Many employers are concerned about the increasing cost of healthcare and other wellness programs, and how that impacts employee wellbeing and retention in the long run. While those concerns aren’t unfounded, employers are also starting to take note of the many benefits these programs can have on their business. If this consideration isn’t in your business’ overall strategy, then it should be. In this article, we take a look at why that is.  

Not Cheap but Worth It 

Companies are currently spending anywhere between 15% and 30% of their payroll on healthcare and wellness plans for their employees. For this reason, business leaders are constantly looking for ways to reduce costs in this area. Employers often try alternative solutions like reducing their number of employees, selecting a less expensive benefit plan, or shifting a portion of the costs to the employee – none of which have had significant impacts that didn’t also financially affect their employees.  

Benefits Outweigh the Costs 

Those who control the purse strings are starting to understand that there are financial benefits to enrolling in health and wellness plans. While the upfront cost of these programs can widely vary (anywhere from under $100 to over $2000 per employee), and can often feel like a substantial expense, when taking into account the return on investment to the company, the benefits come back three-fold.  

Offering a health and wellness program can reward you with significant tax reductions per participating employee each year. These savings can then be fed back into the business’ working capital. In addition, data has shown reductions of claim costs averaging $1,400 over a three-year period. While there are clear upfront savings to be had, there are other indirect benefits that also contribute to the ROI for the employer. 

Promoting Preventative Measures 

By providing easy access to a health and wellness program, companies are promoting a healthy lifestyle shift to their employees. When taking part in these programs, employees are able to take notice of and address any emerging health issues before they become more severe. This indirectly benefits the bottom line by reducing the number of health claims. In fact, United Healthcare states that 49% of healthcare costs can be addressed by the participation in wellness programs. They say, “When employees are healthier, they may have fewer claims, lower their health risks and slow or even reverse the progression of costly chronic conditions.” 

Improved Employee Retention 

One of the ways in which employers have been trying to lighten the burden of healthcare costs is by placing some of the financial responsibility on the employee by having them cover a portion of the cost. That has been a serious con for both current and incoming employees, and studies have shown that it is a significant roadblock to recruiting and maintaining good talent. In a study by MetLife, 60% of employees agreed with the statement, “The employee benefits offered to me are an important reason why I remain with my employer,” and 40% agreed with the statement, “The employee benefits offered to me were an important reason why I came to work for this employer.” When adopting a health and wellness program, companies are indirectly helping reduce their bottom line by retaining their workforce as the usual hiring and training expenses of regular employee turnover are reduced.  

Loyalty, Productivity and Mental Health 

United Healthcare found that nearly 90% of employees who work in a company that is focused on health report being happier. Employees find major value in knowing that their employer cares about their health and wellbeing. With that in mind, they are inherently more likely to stay loyal to their employer. In addition, productivity has been shown to significantly improve. Employees who partake in a health and wellness plan are more likely to feel happy and fulfilled in their personal lives, which inevitably transfers into a positive attitude at work and therefore creates higher levels of productivity. In contrast, a global survey by McKinsey Health Institute found that employees experiencing at least one mental health challenge (nearly three in five) report worse employee experience metrics and are four times more likely to want to leave their organization. 

In Conclusion… 

It is true that implementing a health and wellness program for your organization can be costly, but when looking at the number of benefits there are to be had by both employee and employer, you’re sure to come out on top. Besides the upfront financial benefits, the true ROI comes from ensuring that your employees are happy, healthy and satisfied – you should then see the indirect benefits of your health and wellness programs come to fruition too.