Wellness Programs 101

March 14, 2012

Why Companies Consider Wellness Program Solutions for Employee Health

“Wellness” is the new buzzword when it comes to corporate health. Whether it is describing lack of illness, encouraging positive choices for personal health or maintaining work-life balance among employees, wellness is here to stay.

The corporate world has seen a drastic rise in wellness programs in the workplace with only 49 percent of businesses reporting a program in 2007 and a jump to 74 percent in 2011. With healthcare costs on the rise, promoting healthy lifestyles among employees can save corporations significant dollars on healthcare spending. Leaders at Johnson & Johnson, a larger corporation with a wellness program in place, estimated employee wellness programs saved the company $250 million on healthcare costs over the course of a decade, with a return of $2.71 on every dollar spent between 2002 and 20081. On average, wellness programs provide between a 3:1 and 5:1 return on investment2.

With healthcare costs expected to rise 8.5 percent this year and 75 percent of $2 trillion spent on medical care by businesses attributable to preventable illness3, more and more employers are recognizing the importance of wellness in the workplace.

Wellness programs cannot be cookie cutter reproductions of each other. What works for Johnson & Johnson, may not be effective with a smaller company. The key to an efficient program is working directly with employees to develop a customized program that reflects the wellness goals and needs of the company and its employees. In a large corporate office with a single, centralized location, on-site facilities might work best, while a company with multiple field offices might require a different approach.

Without the interest and input of employees, it is difficult to manage programming and maintain motivation and engagement4. Studies also show that focusing on all employees within the business, instead of just employees at high-risk for conditions shows a greater return on investment.

Wellness programs can include: tobacco-free policies and treatment benefits; general health and prevention screening; encouraging physical activity by providing social support and in the workplace environment; increase knowledge of nutrition. Based on an organization’s culture, available resources and employee engagement, developing a wellness program that suits the specific needs of the workplace can be lucrative investment.

A crucial key to a program’s success is the company’s executive leadership, which needs to be willing to allocate the human and financial resources necessary. With the support of executives, a tone of engagement and support is developed and increases the likelihood of success for the program in the long run.

Improving employee health is directly linked with reducing healthcare costs. Over an average four-year period, corporate wellness programs have shown to reduce sick leave incidence by 26 percent, workers’ compensation claim costs by 40 percent and disability costs by 24 percent5. An organizational commitment to wellness can improve a company’s bottom line, decrease absenteeism, presenteeism and preventable disease among employees and increase employee loyalty – voluntary attrition drops when a corporate wellness program is in place6.

In the coming weeks and months, Hoag Executive Health will be bringing you additional information on wellness in the workplace, as well as simple solutions to increase employee productivity and engagement.

Written by Leeann Garms
[1] http://hbr.org/2010/12/whats-the-hard-return-on-employee-wellness-programs/ar/1
[2] http://www.taggartinsurance.com/docs/ucsw-white-paper.pdf
[3] IBID
[4] http://www.prevent.org/data/files/initiatives/lbe%20kc2_final.pdf
[5] http://www.taggartinsurance.com/docs/ucsw-white-paper.pdf
[6] http://hbr.org/2010/12/whats-the-hard-return-on-employee-wellness-programs/ar/1