The ROI of an employee wellness program

More smiles. Fewer sick days. More joy. Less stress. Healthier employees. Increased morale. Stronger company loyalty.

We could go on forever, listing the benefits of an employee wellness program. And every single item on that list makes us feel warm and fuzzy inside.

But you’re a numbers person. You need to justify a program composed of healthy eating seminars and walking meetings. And it takes a whole lot more than warm fuzzies to make that happen.

So, numbers people, this one’s for you. We present, the ROI of employee health and well-being.

Over the past 10 years, a number of companies and organizations have dug into the financial impact of employee wellness programs. From RAND to Harvard to Gallup, we’ve got a decade’s worth of data about health care costs, productivity, engagement, and retention. For all of the detailed specifics, dig into those studies and articles linked above. For a quick summary, here’s what we found most pertinent.

Employees who are well cost less

Obvious? A little. But a 2012 Gallup study made it very specific, finding that employees who rated their overall well-being as “high” had 41% lower health-related costs when compared to employees who were struggling with their health. Employee wellness offerings that encourage regular exercise and healthy eating or ones that make time for health management can move more employees into that high well-being group.

How much less?

A well-known RAND study went even farther to quantify just how much an employee wellness program can save. It examined 10 years of data from a Fortune 100 company and found that an employee wellness program reduced that company’s average health care costs by about $30 per program member, per month. We’ll do that math for you—that’s $360 per employee each year. How many employees do you have?

Employees who are taken care of work more

Whether they take a sick day to visit the doctor or not, unwell people are less productive. When health takes priority, the time, energy, and attention they can give to their work decreases. And even when they aren’t sick, employees who don’t feel their company cares about them or their well-being don’t tend to stay very long. This leaves you covering sick days, adding team members to increase output, or investing time to hire and onboard new staff.

Lost productivity is costly

Covering a team member’s sick day or hiring a new employee to backfill a position doesn’t seem like a big investment. But all of these hits to your productivity add up. A 2009 study identified lost productivity costs to be 2.3 times higher than medical and pharmacy costs.

In today’s world of almost guaranteed rising health care costs, it’s tempting to look at cutting insurance as a way to keep things balanced. The idea of spending even more to keep employees healthy can seem like a non-starter. But as these studies prove, employee wellness programs create a significant ROI and competitive advantage. And, of course, lots of warm fuzzies too.