Can Employee Wellness Programs Save Money?

Think employee wellness is just another buzzword? Think again. Studies show that 91% of workers who participate in similar initiatives are more satisfied and motivated to do their jobs. Which, as you can guess, leads to better performance, fewer sick days, and reduced healthcare costs. Which, again, means money for your business. How much exactly can employee wellness help you save up? Let’s discover the ROI on wellness programs!

What’s the ROI on wellness programs?

As more and more employees struggle with burnout and well-being issues, employers from all over the world are slowly waking up to the fact that unhealthy staff is literally ruining their business. According to WHO, “a staggering 12 billion working days – or 50 million years of work (!)  – will be lost to depression and anxiety disorders each year between now and 2030.” To prevent these massive losses and further downfall of both mental and physical health in the workplace, modern companies are increasingly eager to invest in employee wellness programs.

From initiatives like online yoga classes and corporate wellness challenges to therapist counseling or volunteering opportunities – there’s a lot to be done to improve the health and job satisfaction of the employees. And the evidence shows it simply pays off. A study by Rand Corp proved that the ROI on wellness programs is $1.50, which means that your company saves $1.50 for every dollar invested in the wellness system. Johnson & Johnson, on the other hand, reported an ever bigger ROI ranging from $1.88 to as much as $ 3.92.

Seems like a lot? Well, that’s just one part of the equation. As shown by the analysis by Harvard Business Review, employee wellness programs can have an overwhelmingly positive impact on the entire company’s culture – not just on the hard return. If successful, wellness initiatives can reduce workers’ risk of illnesses by 57%, which equals lower health care costs (moving 10% of employees from high- and medium-risk to low-risk status yields an ROI of 6 to 1), greater productivity, higher employee morale, boosted employee engagement, and lower turnover rate (which can drop by 10-15% within 5 years of implementing a wellness program).

Employee wellness vs. company costs

Still need convincing that an employee wellness program is a great idea to implement in your business? Here are some hard numbers to show you just how much you can save up on employee health:

• 38% of participants in a wellness program take fewer sick days.
• 62% of participants in a wellness plan said that it helped them lower health care costs.
• Companies with an effective wellness program that boosts the physical and mental health of employees generate 11% more revenue per staff member and 28% higher shareholder returns.
• Implementing company wellness programs boosts employee morale by 54%.
• 22% of employers claim that health and wellness programs helped them reduce absenteeism. 
• 89% of employees working in companies who support initiatives like wellness programs say they would recommend their workplace.
• Companies with worksite wellness programs offering employee engagement report almost 2x higher customer loyalty.

How to measure ROI for wellness programs?

From reducing health care costs to increasing employee satisfaction, wellness initiatives bring about many benefits for your business. But how do you actually measure them up? Calculating ROI for workplace wellness programs can be easy if you take into consideration the following factors:

1. Employee participation, e.g. how many employees (and how often) take part in your wellness initiatives.
2. Employee satisfaction, which you can measure by talking to your employees and taking surveys.
3. Absenteeism, e.g. the amount of sick or unpaid leave days your employees take.
4. Employee retention and turnover, which – as shown before – employee wellness programs help reduce.
5. Financial outcomes, such as health care savings or income generated by enhanced engagement and productivity.

You can also make use of ready tools like CDC Workplace Health Promotion calculators.

Wellness program ROI & VOI

A lot of what we’re writing here pertains to the very palpable benefits that corporate wellness programs can give. And while it’s true they generate a high return on investment (ROI), it’s also worth noting that some things can’t be limited to numbers. Job satisfaction? A team strengthened by bonding wellness activities? Healthy employees, who are eager to give their absolute best and create an amazing atmosphere?

Those are just as important as hard numbers (or maybe even more). That’s why, when assessing the performance of workplace wellness programs, it may be better to use the VOI (value on investment) metric. Sure, employee engagement is probably more difficult to estimate than – let’s say – medical costs savings, but with the right type of communication channels, a wide range of wellness offerings, and a regular evaluation of your company’s goals (not just financial), both ROI and VOI of employee wellness programs can stay in check. 

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Need help setting up an effective and money-saving wellness program? Check out Fitbout – an app for corporate wellness challenges and well-being activities that get your employers moving! Not sure how to start with employee wellness? Check out or guide here.

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