Why Wellness Programs Are Key to Your Company’s Health

It's nearly impossible to determine if employer-sponsored wellness programs reduce healthcare costs, but their real value may lie in other, less tangible areas.

employee wellness programs
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Traditional employer-sponsored wellness programs are often viewed as a way for businesses to reduce healthcare costs, but their true value may lie elsewhere; as incredibly effective ways to increase productivity, engagement and in their use as a recruiting, hiring and talent retention tool.

Wellness programs are an extremely popular benefit; according to research from the Society for Human Resource Management, more than 75 percent of the more than 380 HR professionals surveyed say their firms offer some type of wellness program to their employees.

In the past, these benefits have focused on areas like weight loss and management, smoking cessation and exercise and their cost has been justified by citing the savings organizations will gain by lowering overall healthcare costs. But the problem, according to Josh Stevens, CEO of wellness incentive solutions firm Keas, is that those monetary gains are a fiction, and only a fraction of those who need these programs use them.

Traditional Programs are a Waste of Money

"To be frank, traditional wellness programs are a waste of money; the employees who need them most woefully underutilize them and only a small segment of your employee population who are already healthy participates in these offerings, "says Stevens.

To really get healthcare costs down, what's needed is an integrated health management solution that links employees' health data with available benefits to better coordinate prevention and care, according to Stevens. Health Management solutions, which replace existing wellness programs, acknowledge that to change health behavior and outcomes you have to integrate and simplify the benefits experience for employer and employee and make these programs easily accessible and personalized.

Without the back-end data integration across multiple benefits vendors and front-end user experience allowed by this integration, you end up with a useless, siloed wellness program used by a painfully small percentage of your employees. The most effective way to drive value from any health or wellness program is to maximize long-term engagement in these programs by identifying the potential for health concerns and showing employees how their benefits can help overcome those. "For instance, an employee participates in a biometric screening and finds out she is pre-diabetic. This employee, if provided a health management program, would ideally be using an application for health consumers that included an online and mobile consumer-driven experience that offered specific steps to take to combat her health risks. This integrated health management program would easily highlight relevant health benefits offered and show the employee how those benefits could be used to address their health challenges," says Stevens.

Health management solutions can drive true, meaningful behavior change across organizations' at-risk populations. Employers must first leverage existing health benefits and integrate these seamlessly with incentive programs into an easy-to-access web and mobile experience. This cost savings due to a reduction in administrative overhead is significant even before addressing employee health outcomes.

Beyond Technology, Wellness Programs Must Focus on Culture

Many progressive organizations already are offering more innovative and unique approaches to wellness programs that are a better fit for their employees' lifestyles and interests, like an on-site yoga studio, cafeterias offering organic food, even manicures and massages as part of their employer brand.

The average tenure of an employee is between three to five years at any organization, which makes it difficult to measure the short-term ROI of wellness programs in terms of healthcare cost savings for individual employees, according to Donna Levin, co-founder and vice president of Policy, CSR and workplace solutions at Care.com.

But before you discount the value of your wellness initiatives, consider how they fit into your company culture and your employer brand and how they can be used to increase intangible factors that are crucial to business success: engagement, productivity, loyalty and morale, for example. "It sounds hokey, but showing employees you care about them by investing in their well-being can improve engagement, loyalty and productivity. I know that here at Care.com, the sign-up list for our on-site manicures and massages fills up in minutes, and there's a lot of excitement around the yoga studio we installed in our new office space," Levin says.

Better Health Equals Greater Engagement

Research from Gallup shows that employee engagement is positively correlated with better health -- engaged workers are less likely to be obese and have chronic conditions, as explained by Harvard Business Review. Numerous studies point to the fact that highly engaged workforces result in more profit for their employers; engaged and healthy employees miss work less often, are easier to retain, and are significantly more productive, says Keas's Stevens, and that organizations with highly engaged employees achieve greater net income than organizations whose employees lag behind on engagement.

Wellness Benefits Help With Recruiting and Hiring

Whether or not wellness programs help business curb rising healthcare costs is a matter of debate; it can be difficult to attach a dollar amount to healthier, happier, more engaged employees, but wellness programs also provide value as a recruiting and hiring tool.

Today, employees and especially job-seekers, almost expect a certain level of wellness benefits -- perks like discounted gym memberships and on-site facilities are considered fairly commonplace. More lifestyle-type wellness benefits, like the weekly manicures and onsite yoga studio Care.com provides, are gaining popularity too, says Levin. "From an employer's perspective, these offerings have value. There's also the cost of doing nothing. Meaning, if employees and job seekers expect wellness programs and you don't offer them, then that's going to put you at a competitive disadvantage when it comes to attracting and retaining talent," Levin says.

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