to address a broader spectrum of issues that more closely reflect the state of public services available and the complexity of challenges facing employees in the modern world (e.g., balancing work and personal commitments, diet and exercise, mental health, commuting times and options, etc.).
Some companies have invested heavily in wellness initiatives in order to strengthen their ability to attract and retain unique and exceptional talent in a highly competitive work environment. Others, motivated by reducing employee insurance costs, have sought to implement wellness programs that focus primarily on improving the health of their employees.
Unfortunately, the vast majority of companies simply aim to provide a minimum set of wellness benefits to ensure that they remain relatively competitive to their peers in their sector. These companies often do not consider wellness programs to be a strategic priority or even an investment — rather, these programs are often perceived as a liability or a standard cost of running a business.
By taking this approach, many companies overlook the opportunity to explore or understand the actual return on investment (ROI) associated with these initiatives, should the programs be designed and implemented effectively.
Understanding the Benefits of Employee Wellness Programs
A wide range of research on the subject reveals that wellness programs have the potential to make a significant contribution to businesses by lowering costs, improving productivity, and increasing employee morale. In addition, programs that are structurally sound and implemented effectively can lead to a 6:1 investment return, that is, a savings of $6 on health care costs for every dollar invested in a workplace wellness program or intervention. Other studies have also revealed that wellness programs lead to reductions in employee attrition rates and enhance a company’s ability to attract new talent into the company.
Implementing Employee Wellness Initiatives Effectively
In a 2010 Harvard Business Review article, “What’s the Hard Return on Employee Wellness Programs,” Leonard L. Berry, Ann M. Mirabito, and William B. Baun point out that there are “six essential pillars of a successful, strategically integrated wellness program.” These include:
- Multilevel Leadership: A culture of health can be fostered in a company by having a range of leaders (e.g., C-suite, middle managers, wellness program managers and champions) endorse and participate in the wellness initiatives.
- Alignment: Wellness programs should be well aligned to business priorities, promoted through relevant incentives, and given sufficient time to develop and embed into the culture of the company.
- Scope, Relevance, and Quality: Programs should be designed to take into account the diverse health needs of employees and promoted in an engaging way to raise and sustain participation levels.
- Accessibility: Providing employees with easy access to wellness initiatives increases the probability and frequency of the program’s usage, thereby assisting employees to derive maximum benefit from the investment.
- Partnerships: Forging internal and external partnerships — for example between relevant internal functions such as HR and Finance or between wellness program leads and external service providers — can help support the design of cost-effective and impactful wellness initiatives.
- Communications: Crafting customized messages and disseminating them through various internal channels can promote wellness programs to a broad and diverse employee base and persuade many to get on board.