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National Council on Strength & Fitness
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Corporate Wellness Programs Return $6 for Every $1 Invested
 
 
 

In the past, companies that offered a wellness program for their employees were considered good-hearted, but for many the benefit really only provided an add-on for those already physically active. However, in today’s market there is a growing interest in the role exercise plays in productivity and fiscal well-being. Initial proponents looked at corporate wellness from a perspective of workplace disease prevention and the wellness programs were aimed at lowering health costs. Due to the fact that employees spend most of their waking hours in their work environment, the workplace is becoming a natural place to invest in employee wellness. Some of the benefits of an effective corporate wellness program are savings in health care costs, increased employee productivity and employee retention, among others. Enough data has been collected to justify the spending on these programs in exchange for improvements in employee productivity and a significant reduction in missed work days. Companies like Johnson & Johnson which have been implementing wellness programs for their employees have reported saving $250 million on health care costs within a decade; both Citibank and Bank of America reported an estimated saving of $4.5 dollars in medical expenditures per dollar spent in employee wellness.

 

In an attempt to quantify the return on investment for corporate wellness programs, a current review analyzed 36 studies that examined several factors including the characteristics of wellness programs, the methods of delivery and the focus of the intervention; and the consequent impact of these programs on medical spending and absenteeism. Figure 1 shows the most frequently used methods of wellness programs; 80% of the companies used the health risk assessment, a survey that gathers baseline self-reported health data from the employee to tailor the employer intervention. It is a common practice among companies to provide a voluntary health assessment in the form of a clinical screening risk assessment. Other programs do not provide the assessment but rather provide an on-site gymnasium or workout facility and encourage employees to use it. A second layer of interventions employs the use of self-help education material, individual counseling with health care professionals or on-site group activities led by personal trainers. The main focal point of these programs was weight loss and fitness; representing 60% of the programs’ emphasis, whereas the other leading program emphasized smoking cessation (50%). In addition, 75% of the wellness programs concentrated on multiple risk factors such as stress management, back care, nutrition, alcohol consumption, blood pressure, preventive care, obesity and smoking.

 
 

As in any project that is presented at the corporate level, the wellness programs need to prove financially beneficial with a timely return in order to justify implementation. The aforementioned review calculated the impact of the wellness programs on medical spending and on absenteeism. The programs reported that the wellness interventions produced $358 in savings through reduced health care costs per employee per year, while costing the employer $144 to run the corporate wellness program per employee per year. This yields an average return on investment of $3.27 per each dollar spent in the wellness program. This number becomes even more attractive when the absenteeism return is calculated; if the average hourly cost of an absentee employee is calculated, it averages to $20 per hour using 2009 wage rates. When implementing corporate wellness programs, companies saved around $294 per employee per year in absenteeism while investing only $132 per employee per year, yielding an average of $2.73 per each dollar invested. Therefore, if both the medical spending and absenteeism are taken into consideration, companies have shown to save an average of $6 per each dollar invested in the corporate wellness programs, $3.27 and $2.73 for medical spending and absenteeism respectively. Although these numbers are attractive, there are additional benefits than cannot be quantified and further increase the return of the company’s investments, including improved health, reduced turnover and employee retention as well as lower costs for public programs such as disability insurance and Medicare.

 

It should be clear that the efficiency and positive impact of corporate wellness programs justify spending, however, the implementation of these programs is not as easy as perceived. In a recent article published in the Harvard Business Review, Leonard Berry has identified the 6 pillars of an effective workplace wellness program:

 

Pillar 1: Multilevel Leadership
Engage leadership at multiple levels by creating a culture of health at all levels. From the C-suite to entry level, employees need to have “wellness” as their job description. Passionate, persistent and persuasive leaders need to give the example to avoid the guilty feeling about taking fitness breaks among the lower-level employees.

 

Pillar 2: Alignment
A wellness program should be a natural extension of a firm’s identity and aspirations. At this level, it is important to consider that employees need to perceive the program as part of their beliefs and not an obligation to the company. This will require planning and patience to achieve a cultural shift at all levels, employer and employees.

 

Pillar 3: Scope, Relevance and Quality
Wellness programs must be comprehensive, engaging, and just plain excellent. Otherwise, employees will not participate. This is one of the most challenging issues in corporate wellness since it is easy to have the active employee participating in these programs, but the sedentary employee is the one that will challenge the program and who will require extensive retention strategies. Characteristics such as individualization (find employee’s interests), attractiveness (make it fun), uniqueness (provide a signature program) and quality (try for the best in the market); as well as considering other areas than fitness (e.g. stress reduction) will increase the compliance to the wellness programs.

 

Pillar 4: Accessibility
Aim to make low or no cost service a priority. True on-site integration is essential because convenience matters. If the wellness program is a free benefit for the employee it will have a better chance to increase its attractiveness level; moreover, if the program is integrated in such a way that co-workers may enjoy common interest activities, this will also work towards the successfulness of the program. Some companies are also providing mobile services such as online resources to deliver wellness messages and the use of apps.

 

Pillar 5: Partnerships
Active, ongoing collaboration with internal and external partners, including vendors, can provide a program with some of its essential components and many of its desirable enhancements. This is a smart strategy to lower the internal cost of the program and to increase the quality without being limited by the budget.

 

Pillar 6: Communications
Wellness is not just a mission – it’s a message. How you deliver it can make all the difference. Sensitivity, creativity, and media diversity are the cornerstones. Some managers are using strategies such as a walking meeting instead of a lunch meeting. Behavioral changes require a multi-level approach to be effective in a long run.

 

As previously indicated, the evidence suggests that employer-based wellness initiatives may not only improve health but may also result in substantial savings for the company. In addition, employers find that there is a positive impact in the productivity level of the employees exemplified in the reduced absenteeism rate. Progressive companies should consider the 6 pillars of an effective workplace wellness program to maximize the positive outcomes of these programs. Personal trainers and health-related professional have a great working possibility in this area, especially those who are creative and have the tools to add substance to each of the six pillars.