The Impact of Employee Wellness Programs on Businesses

novWritten by Tess C Taylor

With the wave of concern over the proposed health care reform laws scheduled to go into effect early in 2014, many organizations are examining ways of reducing health insurance premium costs while maintaining a productive workforce. Under President Obama’s Affordable Care Act of 2010, a vast majority of employers must provide greater access to affordable health care insurance and services.

A big push is happening to educate employees about preventative steps and self-care that can result in better health and longevity in their careers.

Perhaps one of the greatest opportunities to embrace this new way of thinking is by including a corporate sponsored health and wellness program in the mix. When both the company leadership and employees get behind a wellness program, everyone wins.

How do companies view employee wellness campaigns?                              

In 2012, the US Chamber of Commerce released a National Small Business Association (NSBA) report that indicated the results of a small business survey. Over 93 percent of the companies polled said that employee health is important to their business bottom line. Yet, only 22 percent were offering corporate wellness programs at the time of the survey. This indicates that there is still some work to be done when influencing businesses on the intrinsic value of these programs to the company.

What are the main concerns of companies today about employee wellness?

Even though just a quarter of companies currently offer full-on wellness campaigns, most businesses are still very concerned with the danger of not having a program in place. Interestingly enough, the NSBA report showed that, “Among the health and wellness issues facing employees, the top concern among small-business owners was high stress levels, followed by psychological well-being, weight management, and alcohol or other drug habits.”

Other concerns can and may include high rates of employee absenteeism, tardiness, and turnover. When employees are not given the tools and support to lead healthier lives, they tend to become less productive on the job. This cuts into the profitability of the company, and ultimately the quality of the products and services offered.

The biggest concern for most employers is the rapidly rising cost of health care for all. A 2013 Towers Watson and National Business Group on Health study advised that, “employers expect average total costs for active employees to reach $12,136 in 2013, up 5.1% from $11,457 in 2012.” Additionally,  compared to five years ago, employees contribute on average 42 percent more for health care today than the 32 percent increase for employers. Premiums for health care insurance continue to climb, even amid health care reform and new private insurance offerings.

What is the impact of an employee wellness program on the average business?

There are multiple studies that indicate the positive effects an employee wellness program can have on a business of any type or employee population. It comes as no surprise that health care premium cost savings are the number one reason for implementing a wellness program. A follow-up study conducted by Harvard researchers in 2011 reported that medical costs are reduced by as much as $3.27 for every dollar spent on a wellness program, while employee absenteeism-related costs drop by as much as $2.73 for each dollar spent on wellness initiatives.

Other positive impacts of a well-managed corporate wellness program include:

  • Improved employee morale and loyalty
  • Decreased sick leave abuse and absenteeism
  • Competitive advantage in recruiting new employees
  • Reduced employee turnover rates
  • Lower catastrophic and long-term health costs

How can a business get the most from an employee wellness program?

There are several keys to the successful implementation and maintenance of a wellness program in order for the company to experience maximum return on investment. First, the employee wellness program must fit the needs of the entire employee population, so that all demographics may take advantage of this support. Second, the wellness program must be easily accessible and simple to adopt. Web-based employee wellness programs combined with on-site wellness support tend to work the best. Third, the company must sell the idea to employees and provide meaningful incentives to get them to participate. Setting team goals and having all members of the management team participate are good practices. Lastly, an employee wellness program must be consistently promoted, and education must happen on a regular basis. Using these guidelines, your business should experience the most positive results of rolling out an employee wellness program.