Summer 2021
Issue Map
Multiple rolled up measuring tapes
CTDO Magazine

Is Employee Wellness Worth the Money?

Thursday, July 15, 2021

Track and analyze metrics to uncover the financial and intangible value of wellness programs.

Employee wellness programs may have started as an employee perk for large corporations, but they have quickly become a mainstay of benefits packages for organizations of all sizes across industries. Typical wellness solutions and strategies take many forms, including biometric screenings, on-site healthcare, stress-management tools, on-demand fitness classes, health coaching, health risk assessments, health fairs, mindfulness and meditation guides, and enterprise-wide wellness challenges.

Advertisement

Not surprising, in 2020, most employers saw a spike in interest—and need—for wellness solutions that can support their workforce. According to the 2021 Industry Wellness Industry Trends Report produced by Wellable, a wellness technology platform, 42 percent of employers are planning to invest the same amount into health and well-being programs in the coming year, while another 37 percent of organizations are planning to invest more.

Unfortunately, according to UK professional services firm AON, one in three companies fails to use any data analytics to inform and drive their corporate health and wellness strategies.

Wellness or well-being?

The Global Wellness Institute defines wellness as “the active pursuit of activities, choices, and lifestyles that lead to a state of holistic health.”

The institute adds that wellness is not a passive or static state but requires individuals to take action in key areas: physical health, mental health, emotional engagement, social connection, and physical environment.

According to Gallup, well-being is broader and explores a more holistic view. Its global research has found five elements of well-being: career, social, financial, physical, and community.

Metrics to monitor

Whether you call it wellness or well-being, your program’s return on investment will come from numerous sources. And like any other major initiative, you need to define objectives to know whether the program is making an impact and is worth the resources.

In other words, what specific purpose does the company want the wellness program to achieve? Do you want to reduce healthcare costs? Or is a main goal to improve morale?

Whatever the goals, be sure to evaluate the wellness programs in terms of concrete outcomes. For example, maybe you want to reduce absenteeism by 20 percent within a 12-month period. 

Wellness program provider Wellright outlines some key areas, in addition to medical expenses and workers' compensation claims, that benefit from a company’s focus on health and wellness.

Absenteeism. Chronic physical health conditions not only contribute to high outlay in healthcare expenses, but they also cause employees to miss work. The Wellness Council of America, for example, estimates that 100 million workdays are lost to workers’ lower back problems each year.

Employees experiencing mental health challenges such as depression, anxiety, and stress also report more absences from work.

Retention and turnover. Wellness programs can be an effective recruitment and retention incentive. The Principal Financial Well-Being Index reports that almost half of American employees of small- and medium-size companies say they would remain at their jobs longer because of employer-sponsored wellness programs.

More importantly, some wellness programs specifically focus on teaching employees how to manage stress and burnout, which are leading causes of turnover. In fact, employees who frequently experience burnout are 2.6 times as likely to be actively seeking a new job, reports Gallup, and the World Health Organization estimates that burnout costs the US $550 billion per year in productivity and employee churn.

Productivity. Poor employee productivity, also called presenteeism, can be defined as physically being at work but not working. The Journal of Occupational and Environmental Medicine estimates that the cost associated with presenteeism due to poor employee health is at least two to three times greater than direct healthcare expenses.

Employee engagement. Research from Gallup indicates that well-being and engagement are reciprocal, with each influencing the state of the other. Wellness programs can boost engagement in several ways.

First, they help employees deal with the problems outside of work that are related to their physical and mental health while also shedding light on work-related stressors such as time management. Group wellness challenges or on-site health programs likewise can foster a shared commitment and build community among co-workers.

What’s more, helping one another achieve personal wellness may flow into work goals. Finally, adopting wellness programs can demonstrate to employees that the company cares about their personal well-being.

Fixed costs

While those metrics encompass the financial and productivity benefits companies gain when they support employee wellness, a major part of your equation will need to account for how much those programs cost. Several factors affect the cost-benefit ratio.

Platform and administration. Wellness program platforms typically incur a monthly charge per employee and will depend on the volume of users and the itemized features they access.

Incentives. Some employees will need extra motivation to take advantage of offerings. Incentives can take such forms as cash, gift cards, discounts on memberships, and wearables.

Biometric health screenings. These tests measure vital statistics such as body mass index, blood pressure, cholesterol, blood glucose, and aerobic fitness. They set a baseline for programs and can help individuals establish goals and select activities. Because a third-party handles them, costs will vary.

Staffing. In addition to program administrators, take into account other staffing considerations. For example, will you need coaches for certain activities? Will they be internal employees, or will you contract outside help?

What about a steering committee to review results and guide future efforts? How will you account for committee members’ time away from other responsibilities?

Advertisement

Amenities and activities. The costs of perks such as an on-site gym, meal delivery service, and discounted memberships can fluctuate as people enter and leave individual programs.

Program promotion and education. You don’t want to offer a wellness program that no one uses. You will need to market it to boost participation, and that includes educating employees about the advantages as well as details regarding how they sign up for individual offerings or access materials.

Participation and perceptions

Simple participation is an important factor of any wellness program’s efficacy. Take into account all the features in place, and review how many employees are actively using them.

Then get granular with the data. Start by asking whether employees are aware of programs. Delve into which program aspects have the most usage and which features employees largely ignore.

Next, track whether the program is reaching stated objectives. If your aim is to decrease absences, track those. If you want to boost retention, track retention.

At the onset of launching a wellness program, for comparison, capture a baseline of such analytics as basic biometric data; health habits, such as exercise, diet, sleep, and alcohol and tobacco use; absentee data; and disability and compensation claims and dollar amounts. 

Although harder to connect and quantify, identify starting criterion and figures related to employee engagement. While comparisons of annual or monthly employee surveys will show an uptick or decrease in overall engagement, add targeted questions around your wellness efforts, work-related stress, and productivity so you can make diagnostic links in your analysis.

In addition to tracking hard data, periodically survey employees about their perceptions of your organization’s wellness programs. Ask: 

  • Do you believe these initiatives are making an impact on your work life? Personal life?
  • Have you experienced a reduction in stress? 
  • Are you seeing increases in your physical activity? 
  • Do you think wellness is encouraging a better work environment?

Return on investment

The equation to determine whether to invest in a wellness program is simple: Employees’ healthy behaviors lead to lower health risks, and decreased health risks can reduce chronic diseases, which by extension reduces organizational healthcare costs. Wellness advocates argue that worksites are doing more to prevent, arrest, and even reverse chronic diseases (think: workplace tobacco cessation programs).

The equation to quantify whether a wellness program is worth the effort and resources is more complex. However, by evaluating these metrics, you will hopefully uncover the impact you seek.

Read more from CTDO magazine: Essential talent development content for C-suite leaders.

About the Author

Ryann K. Ellis is an editor for the Association of Talent Development (ATD). She has been covering workplace learning and performance for ATD (formerly the American Society for Training & Development) since 1995. She currently sources and authors content for TD Magazine and CTDO, as well as manages ATD's Community of Practice blogs. Contact her at [email protected] 

Be the first to comment
Sign In to Post a Comment
Sorry! Something went wrong on our end. Please try again later.