Study finds CHROs skeptical about cost benefit of wellness programs
By Brian Kreissl
Many senior HR practitioners and business leaders are beginning to question the value of employee wellness initiatives from a pure cost-benefit perspective — particularly with respect to health-care costs.
Perhaps somewhat surprisingly, the Consero 2014 Chief HR Officer Data Survey found that 48 per cent of respondents believe their corporate wellness program is ineffective. The survey of 42 CHROs at Fortune 1000 companies also found only 22 per cent of respondents believe they are able to achieve significant costs savings through corporate wellness initiatives.
Such results are interesting and important because they highlight the fact that wellness programs don’t necessarily result in quantifiable cost savings. If the primary goal is cost savings, health-care dollars may be better spent elsewhere or at least targeted towards the wellness initiatives with the most “bang for their buck.”
Nevertheless, I believe such analyses miss the point in some respects. Wellness programs aren’t solely about reducing health-care spend in organizations — they have other important tangible and intangible benefits.
Wellness in a Canadian context
This is particularly significant in a Canadian context because of our publicly funded health-care system. Health insurance in Canada generally doesn’t need to cover as much as it does south of the border because primary health care is covered by provincial health plans.
Therefore, a wellness program in Canada likely won’t save a Canadian employer as much in health-care costs as it would in the United States. Because of that, one might argue wellness programs are even less effective here in Canada.
But while the actual cost of medical bills isn’t generally paid by an employee’s health benefits, the program could ultimately end up paying for prescription drugs and other costs not covered by provincial health plans such as physiotherapy and semi-private hospital rooms. Although it is difficult to quantify the benefit of employee wellness initiatives purely in terms of health-care benefits savings, there are other benefits that accrue to employers.
Employer branding, employee engagement and productivity
First of all, wellness programs can be particularly effective from an employer branding perspective. It is no accident that many of the most sought after employers have a strong commitment to employee wellness, including perks such as on-site gyms, subsidized cafeterias with healthy eating options, massage days, ergonomically designed workstations, company sports teams and exercise classes.
Picture an ideal office space and chances are many of the things that make it so special relate somehow to employee wellness. Companies such as Google and SAS Institute come to mind. While few companies can match the resources of those employers, smaller companies can still have a meaningful commitment to wellness through initiatives such as subsidized gym memberships, flu shots, smoking-cessation programs and flexible work arrangements.
In addition to the fact that employers of choice are better able to attract, retain and engage employees through effective employer branding, there is no accident that a pleasant, safe and healthy work environment can actually make employees want to stay in the office longer. For example, if employees don’t have to leave the premises to go to the gym, they could conceivably incorporate a quick workout into their workday and return to the office afterwards. Similarly, employees are less likely to leave the office for lunch if they have access to high-quality, inexpensive healthy eating options onsite.
A meaningful commitment to employee wellness can also help employers reduce absenteeism, decrease spending on short- and long-term disability programs and improve productivity by making employees less stressed and better able to focus on their work.
Corporate social responsibility
Wellness programs can also be viewed positively through the paradigm of corporate social responsibility. One could argue that companies have legal, moral and ethical obligations concerning the health, safety and wellness of the workforce.
In many respects, having employee wellness programs is simply the right thing to do. Making such a commitment helps to further an organization’s corporate social responsibility agenda. Employees are important stakeholders in any organization, and being recognized for having a meaningful commitment to corporate social responsibility will help to enhance and improve the company’s branding in both the product and employment markets.
