You might already know the positive impact wellness programs can have on employee productivity and morale, but did you know they can save your business money in the long run too? By investing in wellness programs, businesses can foster healthier employees, leading to lower healthcare costs, fewer insurance claims, and potentially lower health insurance premiums.

What Are Wellness Programs?

Wellness programs are simply company-led initiatives that employers design and implement within their organizations to drive healthier behaviors and lifestyles among employees.

Every wellness program is different, yet they all contain similar activities and resources. The ultimate goal is to support employee health. This can be done by layering together things like health education, fitness coaching, mental health support, health insurance and savings plans, preventive health screenings, nutritional guidance, and more.

The exact wellness program you choose to design will depend on several factors and circumstances that are unique to your business. This includes your budget, number of employees, and the expectations of your employees.

Understanding the Impact of Wellness Programs

There’s been a ton of research conducted on the impact wellness programs have on the overall health of employees, as well as the positive impact on the businesses that implement the programs. This includes better health, lower risk of blood pressure, lower cholesterol levels, and greater job satisfaction.

Several companies have reported substantial health improvements among their employees after implementing wellness programs. For instance, Johnson & Johnson's wellness program reportedly saved the company $250 per employee per year due to reduced healthcare costs. Their employees also had a 26% reduction in lost work time due to health issues.

Another example is Google's wellness program, which includes on-site healthcare services, gyms, and healthy meals. Employees have reported improved physical and mental health with decreased sick days taken and increased productivity.

Wellness programs encourage healthier lifestyle habits, which can lead to improved health outcomes. Regular exercise, a balanced diet, stress management, and regular health checkups – all aspects promoted through wellness programs – are key to maintaining good health. By supporting employees in these areas, businesses can help prevent chronic diseases, reduce healthcare costs, and create a healthier, happier workforce. In the long run, this can contribute to lower insurance claims and potentially lower health insurance premiums for businesses.

Calculating Your ROI on Wellness Programs

If you’re going to take the time to invest in a wellness program for your employees, you want to make sure it generates a healthy return on investment (ROI) for your business. The question is, how do you know?

The ROI for a wellness program is calculated by comparing the program's cost to the savings generated, mainly from reduced healthcare costs and improved productivity. In simple terms, it's the net savings (total savings minus program cost) divided by the program cost.

For instance, if a company invests $50,000 in a wellness program and sees a $100,000 reduction in healthcare costs, the ROI would be ($100,000 / $50,000 = 2). That means the ROI is 200 percent. If it only reduced costs by $10,000, it would be a 20 percent ROI. (Not good!)

There are numerous factors that can impact the ROI of your program. First off, consider the design and implementation. A program that’s tailored to meet the specific needs of your employees – not just general initiatives – will work best.

Secondly, the demographics and health status of employees can impact ROI. Companies with a high prevalence of lifestyle-related health issues might see greater savings as these cond itions are often preventable or manageable through lifestyle changes.

Finally, you have to consider the culture and environment. If you have a culture where people are supportive and encouraging, your results will be better than in an environment where there’s more hostility and “me vs. you” mentalities.

Getting Started

Don’t be overwhelmed by the apparent enormity of starting and launching an employee wellness program. Simply start with a concrete goal and outline the steps you need to take. When you have a clear vision in mind, all of the smaller details will get taken care of along the way. And don’t aim for perfection! The emphasis should always be on progress. Small steps taken consistently will produce major results.