Employee Wellness Programs Benefits: What's the ROI for Your Business

The past year and a half has brought about a multitude of trends in the business world, making it difficult to keep track of them all—one such trend is the corporate wellness program.

According to a study funded by Rand Corporation and the United States Department of Health and Human Services, 80% of companies with more than 50 employees offer a benefit associated with corporate wellness to improve employees' health and overall well-being.

However, that's not it. According to a poll conducted by the SHRM, over three-quarters of HR professionals reported that their companies provided some wellness programs.

In addition, more than two-thirds of respondents from the same organizations reported that these efforts were "somewhat effective" or "extremely effective" in reducing hefty health care costs.

Whether you're planning to incorporate a new corporate wellness program in your 5,000+ employee company or want to improve the existing program with better research, search no further.

Below we'll cover everything you need to know about the fundamentals, benefits, implementation, and reimplementation of an employee wellness program to promote healthy behaviors, improve employee health, the business's bottom line, and, eventually, the ROI.

What is Corporate Wellness?

Many individuals have a preconceived notion that corporate wellness is a relatively new concept; however, it has been around for a significantly extended period.

1979 saw the beginning of Johnson & Johnson's Live for Life program (more on this later!), which is now widely recognized as the standard for all other corporate wellness programs in the industry.

What Are Corporate Wellness Programs?

At the core, corporate wellness programs are employee health plans established and implemented by employers to improve physical and emotional health.

In most cases, the purpose of these programs is twofold: first, to incentivize workers to lead a healthy lifestyle bolstered by proactive health-driven choices.

And second, to assist employers in improving the company's bottom line by reducing the impact of medical premiums and absenteeism.

Even though all corporate wellness programs' aim is typically the same, companies have various options, such as holding a weight-loss competition at work and awarding gift cards to those who finish in first place.

Other strategies include sponsored programs to encourage long-term changes in behavior, for example, to quit smoking or affordable gym memberships.

Regardless of the strategies implemented, any effective corporate wellness program has the potential to cultivate a holistic work environment.

This may present more opportunities than just reduced healthcare costs for the employer's benefit.

Now that you know corporate wellness, let's move to the benefits of implementing such a program.

What is an Employee Wellness Program?

Any action at the workplace that is intended to encourage and maintain healthy behaviors is considered to be part of an employee wellness program.

In point of fact, "wellness" is an umbrella that reflects all facets of well-being, including but not limited to one's physical health, financial wellness, mental health, and social relationships.

In other words, it is to let workers adopt healthy behaviors and promote a wellness culture throughout the organization.

What Should an Employee Wellness Program Include?

Employees are very significant assets for any business, and ensuring that they are in good physical and mental health enables the company to get the most out of those employees.

Whether it's paramedical services or healthy snack alternatives in the office, here's what a good wellness program should include to turn employees into "employees loyal."

• Biometric and Cancer Screening to Lower Health Risks
• Employees' Incentives for Physical and Spiritual Wellness
• Individual and Team-Based Challenges and Activities
• Mental Health and Behavior Change Wellness Programs
• Smoking Cessation Programs and Physical Health Fairs
• Weight and Disease Management Programs

Benefits of Implementing a Corporate Wellness Program

Corporate wellness programs have been the subject of research for decades. There are hundreds upon hundreds of thorough scientific analyses on the impact of a well-curated wellness program, which provides a fantastic perspective on the benefits of implementing such programs.

Continue reading to learn about corporate wellness program benefits.

Improve Employee Health Behaviors

Transforming every employee's health behaviors should be the center of any effective wellness program, allowing them to benefit by learning how to adopt and continue to practice and maintain healthy habits while keeping health risk factors at bay.

Below are some examples of essential healthy practices that all health and wellness offerings should focus on:

• Obtaining enough sleep.
• Engaging in physical activity.
• Consuming a good diet.
• Avoiding tobacco products.
• Consuming alcohol in moderation.

When employees engage in healthy habits, their health risks decrease, reducing the prevalence of chronic diseases such as high blood pressure.

There has been a lot of research examining the effectiveness of employee wellness programs in transforming poor health behaviors—some being more successful than others.

However, the ones that are well-organized and adhere to efficient models for health behavior transformation exhibit the best results.

Most corporate wellness studies demonstrate that program participation has done wonders. For instance, employees turn towards a healthy lifestyle after such programs and emphasize physical fitness.

Even the American Heart Association has a comprehensive study on such programs promoting health and lowering the risk of cardiovascular and chronic diseases.

