“Will our workplace wellness program be worth it?” is often a question that HR professionals grapple with. “Are these programs just a trend, or do they deliver a positive return on investment (ROI) for every dollar spent? Do they improve employee health, enhance productivity, or reduce turnover?”
The answer is yes, but there’s a catch: a wellness program’s success is only as strong as its execution.
When done well, wellness programs can offer impressive returns, as Johnson & Johnson illustrated. Since launching its wellness program in the 70’s, Johnson & Johnson’s health statistics have consistently outperformed national averages from the CDC. For instance, in 2016, only 9.2% of their employees had hypertension, compared to 30% nationwide.
In a study published in the Journal of Occupational and Environmental Health, the J&J wellness program resulted in health care savings of $224.66 per employee (per year) over a 4-year program period. “These benefits came from reduced inpatient use, fewer mental health visits, and fewer outpatient visits compared with the baseline period,” the researchers explained.
However, employee wellness programs aren’t plug-and-play solutions. Despite spending millions of dollars annually, many organizations do not get as much bang for their buck as J&J. We will discuss how they can turn the tide, but first, let’s look at some of the reasons your program isn’t paying off as you expected.
In this article:
- Why Certain Wellness Programs Miss the Mark
- Metrics That Matter for Workplace Wellness Programs
- 7 Tips for Maximizing Your Workplace Wellness Program ROI
Why Certain Wellness Programs Miss the Mark
52% of US employers offer employee wellness programs. However, for most of these programs, less than 50% of employees participate. If employees aren’t engaging, then the program’s potential is lost. There are several reasons why some wellness programs might struggle to rally up participation:
1. Misaligned Program Structure
Most wellness programs fail when they are not tailored to the specific needs of the workforce. Employee well-being is not a monolith. Everyone in your team has diverse physical, mental, emotional, social, and financial needs.
This means a generic program that doesn’t consider factors like employee demographics, job types, and personal preferences will struggle to gain participation. For example, a program focusing solely on physical fitness might miss the mark for a workforce struggling with mental health challenges.
2. It’s Difficult to Participate
A cumbersome employee wellness program—requiring too much time, too many steps, or inconvenient scheduling—is off-putting. An accessible and user-friendly program will boost employee engagement.
“Most people want to be healthy but their lives are too complicated,” notes Iwan Barankay, associate professor of management at Wharton School of Business. “When you are poor in America, have comorbidities, this is such a big cognitive burden that the idea of adding more routines is really, really difficult.”
3. Poor Communication
A lack of clear, consistent communication about the wellness program hinders its success. The same goes for complicated communication. If the program’s instructions are confusing, employees cannot engage with it.
According to a recent survey, 38% of employees want their employers to create a better line of communication between executives and themselves. They also desire more transparency in the company’s decision-making.
When it comes to corporate wellness, effective communication should highlight the benefits, how to participate, and why the program matters. It should also allow for employee feedback.
4. Lack of Compelling Incentives
Employers offering wellness incentives of $100+ report high (51%) participation rates. However, incentives alone will not solve low participation.
While they may stoke enthusiasm in the initial stages, incentives are simply extrinsic motivators with limited power in the long run. If you moderate your behavior because of a reward or fear of punishment, you’re likely to revert back to your old lifestyle when the reward is exhausted.
The real power lies in encouraging both intrinsic and extrinsic motivation. Simply put, incentives are more effective when employers shift their focus from merely encouraging participation to tapping into the employee’s holistic well-being.
5. Lack of Alignment with Company Culture
Company culture plays a crucial role in the uptake of any wellness initiative. If a wellness program feels like an add-on to placate them, employees will view it skeptically and be less inclined to participate. But if the company already has a culture of wellness, the program will feel like an integral part of the company’s ethos and more employees will embrace it.
Key takeaway: It takes more than good intentions to unlock a workplace wellness program’s full value. They require an investment of time, resources, and attention to detail.
The Metrics That Matter for Workplace Wellness Programs
Before we dive into the actionable tips, we must understand the key metrics (KPIs) used to measure ROI for wellness programs.
