News

Wellness Programs as an Employee Retention Tool

Employees say they work harder, perform better and miss fewer days of work. Sidebar: ROI quantified.

January 20, 2010 | Stephen Miller, CEBS

Forty-five percent of Americans working at small to medium-sized companies say that they would stay at their jobs longer because of employer-sponsored wellness programs, according to the latest Principal Financial Well-Being Index.

The survey found that as a result of workplace wellness programs, 40 percent of workers say they are encouraged to work harder and perform better and 26 percent miss fewer days of work by participating in such programs. As in previous years, 51 percent of workers believe that wellness programs are very or somewhat successful in reducing health care costs.

The index, which surveys American workers at growing businesses with 10-1,000 employees, is released by Principal Financial Group, a benefits provider. These findings focusing on wellness attitudes and behaviors among American workers were taken from the fourth quarter 2009 Index.

“Wellness programs are clearly a win-win, especially at a time when employers and their employees are more budget conscious,” says Lee Dukes, president of Principal Wellness Co., a subsidiary of the Principal Financial Group. “Employers benefit by retaining top talent, energizing their employees and reducing the number of sick days. Employees benefit from improved physical health, reduced stress in the workplace and the financial benefits of a healthy lifestyle.”

While not all employers offer wellness programs, the survey found that nearly half (47 percent) of workers surveyed would participate or do participate in wellness programs to achieve better overall physical health. Other top reasons for participation include:

Reduced personal health care costs (30 percent).
Greater chance of living longer and healthier lives (30 percent).
Receiving employer incentives for participation (28 percent).
Reduced stress (28 percent).

Fitness Tops Workers’ Wish List

The survey found most workers are interested in wellness programs that improve their physical fitness, with 27 percent saying they would like in-office fitness facilities, 23 percent citing fitness center discounts and 19 percent expressing interest in weight management programs.

For some, these wishes came true, as significantly more workers (15 percent) had access to fitness facilities in fourth quarter 2009 compared to 11 percent in fourth quarter 2008.

Worries About Changing Health Plans Mount

As workers seek ways to improve their health, they are concerned about potential changes in their health insurance. Significantly more workers, 34 percent, expect their medical plan options to change in 2010 compared with only 23 percent in 2009, the survey found.

“While uncertainty over the future health care system mounts, more Americans are taking charge of their own health by focusing on preventive care and living a healthy lifestyle now to lead a longer, more quality life,” says Dukes.

This Principal Financial Well-Being Index survey was conducted Oct. 20-30, 2009, among 1,120 U.S. employees and 602 retirees.

ROI Quantified

Rigorously conducted case studies indicate a positive return on investment (ROI) from employer-sponsored wellness programs, according to a report in the February 2010 issue of the journal Health Affairs. In "Workplace Wellness Can Generate Savings," researchers at Harvard University conducted an analysis of the literature on costs and savings associated with wellness promotion policies. "The evidence suggests that large employers adopting wellness programs see substantial positive returns, even within the first few years of adoption," they found. "Medical costs fall about $3.27 for every dollar spent on wellness programs, and absentee day costs fall by about $2.73 for every dollar spent."

Among the findings: Citibank's health management program reported an estimated savings of $4.50 in medical expenditures per dollar spent on the program, and studies from the California Public Employee Retirement System (CalPERS), Bank of America, and Johnson & Johnson similarly estimated sizable health care savings from wellness efforts.

Aside from savings on health care costs, wellness programs were likely to result in lower replacement costs for absent workers and were an advantage in attracting workers to the firm, the researchers concluded. All of this, they wrote, "suggests that the wider adoption of such programs could prove beneficial for budgets as well as health."

Stephen Milleris an online editor/manager for SHRM.