Why Wellness Programs Are Today’s Hottest Employee Benefit

Published: Jan 08, 2018 By

An increasing number of companies are putting the "human" back in human resources with employee wellness programs. In the past 12 months, nearly one-quarter of organizations have enhanced their employee wellness benefits, according to the Society for Human Resource Management, with more improvements made in wellness than in any other benefit area. SHRM's 2017 Employee Benefits Survey reports that three out of five employers offer some form of wellness program, whether simple (providing wellness resources or information) or complex (offering screenings and interventions).

Wellness program

When you consider the staggering costs of employee burnout and disengagement, it's surprising it's taken corporate America so long to embrace wellness. Actively disengaged employees cost U.S. companies an estimated $450–$500 billion each year, according to the Global Wellness Institute, with discontent manifesting itself as poor performance, absenteeism and ultimately employee turnover.

The truth is, we spend a lot of time at work—38 percent of each weekday, per the Global Wellness Institute. If we're unhappy there, it's going to spill over into physical and mental health issues. In the institute's 2015 survey on workplace wellness (conducted in conjunction with Everyday Health), 68 percent of employees said their physical health was affected and 84 percent said their mental health was affected if they perceived their company to be "non-caring." Implementing a wellness program signals to employees that their company cares about their well-being and is willing to invest in it.

How a Wellness Program Benefits the Bottom Line

SHRM's 2016 Strategic Benefits Survey offered three statistics any CEO will find compelling:

  • 88 percent of companies with wellness programs reported their efforts were somewhat or very effective in improving employee health.
  • 77 percent said their programs were somewhat or very effective in reducing health care costs.
  • 53 percent of companies want to create workplace cultures that promote health and wellness.

Lower health care costs, decreased absenteeism, improved morale and loyalty—sounds like good ROI for any company. A 2013 RAND Health Study commissioned as part of the Affordable Care Act corroborated the positive effects of employer-sponsored smoking cessation programs, as well as found increased physical activity, higher fruit and vegetable intake, and lower fat consumption among wellness program participants.

Designing a Successful Wellness Program

Achieving noteworthy results from a wellness program isn't as easy as emailing a few healthy eating tips once a month. To be successful, a wellness program must be thoughtfully designed and employee-centered—otherwise, no one will participate in it. If employees don't perceive the program wasn't designed with them in mind—or if they think it's too complicated or inconvenient to use—they'll simply take a pass. (Only two-thirds of employees take advantage of wellness programs, according to the Global Wellness Institute.)

When designing a wellness program, start by following these five steps adapted from SHRM recommendations:

  1. Determine your goal.  Do you want to decrease health care costs? Motivate employees to participate? Stop turnover?
  2. Decide whether your company will administer the program or outsource it to your insurance provider. Most health insurers offer some form of wellness program for group participants.
  3. Establish a budget and expected ROI. Will you measure success in terms of lower premium increases? Or are you more concerned with a qualitative result, like improved morale?
  4. Determine how you will incentivize employees. The RAND study reports that half of wellness programs included some of incentive, with 84 percent of programs at companies with 50 or more employees offering some type of positive reinforcement. Incentives might be financial, like cash bonuses or premium-related, or they might be "novelty" (gift cards, swag, etc.). But be cautious as you design an incentive program: Both the ACA and the Health Insurance Portability and Accountability Act (HIPAA) regulate implementation of incentives. Employee privacy is a concern, as well as ensuring those who are physically unable to participate have access to a reasonable alternative.
  5. Communicate with employees about your program. Oftentimes employees aren't participating in wellness programs because they just don't know about them. Explain the program clearly, and keep promoting the program month after month. It's a good idea to designate certain employees as wellness ambassadors charged with spreading the word to colleagues and encouraging participation.

One Size Doesn't Fit All

As you design a program, keep in mind that employees of different generations have varying opinions on what type of program is most beneficial. Generation X and Baby Boomers are more focused on tangible benefits such as on-site recreation and nutritional counseling than Millennials, according to the Global Wellness Institute. Younger workers are more concerned with an intangible: feeling their company "cares." (Still, Millennials appreciate subsidized gym memberships, the institute reports.)

No matter what type of program you create, make sure you have employee buy-in. Put your people first, and your company will reap the benefits.

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