By Claudine Kapel
Many organizations concur – at least in principle – that employee wellness matters. There’s an inherent logic to the premise that healthy, productive employees give rise to a healthy, productive business.
But that doesn’t mean organizations are rushing to jump on the wellness bandwagon. In the face of competing priorities for time and dollars, some remain skeptical about whether a focus on wellness can actually deliver a meaningful return.
Two recent studies suggest investments in wellness programs can deliver value – but the research findings also indicate organizations are still grappling with how to quantify this value.
One study, by the Principal Financial Group, found 62 per cent of workers believe workplace wellness activities are very or somewhat successful in improving health and reducing health risks. The survey covered 1,103 employees in the United States at small and mid-sized businesses.
In addition, the study found wellness programs may also support organizational performance in other ways.
- Just over one-half the respondents (51 per cent) agreed or somewhat agreed wellness benefits encourage them to work harder and perform better.
- Some 45 per cent of respondents agreed or somewhat agreed having an employer-sponsored wellness program would encourage them to stay working for their current employer.
- More than four in 10 (43 per cent) who use at least one wellness program a year agreed or somewhat agreed they had missed fewer days of work as a result of participating in a wellness program.
Meanwhile, a survey by the Society for Human Resource Management (SHRM) also indicates employers are reasonably positive about the impact of their wellness programs. More than two-thirds (68 per cent) of organizations offering such programs indicated the programs were “very effective” or “somewhat effective” in reducing the costs of health care. The SHRM research covered 447 human resource professionals from SHRM’s membership base.
Further, the majority (86 per cent) of organizations offering wellness programs rated their initiatives as being “very effective” or “somewhat effective” in improving the physical health of employees.
The survey also found employers are warming to the idea of employee wellness, with 43 per cent reporting an increased level of investment in wellness initiatives in 2012, versus 2011, while only three per cent reported a decline.
Part of the challenge organizations face in selling wellness initiatives internally is the limited ability to quantify the benefits of such programs. In fact, only 23 per cent of the SHRM survey participants conduct analysis to determine the return on investment for wellness initiatives. Yet, at the same time, 90 per cent of respondents indicated the organization would increase its investment in employee wellness initiatives if it could better quantify the impact.
Given the challenges facing organizations today – including rising health care costs, an aging workforce, competition for key talent, and ongoing pressure to increase corporate performance and productivity – it is not surprising employee wellness is cropping up more and more on business agendas.
To build the business case for such programs, however, organizations need to focus more on what they want such programs to deliver – and how they’ll measure success.
It may be easier to show the impact of wellness programs if the organization establishes and monitors a scorecard covering the key areas of desired impact – for example, reducing health care costs and absenteeism, and enhancing employee retention and commitment. As part of the exercise, the organization will also need to define what data points it will track to measure results.
Ultimately, the process of quantifying results is essential. For it is only when wellness programs yield measurable value that they will be able to graduate from fluffy ideal to a true lever of business performance.
Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com.