Reduce Elevated Poor Health Risks

Promoting healthy lifestyle choices among staff members should be the cornerstone of any effective workplace wellness program.

A poor diet combined with a lack of physical exercise and workplace stress is usually always to blame for elevated levels of blood glucose, high blood cholesterol, and high blood pressure, resulting in poor employee health and lost productivity.

A randomized clinical study was developed to assist individuals in improving their levels of nutrition and physical exercise.

When the researchers looked at the data, they were shocked to see that the health risks may improve substantially in as little as six weeks. Participants who adopted healthy behaviors saw a significant benefit in terms of lower health risks.

Changes in health behaviors such as nutrition, physical activity, and cigarette abstinence all lead to extremely positive outcomes.

According to research published in the New England Journal of Medicine, an individual's chance of suffering a heart attack drops by 2 and 3 percentage points for every one percent reduction in total cholesterol.

There is an additional 2–3 percentage point decline for every point lowered in excessive diastolic blood pressure.

The key to adopting wellness activities is a low risk of illness or injury, and corporate wellness programs are an excellent method to assist employees in avoiding situations where their health may be jeopardized.

Hundreds of study studies have analyzed the capability of employee wellness programs to minimize the likelihood of developing more severe health problems.

One specific research looked at approximately 200,000 employee wellness program participants and found that 5 out of 7 health conditions decreased after one year.

A further researcher read the papers published to get a conclusion. According to the findings of his study, all-encompassing wellness initiatives significantly result in low health risks.

Lower Health Care Costs

Approximately one hundred distinct pieces of research have been done on the topic of comprehensive wellness programs' effects on a company's finances and cost savings.

Note that conducting such research-based studies is a complex task since it takes a significant amount of time and calls for a very intricate analysis of the return on investment (ROI).

A detailed study on the monetary effect of wellness initiatives in the workplace was first made available to the public in 2001.

The study shows that the actual effectiveness of a wellness program is critical in determining whether or not it can help reduce healthcare costs.

After all, having lunch once in a while after learning about nutrition won't be enough.

Recently, researchers from Harvard University presented an overview of the findings on the benefits of employee wellness ROI.

The average rate of return on investment found in the 22 separate research that investigated the relationship between employee wellness programs and healthcare expenditures was 3.27.

This indicates that the corporation saved $3.27 for every dollar spent on employee wellness programs due to lower healthcare expenditures.

Researchers also analyzed the influence of the wellness program on a big school district in the previous year.

After four years of implementing wellness activities, this workplace is saving money on healthcare expenses compared to what it did before the program was implemented. They saw savings of $3.30 for every dollar invested in a workplace wellness program.

Boost Employee Productivity

Low productivity means physically being at work but not working during that time due to illness, injury, or other mental distractions. Presenteeism is a term that refers to this kind of low productivity.

When employees are present at the workplace but not operating at total capacity, they are more likely to make errors, which results in lost time and money.

The costs connected with presenteeism resulting from poor employee health are at least two to three times more than direct spending related to health care.

Although presenteeism costs more than health care, businesses are so focused on reducing the direct expenses associated with poor employee health that they do not give it the same amount of attention.

A recent study published in Population Health Management sheds light on the subject. Compared with non-smokers, smokers had a 28% increased risk of having a high presenteeism rate.

On the other hand, employees who consistently consumed fruits, whole grains, and vegetables had a presenteeism rate 66% lower than those with unhealthy diet plans.

Employees who did not exercise significantly had a presenteeism rate that was fifty percent higher than those who were consistent exercisers.

These results prove that a high degree of presenteeism is substantially correlated with engaging in unhealthy instead of healthy lifestyles.

Thus, poor choices on an individual level may result in missed productive work time.

Curb Absenteeism

Over 50 pieces of research have been published investigating the connections between workplace wellness programs and lower rates of employee absenteeism.

Researchers from Harvard examined the ROI of wellness programs with absenteeism and found that these programs may save $2.73 and decrease absenteeism for every dollar spent on such programs.

Workplaces that implement all-encompassing worksite wellness programs to retain employees may see a reduction in absenteeism for several reasons.

For example, employees who engage in healthy behaviors have a lower absenteeism rate; employees who can keep their stress under control; employees who have healthy blood pressure, cholesterol, and glucose levels; and employees who do not have a body mass index of 30 or higher—the list is neverending.

The implementation of wellness programs may improve employees' health, which can affect the number of days missed from work.

