The Business Case for Employee Wellness Programs

March 21, 2018 in Wellness
By Daniel Ohmott

Across the month of March FMP’s blog posts have focused on employee wellness programs. Our first post (How Fit is Your Company’s Wellness Program?) provided a general overview of employee wellness programs, discussed what makes a successful wellness program, and provided an overview of FMP’s wellness program. Our next post (Trends in Wellness Programs) explored current trends in the area of employee wellness and provided helpful tips for enhancing—or reinvigorating—your organization’s wellness program.

Hopefully, the previous posts peaked your interest in starting an employee wellness program at your organization. However, the difficult part in taking action could be in gaining leadership buy-in and program funding. Though many organizations, large and small, have already made the commitment to an employee wellness program, the business case for doing so is growing stronger as more research is focused on these programs. Below, we have identified four benefits associated with employee wellness programs, complete with relevant data, to help you form a compelling business case that sounds like music to the ears of senior leadership.

Reasons Your Organization Should Start a Wellness Program

Positive Return on Investment (ROI): Companies that invest in their employees through an employee wellness program stand to benefit in a variety of ways, including a direct return on their investment. Studies have shown varying amounts of ROI; however, a literature review conducted by the American Journal of Health Promotion reported an overall ROI of $2.38 (i.e., organizations saw a benefit of $2.38 per every $1.00 invested) for employee wellness programs.[1] While specific ROI varies from organization to organization, most organizations with a well-run employee wellness program can expect to see a positive return from their investment.
Increased Productivity: In many organizations with longstanding employee wellness programs, organization leaders have begun to quantify measures that were previously unassociated with employee wellness programs, such as productivity. [2] In addition to seeing returns in traditional ROI measures (i.e., reduced spending on healthcare), the study cites that reduced absenteeism, attracting and retaining talent, and positive employee perspectives of their employer, are all reported outcomes of robust wellness corporate programs. These positive, bottom-line impacting results demonstrate that employee wellness programs have moved beyond programs designed to only moderate direct healthcare costs.
Increased Employee Engagement: Chances are an unengaged employee is negatively impacting your organization, at least according to a 2016 McKinsey report[3] in which only 3 out of every 10 employees feel engaged by their job. To help combat this issue and drive employee engagement, organizations have been developing more robust employee wellness programs, which have the ability to increase employee engagement. In a survey conducted by Optum and the National Business Group on Health, employees who had access to an employee wellness program reported higher levels of engagement. Moreover, employees who frequently participated in employee wellness programs demonstrated even higher levels of engagement, employer loyalty, and job performance. [4]
Greater Ability to Attract and Retain Top Talent: As the marketplace for top talent continues to grow increasingly competitive, many organizations have recognized the importance of their employee wellness program in retaining their current employees and in attracting new employees. Similar to ROI, a variety of factors can impact an organization’s retention rate, though one organization, NextJump, decreased their employee turnover rate from 40% to the low single digits in part through their employee wellness program![5] A broader study conducted by Towers Watson and the National Business Group on Health found that organizations with well-run employee wellness programs saw a decrease of approximately 6% more in their attrition rates compared to organizations with low effectiveness programs.[6]

For companies of all sizes, a modern employee wellness program can benefit both your employees and your organization. Though employee wellness programs have been around for some time, the modern wellness program has evolved from a focus on minimizing healthcare costs to a more holistic approach with a wider range of positive outcomes, including increased employee productivity, a more engaged workforce, and a greater ability to attract and retain top talent. These are the factors that directly impact an organization’s bottom-line and create a compelling business case for senior leadership that’s hard to ignore.

If you’re interested in learning more about FMP’s capabilities and services in this area, please contact BD@fmpconsulting.com.

About the Author: Since joining FMP in 2011, Dan has provided analytic and strategic consulting services to private and public-sector organizations across multiple disciplines. When not at FMP, you can find Dan exploring his new neighborhood – Capitol Hill – with his dog (Lulu)

Photo of author and FMP employee Dan Ohmott