While reducing healthcare costs is important, this isn’t the be-all and end-all of a successful wellness program. In fact, several studies suggest most health and wellness programs have a negligible impact on direct health care costs over any period.
However, any wellness program ROI calculation is a multi-pronged activity that requires a blend of data analysis and human insight.
For a successful calculation, we need to go beyond numbers and look at the stories behind them. Here are some ways of capturing both qualitative and quantitative data:
1. Employee Health Outcomes
Measure changes in employee health status through biometric screenings and health risk assessments. Improvement in key health indicators like blood pressure, glucose, and cholesterol levels could be a positive sign that your program is succeeding.
2. Participation Rates
Track how many employees are actively participating in the program. High participation rates could mean a well-received program that leads to a more engaged and productive workforce.
3. Employee Productivity and Performance
Monitor changes in productivity and performance metrics. This can include fewer sick days, higher energy levels, stress reduction, and improved concentration, all of which contribute to better work outcomes.
4. Employee Engagement and Satisfaction
Use surveys to measure how the wellness program affects overall employee morale and job satisfaction. Engaged employees are often more productive and committed to the company.
5. Retention and Turnover Rates
Analyze staff turnover and employee retention rates before and after the implementation of the program. A decrease in turnover could mean the employees value the wellness initiatives, which can reduce the costs associated with hiring and training new staff.
6. Workplace Culture and Morale
Assess the impact on workplace culture and employee morale pre and post-wellness program implementation. A positive shift implies a successful program and can profoundly impact company performance.
7. Insurance Claims and Usage
Review changes in insurance claims and usage. While the impact on healthcare costs may be long-term, any significant changes can be a direct indicator of the program’s effectiveness.
8. Stress Levels and Mental Health
Evaluate the impact on employees’ mental health and stress levels. Improvements in these areas can result in a more resilient and adaptive workforce.
7 Tips for Maximizing Your Workplace Wellness Program ROI
1. Tailor the Program to Employee Needs
The success of any employee wellness program hinges on one factor: understanding each employee’s unique health goals and challenges. Kickstart your customization journey with purpose-driven surveys.
- What are the employee’s personal preferences?
- How do their wellness goals fit into their daily routines?
- What’s the employee’s emotional relationship with wellness like?
Complement with focus groups, where conversations can dive deeper to uncover nuances that surveys may miss. This way, employees can truly feel like active co-creators of their health journey within your organization. And when people engage, they commit—and that’s when you see the needle move.
2. Setting Clear and Achievable Goals
Clear and measurable goals are your coordinates toward maximizing your wellness program’s ROI. Adopt the SMART criteria — Specific, Measurable, Achievable, Relevant, and Time-bound — to frame your wellness objectives.
For example, don’t just say you want to improve mental health in the organization. Instead, say, “We want to reduce employee stress levels by 20% within a year.” For physical activity, “We want to increase participation in X wellness activities by 50% over six months.” SMART goals give you a framework for action and evaluation.
Ensure your employee wellness goals align with the company’s overall vision and values. This will magnify stakeholders’ sense of purpose and enhance buy-in. Most importantly, stay flexible and be prepared to recalibrate your goals as employee needs and the business landscape evolve.
3. Promote Leadership Involvement
They say the fish rots from the head; this is a reality in workplace wellness programs. The success or failure of the program has a lot to do with the leaders’ buy-in and participation. When executives roll up their sleeves and join the wellness bandwagon, they don’t just send a message — they become the message.
Consider a CEO who swaps her power suit for jogging attire during the company’s 5K. Or the manager who leads by example by taking a mental health day. Unlike leaders who just forward memos, the impact of their actions is more likely to trickle down the chain and permeate every fiber of the company.
This then cultivates a life-long culture where employee well-being isn’t an afterthought but a pillar. Even if the leaders eventually leave, the culture will be self-sustaining, guaranteeing a positive ROI as the wellness program evolves.
4. Leverage Technology for Engagement
Making technology an ally in your quest for maximum ROI is a no-brainer because 65.7% of the global population is connected to the internet.
