ROI on Wellness Programs: Is it Worth It?
If you’re thinking about introducing an employee wellness program, you’re likely wondering if it’s something your company can afford. Although large organizations may have the resources to implement a complete program, small and mid-sized businesses must stretch their budgets farther and ensure that every dollar spent on an employee offers a decent return on investment (ROI).
Many organizations have made employee wellness a top focus in recent years due to several converging causes, including widespread burnout, growing awareness of the relationship between mental and physical well-being, and, most recently, the global pandemic.
Employees are becoming more aware of their health and well-being, and they are looking to their companies for help. As the demand for employer-sponsored wellness programs develops, businesses must understand the ROI on wellness programs.
What is an Employee Wellness Program?
Employee wellness programs are a type of health benefit that many businesses offer in addition to health insurance in one form or another. These programs assist workers in staying healthy or, in certain situations, improving their health. Wellness program ideas range from assisting employees in quitting smoking, losing weight, and providing gym memberships, to incentive programs that reward participation.
Unlike insurance plans, which require employers to sign up for and select choices for at least a year, wellness programs can be ongoing or one-time events or activities.
It’s perfectly reasonable to ask if wellness programs are merely a fad or if the ROI for wellness programs is worth it if you’re considering instituting one.
However, the following real wellness impact factors are essential to keep in mind:
- Employees who adopt healthier practices are less likely to acquire health problems.
- A decrease in health-adverse behavior results in fewer insurance claims for avoidable diseases.
- The fewer claims submitted, the lower the predicted future claims costs and, as a result, the cheaper the benefit renewal costs for employers and workers, by extension.
- Employee engagement is higher when the company’s culture is strong due to a unifying wellness program.
What are the Benefits of an Employee Wellness Program?
While mental health challenges are not a new phenomenon in the workplace, the sharp drop in employee mental health has pushed the topic to the forefront in recent years.
The Harvard Business Review evaluated survey data and found that the prevalence of mental health concerns rose from 2019 to 2021. As a result, the facts and statistics employee wellness programs help mitigate these issues:
- Increased attrition: 68% of millennials (50% in 2019) and 81% of Gen Zers (75% in 2019) have willingly or involuntarily left jobs due to mental health issues, compared to 50% of respondents overall (34% in 2019).
- 76% of respondents said they had had at least one symptom of a mental health disorder in the previous year, up from 59% in 2019.
- Nearly two-thirds of respondents said they had discussed their mental health with someone at work in the previous year. Only 49% of respondents said talking about mental health at work was a pleasant experience. That same percentage said they received a favorable or helpful response, similar to 2019 statistics.
As employees seek more mental health help from their employers, HR executives and managers must be prepared to deal with these issues when they arise.
There are several reasons why businesses should promote and encourage workplace health, including:
Employee Health Habits
Every wellness program aims to change and improve employee behavior. According to a study by the U.S. Chamber of Commerce, statistics on employee wellness programs suggest that they do contribute to healthier lifestyles. Accordingly, employee wellness programs have been shown to inspire employees to smoke less, consume better foods, exercise more, and handle stress more efficiently. Wellness programs have also been demonstrated to aid employees in reducing and managing the symptoms of depression, therefore enhancing their general well-being and increasing office productivity.
While stress is inevitable in the workplace, a wellness program may decrease or eliminate long-term stress, which lowers productivity and contributes to unneeded sick leave. You may increase your team’s performance and employee retention by implementing a wellness program that reduces pressure in the workplace.
Reduces Healthcare Fees
Wellness initiatives may save a business money in lower healthcare bills. Employees are less likely to become ill or injured on the job if the company’s workforce is healthier. Employees who engage in wellness programs seek medical attention less frequently, saving money on healthcare for themselves and the company.
Employees are more productive, and the quality of their work increases when they perform together as part of a team. They’re also more creative because cooperation leads to improved collaboration and the production of more inventive ideas. Participating in wellness activities outside of the job can aid with team bonding and boosting workplace communication and camaraderie.
What is the ROI on Establishing Wellness Programs?
It can be difficult to break down the ROI on wellness programs as there are numerous plans and various factors within each one. However, according to employee wellness programs statistics, reductions in healthcare-related costs are the most well-documented benefits of corporate wellness initiatives.
The most popular wellness initiatives, according to Fidelity, are designed to promote employees’ health:
- Smoking cessation support is included in 91% of programs.
- Physical exercise is included in 86%.
- Weight management is included in 79%.
Most company wellness programs include investments in employees’ physical well-being since they directly influence the onset and severity of chronic illness. Employers gain from lower healthcare expenditures when employees are less chronically ill.
In a study of the ROI on wellness programs, Harvard researchers discovered that employee wellness programs save companies $3.27 for every dollar spent in health care costs.
With a case study focused on high-risk employees, research published in Harvard Business Review established the ROI of employee wellness initiatives. Over half (57%) of participants who were categorized as high risk at the outset of the trial (according to various characteristics such as body fat, blood pressure, anxiety, and so on) were converted to low-risk status by the completion of the six-month employer-sponsored program. Consequently, the employer’s medical claim expenditures per participant decreased by $1,421 over the prior year. As far as wellness programs ROI, the employee wellness program resulted in a $6 savings for each dollar spent in health care costs alone.
Enhance Your Wellness Programs with Eden Health
Our collaborative care solution unifies primary care and mental health services. If you want to reap the greatest ROI on wellness programs, contact Eden Health to request a demo today.