Are you optimizing the return on investment of your company's employee wellness programs? According to research, probably not.
The popularity of workplace wellness programs has skyrocketed in recent years, the larger the organization, the more likely they are to offer corporate wellness programming. The Society for Human Resource Management reported that in 2015 80% of employers offered some level of preventative health services and/or information to employees. Some reports suggest that 90% of employers with over 200 employees offer employee wellness programming. With so many companies investing in workplace wellness, it may be surprising to learn that only 30% of companies evaluate and measure how these programs are impacting the health and wellness of their employees1. Even fewer assess the health status and health needs of their employee population before deciding what wellness services to invest in. Not all wellness programs are created equal and with continuously mounting pressures on decision makers to demonstrate the business impact of their investments, it’s especially important to partner with a wellness provider that delivers measurable results.
To understand the return on investment of employee wellness programs, it’s important to analyze how exactly unhealthy employees impact their business’ bottom line. It is estimated that nearly half of employers in Canada don’t consistently track employee absenteeism nor do they track the specific causes of individual absentee instances. Also, because most employers focus only on absenteeism when analyzing wellness program ROI, and neglect to account for the indirect and longer term costs associated with poor employee health, there is a tendency to underestimate such costs. Time away from work is a large part of the wellness ROI equation – particularly when looking at near term and direct costs. However, the longer term impacts of poor employee health are often larger than employers realize.
“The cost of recruiting and training replacement workers and the cumulative negative impact that unhealthy employees have on productivity, workplace injury risk, and employee morale far exceed the costs of absenteeism” explains Dr. Mike Wahl, Senior Director of Wellness Strategy & Solutions at Medisys Corporate Health (Medisys). Wahl believes that the key to optimizing the ROI of wellness programs is building programs around employee health data obtained through biometric screens. “The majority of companies that seek to implement wellness programs are not given the right guidance on the collection of employee health metrics to track impact” explains Wahl. “Most wellness providers merely recommend employee health interventions on a consultative basis; very rarely do they execute the interventions onsite and then accurately monitor employee health outcomes over time,” says Wahl.
How much do unhealthy employees cost your business? Consider the statistics below:
- Canadian employees with two or more lifestyle risk factors (eg. being sedentary, being overweight or obese, smoking, or high alcohol intake) are absent 50% more often than those without the risk factors, and cost their employers 2-3 times more in health benefit costs2.
- A typical smoker costs their employer $2,500/year (on an annualized average basis)3.
- The number of days lost from work due to illness among individuals with diabetes can equate up to 78.5 days per year4. Reducing refined sugar intake can significantly decrease an employee's diabetes risk.
- Each year, employee absenteeism equates to an estimated $16 billion or more in direct lost revenue to Canadian employers5.
- Employees returning to work after a significant illness are more than likely to require ergonomic support6.
- The total cost of obesity alone to Canadian employers is about $1.3 billion per year7. New research suggests a diet low in carbohydrates may be the most effective way to lose weight.
- There is a linear relationship between obesity and number of workers’ compensation claims, lost workdays, medical claims costs, and indemnity claims costs8.
- Overweight and obese employees spend 35% on health services and 77% more on medications than their healthy weight counterparts.
Developing a wellness program to deliver sound and measurable returns is not as elusive as some may think. It’s just a matter of assessing the health issues and needs of the employee population through collecting vital metrics, and then understanding the associated direct and indirect costs of these health issues to the organization. For example, employers with safety-sensitive work environments typically have different needs than those with office environments because the safety performance of employees in safety-sensitive environments is a substantial cost driver for the organization. It's important to note that safety performance is directly linked to employee health and quality of life.
Wellness programs come in all shapes and sizes. Some wellness programs are built around boosting employee activity during the work day – for example running corporate fitness challenges or giving employees access to standing desks, walking desks, corporate gyms, or onsite fitness classes. Whereas other programs are focused on encouraging healthy eating in the workplace – such as offering rewards to participate in corporate healthy eating challenges, outfitting cafeterias with salad bars and nutritious meal options, stocking vending machines with healthy snacks, or offering onsite dietitian coaching services and “lunch & learns”. The majority of wellness programs in place today, however, lack meaningful health outcome measures that enable employers to track and demonstrate return on investment over time.
Many newer wellness programs involve collecting annual employee health metrics through highly sensitive biometric screening tests and health risk assessment questionnaires; which can cost organizations as little as $75/employee annually. After the employee health data is collected and interpreted, employers receive anonymized aggregate reports with recommendations on how to address their employees’ key health issues. “Biometric screening data is important because it enables physicians to identify the root cause of health issues that may be impacting an organization” says Dr. Vivien Brown, VP of Medical Affairs at Medisys. “It’s important that wellness programs not only assist companies in better understanding their major risk factors, but also serve to address the root causes of these issues and then set clear and measurable objectives for employee health” adds Dr. Mike Wahl.
When it comes to workplace wellness, programs that address nutrition, fitness, medical, lifestyle, and psychological risk factors holistically tend to have the best outcomes. “Early interventions through targeted preventive health programs have been shown to alter employee behaviours and health outcomes, which minimize long-term costs”, says Wahl. One area of employee health that is attracting increasing attention from wellness plan administrators is mental health and emotional wellbeing. “Mental health is one of the most important components of a wellness program,” believes Wahl. “It’s important to assess your employee’s emotional wellbeing through health risk assessment questionnaires or other tools, and then incorporate wellness services that address these needs.”
“If I was to give only one piece of advice to employers who are interested in workplace wellness it would be get your employees moving,” adds Dr. Kathee Andrews, President of the Toronto Branch of The Federation of Medical Women of Canada, and family physician at Medisys. “The health benefits of regular exercise are endless – aiding in the prevention of everything from heart disease, to several forms of cancer, to dementia, to depression, and anything in between. Whatever the activity – running, walking, golfing, or just moving around the office – just get your employees moving.”
Medisys is Canada's leading national provider of executive health benefits and employee wellness solutions. Try some of our FREE employee health resources:
- 30 day no refined sugar challenge
- The complete low-carb living guide
- Strategies for reducing workplace stress
- What's standing in your way
- Healthier takeout lunches guide
- Free employee wellness tool kit
- Bosh, D., A new magazine for a new era in workplace health. (2007) http://www.benefitscanada.com/benefits/health-wellness/from-the-editor-8848
- Ontario, H.S., The business case for a healthy workplace, W.S.P. Services., Editor. 2011.
- Canada, C.B.o., Smoking and the bottom line: the costs of smoking in the workplace, C.B.o. Canada, Editor. 1997: Ottawa.
- Vamos, E.P., et al., Comorbid depression is associated with increased healthcare utilization and lost productivity in persons with diabetes: a large nationally representative Hungarian population survey. Psychosom Med, 2009. 71(5): p. 501-7.
- Canada, T.C.B.o., Missing in Action: Absenteeism Trends in Canadian Organizations. 2013. p. 11.
- Canadian_Breast_Cancer_Network, Breast Cancer: Economic Impact and Labour Force Re-Entry., C.B.C. Network, Editor. 2007.
- Scott, L., Is Health Promotion Coming Back in Style? Occupational Health Nurses Journal, 2007. 26(1): p. 18-19.
- Ostbye, T., J.M. Dement, and K.M. Krause, Obesity and workers' compensation: results from the Duke Health and Safety Surveillance System. Arch Intern Med, 2007. 167(8): p. 766-73.