Wellness sees positive returns: Studies

Paybacks include cost reductions, increased innovation, engagement and productivity
By Shannon Klie
|Canadian HR Reporter|Last Updated: 04/19/2010

Lighthouse Publishing, a small publishing company in Bridgewater, N.S., found out a modest investment in health and wellness can yield significant returns if the program is properly aligned with employee needs.

In 2004, the regional health authority offered to assess employees’ health and wellness at the 46-person publishing company, including a survey of their health and the kinds of programs and activities they would be interested in.

Based on the survey results, Lighthouse created a health and wellness program with four themes: organizational health, obesity, fitness and smoking. Each theme had several programs and services including newsletters, weekly barbecues, a well-stocked “healthy fridge,” a “pounds for dollars” program, private fitness classes, on-site addictions counselling and free patches for smokers.

In total, the company invested $2,000 in the programs. Overall, employees lost 261 pounds, four of the eight smokers quit and the company ended up saving $6,000 on its health premiums — a three-fold return on investment.

“It’s really possible for an organization of any size, in any sector, in any part of the country, to invest in a health and wellness program that will have a positive return on investment for an organization,” said Karla Thorpe, associate director of compensation and industrial relations at the Conference Board of Canada, which recently released a study on health and wellness.

Organizations with a wellness program will see cost reductions around absenteeism and health-care expenses, as well as increases in productivity, said Thorpe. (See sidebar.)

Employers are starting to get this message, with 64 per cent of 255 organizations surveyed by the Conference Board agreeing their benefit programs focus on health promotion and disease prevention.

Also, 26 per cent of organizations say their comprehensive wellness strategy has been developed to a great or very great extent, while 46 per cent say it has been developed somewhat and 20 per cent say it has been developed to a small extent. Only nine per cent say it has not been developed at all, according to Beyond Benefits: Creating a Culture of Health and Wellness in Canadian Organizations.

Beyond benefit cost savings, making wellness central to business strategy also increases organizational effectiveness through increased innovation, engagement, productivity and decreased turnover, according to the Right Management study The Wellness Imperative: Creating More Effective Organizations.

Employees who rated their organizations as actively promoting health and well-being were 2.5 times more likely to rate their employer as a best performer, three times more likely to rate their employer as productive and 3.5 times more likely to report their employer encourages creativity and innovation compared to employees who said their employer does not actively promote wellness, found the study.

Employees who said their employers actively promote wellness were also eight times more likely to report being engaged and four times less likely to leave their organization in the next year, according to the survey of 28,810 employees in 15 countries, including Canada.

“Talent retention, creativity and innovation, employee engagement and productivity are all essential elements of organizational performance. The association of wellness with each of these elements provides clear and consistent grounds for approaching wellness as a key strategic imperative,” stated the report.

But unfortunately, only 49 per cent of employees said their organization actively promotes health and well-being. (Canada sits in third place with New Zealand at 56 per cent.)

“Most organizations don’t get how wellness can add value,” said Alistair Dornan, head of wellness and productivity manager at Right Management in London.

And wellness programs done in isolation, such as fresh fruit on Fridays or a smoking-cessation program, don’t add value in the long term if they’re not tied to the business strategy, he said.

“We really advocate that for organizations to get maximum value, they need to be very strategic in the alignment of the wellness programs with corporate objectives,” said Dornan.

Organizations need to expand the concept of wellness beyond issues of immediate physical and psychological health to include the economic capacity and capability of the individual, which includes engagement and other workplace factors, he said.

Only once that is done can an employer reap the full benefit of wellness programs on organizational effectiveness, said Dornan.

For organizations that haven’t developed a comprehensive wellness program, it’s important to first do a needs assessment, said the Conference Board’s Thorpe.

“What’s right for your organization in terms of specific health and wellness programs varies based on a lot of factors. It’s very important for employers to do a needs assessment and get what’s right for their specific organizations and what types of programs are going to be a good fit for their workplace culture as well,” she said.

“You don’t need to start out launching a full-scale health and wellness program in a variety of different areas. You can start with a small initiative, build some momentum and then keep building and improving your program.”

It’s also important to have a senior leader who champions the wellness program. And the employer should continually communicate with employees, so they know about the program offerings, and garner their feedback to ensure programs are still meeting their needs, said Thorpe.

Benefits of wellness

Health and wellness yields many business results

A strategic wellness program, with employee input and senior leadership buy-in, can yield many benefits for organizations, including:

• reduced absenteeism

• reduced distractions

• improved performance

• improved skills

• reduced workplace accidents and injuries

• reduced compensation claims

• reduced benefits costs

• improved retention rates

• improved employee engagement

• reduced turnover costs

• improved customer service and retention

• improved recruitment and competitiveness.

Source: 2008 Conference Board of Canada
Healthy People, Healthy Performance, Healthy Profits:
The Case for Business Action on the Socio-Economic Determinants of Health

4 steps to wellness

Developing an effective program

In the study Beyond Benefits: Creating a Culture of Health and Wellness in Canadian Organizations, the Conference Board of Canada lays out four key aspects to developing an effective wellness program:

Find a champion: Obtain senior leadership support.

Listen to employees: Survey employees, conduct focus groups and pay attention to workplace culture.

Start small: Focus on the fundamentals (basic HR policies) and a small number of programs before expanding.

Communicate effectively: Put some thought into how to reach workers and how you want them to perceive workplace health and wellness.

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