To read the headlines, it’s a wonder if anyone knows what to really make of wellness programs.
“Corporate wellness programs: Not quite the cost savers”
[See also: Workplace wellness programs save money through cost shifting, study says]
“Wellness programs show hard-dollar savings”
“Study shows no quick savings from wellness programs”
“Employee wellness programs provide significant savings over time”
“How can an employer tell if its corporate wellness program is really working?”
Clearly, there is plenty of disagreement on the topic. It may be due to a lack of historical data. That may be why more than 75 percent of respondents to a recent survey by the National Business Group on Health said they do not know their return on investment for wellness programs.
But there are ways to measure the effectiveness of a wellness program. Among them are absenteeism rates, employee productivity and employee satisfaction.
It may take two or three years for a company to see the savings, but a couple of recent studies have reported some real bottom-line results.
A study by OptumHealth in Minnesota last year concluded that a long-term employee wellness program can offer an ROI of nearly $3 for every $1 spent. The key words here are long-term. “The study provides support for continued investment, but reminds employers that health management is a multi-year investment strategy,” stated the study lead author Seth Serxner in the report. Employers should expect a good three years before real savings appear.
A similar study by Pittsburgh-based Highmark Inc. reported that health costs rose at a 15 percent slower rate among employees participating in wellness programs, with average savings at $332 per employee per year. Again, the study reported that two or three years are needed for savings to materialize. The study did not factor possible additional savings by reduced absenteeism or lost productivity.
Reduced absenteeism and lost productivity are two important areas in determining the ultimate value of an employee wellness program.
“I’m not sure how you prove the ROI of wellness,” said Mark Krug, wellness director at Benecon in Lilitz, Pa. and sister company of ConnectCare3, also in Lilitz. “We look at how companies are measuring absenteeism and productivity.”
Absenteeism and productivity are more telling of key elements to corporate success: employee loyalty and engagement, said Krug.
Beyond that, Krug said much of the argument for wellness comes down to deductive reasoning and common sense.
“Healthier people are happier people. Happier people tend to make better decisions,” Krug noted. Even more simply, wellness and health are good things, which employers should want to encourage.
Maggie Craddock, owner of Workplace Relations Inc., in Exton, Pa., doesn’t need any convincing of the benefits of a workplace wellness program.
“A wellness program is a great idea,” she said. “It will prevent a whole lot of problems and enhance productivity. It makes all the sense in the world.”
This isn’t as clear cut as it might sound, said Craddock. At many organizations a wellness program means reimbursement for gym memberships but little more, she said. That isn’t a program. And it does nothing to encourage good behavior in the workplace itself, she noted.
“Many of the clients I work with and for would be the first to fund the program in the C-suite,” Craddock said. “They express personal support for the program to the company, but they would be the last to take advantage of it themselves.”
That is a recipe for wellness failure, Craddock said.
“An important hidden factor that can make or break a wellness program is the corporate culture,” Craddock said. “Is the top executive leading the charge? Are they leading by example?”
When corporative executives don’t avail themselves of the company wellness program, or lead a lifestyle that is anything but health, it sends a clear message that they don’t take the topic seriously, Craddock said.
Also, as the above cited studies have shown, a wellness program has to be sustained for it to have genuine value. That means improved health effects, as well as ROI.
Craddock recommends that a company start small with a wellness program. Target a few offerings for a pilot program. The program should draw some early adopters, and they can become champions for other employees. Corporate brass should engage with these program pioneers, and be seen doing so, she said.
As the effort takes root it will grow to include more employees and become part of the sustained culture.
But just to be sure it really does take root; Krug recommends the carrot over the stick approach. The company should tie an employee’s healthcare benefits contribution to their participation in offered wellness programs, he said. Should an employee not be inclined to participate in the wellness program, that is OK. But if they want to save some money, while simultaneously improving their health, there should be plenty of ways to do so.