Introduce employees to apps that not only track their steps and dietary habits but also provide personalized feedback and encouragement.
Introduce gamification in your wellness program. Consider integrating leaderboards, unlockable levels, and reward points into your wellness platform to ignite friendly competition. This way you’ll tap into the innate love for games that resides in all of us and thus turn individual challenges into collective triumphs.
We can also use tech to forge community on wellness apps and platforms. Encourage employees to share their milestones, cheer each other on, and even engage in group challenges. This sense of community will sustain engagement over the long haul, transforming solitary activities into shared experiences.
5. Offer Incentives and Rewards
Every effective wellness program taps into a simple truth: we all appreciate a pat on the back for our efforts. Incentives and rewards are the proverbial carrot. Even though wellness programs are about an employee’s behavior change, incentives are powerful catalysts for participation and engagement.
Begin by identifying what motivates your employees. Is it an extra day off, a gym subscription, or maybe a health insurance premium discount? Perhaps it’s something as simple as recognition at a company meeting. Whatever it is, tailor your rewards to suit these preferences, ensuring they’re both meaningful and desirable.
Inject a spirit of healthy competition by incorporating team-based challenges where groups can earn rewards. Don’t let a team’s victories go unnoticed. Celebrate them! Whether it’s through a feature in the company newsletter or a shout-out on the company’s social media channels, public acknowledgment goes a long way to amplify the sense of achievement.
Lastly, keep the incentives fresh and exciting. Regularly review and refresh the rewards program to align with changing interests and seasons. A dynamic rewards program keeps the novelty alive and prevents engagement from stagnating.
6. Communicate the Value and Success
Success stories from a wellness program are not mere footnotes—they are headline-worthy testimonials that can inspire an entire organization. Google knows that: the tech giant is deemed one of the best employers thanks to their comprehensive employee wellness program.
Their program doesn’t inspire just because of the numbers; the employees’ journeys, milestones, and transformations matter. Any employer can do that regardless of the company size.
Just create a platform for these stories to shine. It could be a dedicated space on your intranet, a regular feature in your company newsletter, or a spotlight during team meetings. Encourage employees to share their personal wellness victories, no matter how big or small. Did someone lower their cholesterol, run their first 10K, or simply start drinking more water daily?
Complement the anecdotes with data. Provide statistics on participation rates, health improvements, or reductions in sick leave. Use visuals where possible to depict the collective health improvements or a “before and after.” This data serves as concrete evidence of the program’s ROI, reinforcing the value to both participants and decision-makers.
7. Evaluate and Adjust Regularly
Continuous evaluation and adjustment are the lifeblood of an evolving wellness program. This requires several proactive steps:
- Building a feedback loop – Encourage honest feedback through regular wellness surveys, suggestion boxes, and open forums. Make it clear that every piece of feedback is a golden opportunity for growth, and ensure anonymity to promote candor.
- Using data to inform decisions – Regularly delve into participation metrics, health outcome measurements, and program cost-effectiveness. Look beyond the surface and analyze trends over time. Is the needle moving in the right direction? Are there unexpected benefits or challenges cropping up?
- Embracing agility and flexibility – Use the insights from data and feedback to make informed adjustments. This may mean introducing new activities, tweaking existing ones, or phasing out elements that no longer serve your goals.
- Involving your team – Ensure every adjustment is a collaborative effort. Involve employees in the refinement process, making them active participants in the program’s future.
Final Thoughts
Ensuring the success of a wellness program is not easy. There are many pitfalls that can reduce wellness program ROI and effectiveness, including misalignment, poor communication, cumbersome administration, and lack of additional incentives.
The specific goals and objectives of a workplace wellness program will be different depending on the culture, needs, and workforce of a company. By developing a well-thought-out program – backed by management and based on what employees want – will lead to greater wellness program ROI and make the workplace healthier, more involved, and more productive. And by creating a company culture that puts health and happiness first, you’re investing in your employees and also in the future of your business.
