Does an Employee Wellness Program Contribute to Your Company’s Financial Health?
Employee Wellness programs are a popular addition to any company’s HR offerings. Think of an employee wellness program as a broad definition for anything the company does or provides that promotes employee health and well-being.
From fitness programs and nutrition coaching all the way to smoking cessation programs and more, workplace wellness programs are generally put in place to help curb the massive numbers of lifestyle-related diseases we are seeing rising not only in the US but also around the world.
Companies like to point to these programs as additional benefits when it comes to attracting new talent, but employee wellness programs sometimes slide into ‘abstract’ territory – meaning it becomes difficult to show real returns beyond employee health, wellness, and happiness.
What does employee wellness mean for you, as the leader of an organization? How does it translate to benefits for your company – be that better rapport, more recognition, or financial gains?
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Employee Wellness on the Rise in the US
Over 80% of US enterprises have already implemented employee wellness programs while the other 20% are planning to do so in the near future. So, there must be some concrete returns in order to warrant these sorts of statistics, right?
Employee wellness programs might seem more symbolic than anything but recent data is proving otherwise. We now know for sure that such programs are undoubtedly beneficial for a company’s workforce in ways that pass those benefits back to the employer.
By this, we mean that evidence suggests that a well-rounded employee health program boosts employee engagement, productivity, retention, job satisfaction, company loyalty, and of course, health.
But the bottom line here, literally and figuratively, is the company’s financial health. Financial success is the goal both employers and employees pursue. So, does a corporate wellness program truly contribute to your company’s financial health? Let’s dive into the details.
The Financial Benefit of Employee Wellness Programs
Though employee wellness programs have long been viewed as a fun perk to attract and hold onto new talent, they haven’t always held such sway as a strategic way to save money. This is about to change thanks to a slew of studies and reviews that have since demonstrated the monetary savings that a great corporate health program can provide.
Decreased Healthcare Costs
The first benefit you’ll notice with a solid employee health program in place is the reduction in health care costs. An aging workforce combined with this past year’s sudden increase in work-from-home employees is contributing to ever-increasing health care costs.
A recent Harvard Research study that reviewed 22 different studies relating to healthcare costs and wellness programs demonstrated that the average ROI for a comprehensive employee wellness program was $3.27; meaning that for every dollar spent on the program, the company saved $3.27 directly from reduced healthcare costs.
Absenteeism, when an employee is frequently and habitually not present at work, and the connection between employee health cannot be disregarded. Employees who are in good health and practice positive health behaviors, and those who manage their stress levels and weight, as well as those who have healthy blood pressure, cholesterol, and glucose levels all have lower rates of absenteeism.
In short, these are the exact behaviors and health outcomes that a comprehensive employee health program aims to accomplish. What this means is that any employee wellness program that is successful in reducing the amount of absenteeism will see cost savings as a result.
The same Harvard study referenced above looked at the return of investment of wellness programs as they relate absenteeism and revealed that for every spent they can save $2.73 directly related to absenteeism.
Decrease Presenteeism and Increase Productivity
Presenteeism is just as costly a problem as absenteeism can be in the workplace. Presenteeism is low productivity from an employee who is physically present at work but not working. Presenteeism, like absenteeism, is associated with negative health behaviors and poor health. The cost of presenteeism due to poor employee health is currently estimated to be at least two to three times greater than direct health care expenses
The good news is that, according to a study published in the Journal of Occupational and Environmental Medicine, good health behaviors that are established with a corporate health program can have positive impacts on employee productivity, saving their companies about $353 each year!
Corporate Health Plans: Tax Benefits
Finally, the tax incentives and grants available for employee wellness programs cannot be overlooked. There are potential tax deductions for various fitness and health initiatives like in-office gyms and smoking cessation programs.
Workplace wellness grants are also available, both public and private, for companies who develop workplace wellness programs open to all employees that emphasize health awareness, education, prevention, screenings, and health-risk assessments.
Check with your accountant for potential tax incentives for your business!
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