The old saying ‘prevention is better than cure’, stands true in many circumstances. On the same lines, Benjamin Franklin had also said, “An ounce of prevention is worth a pound of cure.”
These sayings absolutely stand up for business costs and employee wellbeing expenses. And so, it makes sense to prevent employee health and wellbeing issues at their grassroots levels rather than spending more on complicated health issues.
The key objectives of a well-designed employee wellness program are –
- Cultivate healthy lifestyle habits
- Improve health and wellbeing
- Reduce healthcare costs
- Boost employee engagement
- Increase workforce morale
- Build a healthy workplace culture
Many studies show that the costs of not having a well-designed employee wellness program are higher than the actual cost of implementing the wellbeing program.
The Costs of Workplace Wellness Programs
Simply put, the cost of your workplace wellness program depends on what your company is willing to offer to your workforce. Many surveys report that on average, companies spend around $150 – $2,000 per employee annually towards workplace wellness programs. Other productivity experts recommend spending $300-$400 per employee towards their health and wellbeing to regain a higher ROI. This amount makes up to just around $25 per month, which is pretty manageable by most companies if planned well.
Although many employers may still find this a huge addition to their normal business expenditure, employers who understand the value of the wellbeing programs are ready to spend up to $742 per employee towards incentives to boost employee engagement. And they are ready to invest that amount readily because of the better ROI that these programs can bring in. On the other hand, employers who disregarded employee wellness programs saw an extensive rise in their organizational costs driven primarily by healthcare expenses.
Costs of Disregarding Health and Wellbeing Programs
Previously, Workplace Options conducted a global study evaluating the global trends and the impact of Employee Assistance Programs (EAP). The outcomes of this 3-year old study showed that poor health and wellbeing resulted in –
- 74% higher anxiety
- 58% increase in depression
- 28% rise in stress
How damaging can this be to organizations?
According to a WHO report, anxiety and depression cost global employers almost $1 trillion as lost productivity.
Compared to 8.7% in 2019, 2021 recorded almost 39.5% of US employees suffering from depression or anxiety symptoms. A Total Brain Mental Health Survey reported a 14% rise in stress in June 2020 and overall anxiety issues rose to 41%. A study by the University of Phoenix showed about 55% of the US workforce has experienced employee burnout during the pandemic.
In 2016 itself, reports estimated a loss of $153 billion for US employers due to employee mental health issues. These numbers would have well increased by 2021. Another survey report revealed that following healthy lifestyle habits can save almost $730 billion in employer-sponsored healthcare costs.
To add to these woes, a study predicts a 5.3% increase in healthcare costs in 2021.
Irrespective of any of the metrics, it is apparent that ignoring employee health and wellbeing can lead to shrinking business revenue.
Why Promoting Employee Wellbeing Can Help Businesses?
There is enough evidence across the web proving the positive impact of employee health and wellness programs. A Harvard study reported that well-executed employee wellbeing programs gave an ROI of $3 each in healthcare savings and reduced absenteeism costs for every dollar invested in it. Another RAND study showed that when disease management and lifestyle management programs were implemented together, the average employer-sponsored healthcare costs were reduced by almost $30 per employee per month.
Other studies show that for companies that implemented corporate wellness programs, the healthcare costs were reduced by $3.27 and absenteeism-related costs drop by almost $2.73, reflecting a 6-fold higher ROI. Also, businesses that invested in employee health and wellbeing showed a 325% increase in their market prices.
As much as it mattered in the 1700s, company costs matter even today. Addressing employee mental health and other disorders can cost the companies a lot down the lane. The loss can be in terms of higher healthcare costs or lost productivity.
Employee wellness programs and other wellbeing initiatives do not have to be expensive. Understanding employee health and wellbeing needs, choosing the right vendor, and executing the program the right way can make it smooth, organized, and affordable. And when your workforce knows about the efforts put in by the organizations for their health and wellbeing, they are bound to bring in a bigger ROI.