However, there is still another reason why wellness initiatives have the potential to affect absenteeism significantly.

When the employee morale is good, they are far less likely to call in sick or take time off from work for personal reasons.

Improve Employee Recruitment and Retention

No published scientific research suggests that offering wellness programs to employees will substantially influence your capacity to acquire new workers or keep the ones you now have.

However, when deciding whether or not to take a job offered, there are several considerations to consider. It would be helpful if you could provide a competitive salary package.

When an employee is debating whether or not to take a position, offering a good employee wellness program could influence their decision one way or the other.

Wellness programs are being included in the employee benefits packages at every major software and technology company. Companies do this since they are all competing to employ and retain top talent.

According to a poll conducted by Virgin HealthMiles and Workforce, almost 87% of employees said that when selecting an employer, they consider the physical and mental health benefits provided.

However, compared to other specified benefits, a company wellness program carries less weight in the decision-making process over employment. Nevertheless, employee wellness programs do have a significant influence on employee recruitment and retention.

Help Sustain High Employee Morale

What does it mean for a company's bottom line to have employee morale? Not sure? Try to turn the question around and ask it again.

What financial toll does a business take on when its workforce suffers from low morale?

Since low employee morale may be infectious, you should expect an increase in the number of complaints received, a decline in the quality of the product or service you provide, and a proliferation of other issues. Sounds horrible, right?

If you spent your whole life investigating employee wellness programs' benefits, you would probably come to the conclusion that excellent employee morale is an enormously significant benefit of wellness, even though it is almost hard to assess.

This is why many businesses with a successful wellness program also have much superior financial health.

If you provide your employees with access to a comprehensive wellness program, you are communicating to them that you value their work, have faith in them, and want to see them succeed in their personal and professional lives.

When employees are allowed to be creative, find solutions to issues, feel secure and valued, grow in self-esteem, and accomplish personal goals and objectives, their morale improves as a whole—resulting in happy, loyal employees.

The Real ROI for Employee Wellness Programs

The ROI for employee wellness programs has been the subject of many essays published in the Harvard Business Review.

The research conducted by physicians Richard Milani and Carl Lavie focused on one company and analyzed a random sample of 185 employees and their spouses.

Although the participants were not diagnosed with heart disease, they did undergo cardiac rehabilitation and corporate fitness programs under the direction of a group of specialists.

At the beginning of the research project, participants were categorized as high risk based on their various factors; however, after participating in the wellness program for six months, 57 percent of them were reclassified as low risk.

In addition, the expenses of medical claims decreased by $1,421 for each participant compared to the previous year's expenditures.

Measuring ROI

An effective technique for measuring ROI is to look at the tangible savings that result from reductions in health care costs and sick leaves.

However, the extra advantages generated by increasing good health behaviors should not be overlooked.

The additional contributions made by healthy employees might bury the predicted return on investment by the hard cost savings.

Suppose the impact of your workplace wellness program on health insurance rates is the sole metric being used to evaluate it.

In that case, you're ignoring most of the available information. There is already evidence spanning decades that workplace wellness programs may boost workplace wellness while reducing the expense of healthcare for the company.

How Wellness Programs Benefited Johnson & Johnson

Since 1995, the number of smokers employed by Johnson & Johnson, an American multinational corporation, has decreased by more than two-thirds.

That's a huge plus, but should managers be concerned about it?

Yes, of course. It is profitable to make an all-encompassing, well-planned investment in workers' physical, social, and mental health.

The management of J&J believes that the organization saved a total of $250 million over the previous decade due to the implementation of wellness programs.

The return on investment for these programs to promote good health behaviors was estimated to be $2.71 for every dollar invested from 2002 to 2008.

The current stats are still unknown, but it's definitely huge.

Wellness programs are often considered an optional perk rather than an essential business need.

However, just like Johnson & Johnson, companies in the United States (and worldwide) may reduce their significant healthcare expenses, which are only expected to increase due to an aging workforce, by implementing wellness programs and taking advantage of the tax incentives and subsidies made available by recent federal healthcare legislation.

Partner with Corestream

Now that you know the benefits of employee wellness programs and how good health behaviors among employees may help you reap the greatest ROI, it's time to partner with Corestream.

We work with more than 150 multinational enterprises assisting them in scaling up their provision of lifestyle and optional benefits via corporate discount programs. To learn more about our offerings, visit www.corp.corestream.com to book a free consultation.