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How effective are wellness programs?

Do wellness programs actually work? Let's dive into wellness programs and how they save money and improve employee morale.

Wellness programs encourage preventative medicine with health and wellness education to keep employees healthy and reduce medical costs. They are considered a way to improve employees’ health and productivity levels at work. In 1979, Johnson & Johnson was the first company to launch a wellness program which led to others jumping on board. In 2020, 81% of companies offered a workplace wellness program.

From starting off as a workplace perk, they are now commonly a part of a company’s benefits package. A robust package includes fitness classes, health screenings, nutritional information, and educational seminars on habits such as reducing alcohol intake and smoking.

Let’s take a look at the benefits of these programs and then can we will dive deeper into whether they do what they say on the tin.

Benefits of wellness programs

  • Improved health for workers: Wellness programs offer a wide array of physical and mental health options for employees. Workers can avail of gym classes or sometimes psychologist sessions which keep them active and mentally well, reducing the possibility of burnout at work. Workplace stress is a huge issue for companies and these initiatives are a great way to teach employees how to manage stress better.
  • Improved healthy habits: Improving your health isn’t something that just happens overnight. Wellness programs often encourage behavior changes such as increasing physical activity, improving sleep, and reducing alcohol intake.  These programs encourage maintaining good habits rather than just one-off activities. Engaging in regular healthy activities is proven to lower health risks and the risk of chronic diseases.
  • Reduced healthcare costs: You can reduce your company’s healthcare costs through a wellness program. Workers who engage in physical activity and lead a healthy lifestyle will be less stressed and healthier. This means less sick days taken and as a result, less expenditure going on sick pay.
  • Improved productivity: With employees’ health being at a high it means they are more productive in the workplace. They don’t need extra days off or sick leave etc. Preventative healthcare before the fact is always more impactful than trying to remedy the issue.

So do wellness programs actually work?

Decreasing health costs:

Despite it being one of the main reasons behind having an employee wellness program. There is little research that demonstrates they decrease company health costs. It is extremely dependent on the individual program and how thorough they are. However, comprehensive programs do see saving in healthcare costs for a business. Health Affairs conducted 22 studies that compare wellness programs to related healthcare costs. The average return on investment for a program is 3.27 meaning for every dollar spent on the program, they save $3.27 in healthcare costs.

Improving productivity:

Low productivity at work costs companies a lot of money. In fact, costs related to low productivity are around 2 to 3 times larger than healthcare costs. Low productivity can be caused by a lot of things related to a person’s job specifically. However, a person’s health and daily habits also will have an impact on their productivity levels. Employees who smoke, have bad diets, and don’t exercise regularly can also have a substantial impact on their productivity levels. These unhealthy habits may lead to increased health risks down the line too.

Wellness programs that tackle these unhealthy habits will lead to increased productivity. Employees are more likely to feel more energized and engaged in work when they are leading a healthy lifestyle. A recent study found that employees who participated in wellness programs experienced a 5% increase in average productivity.  This is roughly equivalent to an additional one extra day of productive work per month per employee.

Reducing absenteeism:

Wellness programs are proven to have an effect on absenteeism at work. This can be accrued to the fact that employees with good health behaviors and lower stress levels have lower absenteeism levels than those with the opposite. Similar to the above point, wellness programs with an emphasis on changing health habits will impact whether or not employees are less absent at work. Employees who have a healthy work-life balance, are more motivated, and have high morale are far less likely to be absent from work.  Ensure your program is robust enough to tackle health habits and you are guaranteed to be rewarded for it.

Improving employee retention:

Wellness programs are often advertised in job listings as part of a company’s overall benefits package. There isn’t much research that proves that they directly impact the recruitment and employee retention of an organization. There are a lot of other reasons why people choose to join and stay at a company. One of these is a competitive benefits package. Companies will compete with one another with their benefits in order to attract the best talent. If your company offers a good program as part of a robust benefits package then it can impact whether candidates want to join your business.

As well as that, it can retain your existing workers because they won’t want to leave a good benefits package behind for a new company.  Your wellness program tells your employees that you care for them and want them to happy and healthy at work which in turn will improve morale.

Some final thoughts…

So we have seen wellness programs absolutely impact the productivity levels at work and increase healthy habits for many employees. However, it is very dependent on the program itself. You need to ensure your wellness program actually tackles the right things and is working towards building ongoing healthy habits amongst workers. Just having a wellness program in place won’t do much. It needs to be reviewed constantly and seen as a competitive part of your benefits plan.

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