Not a Member? Get access to HR news and resources that you can trust.
Don't leave the task of calculating total cost of workforce to the finance department.
Is your employee handbook ready for the changing world of work? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
60+ new SHRM Seminar dates in 10 U.S. cities and virtually.
Expand your influence and learn how to become an effective leader -- Join us in Phoenix, AZ, October 2-4, 2017.
Designing and managing an employee wellness programs is an important step in improving the health and productivity of employees and potentially improving the overall cost of employer-provided health care. Wellness programs can benefit employers by:
Numerous studies have indicated health care costs can be contained or even reduced by implementing wellness programs. A 2011 study published by the American Journal of Health Promotion demonstrated that health care costs rose at a 15 percent slower rate among wellness program participants when employers consistently offered a wellness program to their employees.
Because of the ever-increasing costs of health insurance and the importance of employee health, employers should consider implementing a well-thought-out wellness program that helps both employee health and the employer’s bottom line.
Obtaining information about the health of the workforce is a critical step in developing a workforce wellness program. This information will enable the employer to design programs and services that are most beneficial to both the employer and the employee. For example, employers that have a high percentage of employee population with cardiovascular disease may target programs and services that assist employees in reducing this particular health risk. Below are several tools for obtaining such data.
Support from management is essential to building a successful wellness program. As with any initiative, management buy-in is critical for financial funding purposes, for obtaining support throughout the organization and for approving policies and processes related to the program. Management can provide additional assistance by helping to link the health promotion objectives to business outcomes, thereby positioning wellness as a fundamental part of the organization.
The challenge in obtaining management support is communicating the potential value of a wellness program to the organization’s bottom line. The American Journal of Health Promotion and the linked articles below are resources that can assist with developing a business case for establishing a wellness program. Focus especially on the resources that highlight health outcomes and cost effectiveness.
The CDC provides free cost calculators, which can assist employers in estimating the costs of lifestyle factors and preventable diseases for employees. Employers can use the cost estimates to quantify wellness programs.
Addressing the three questions below may help in obtaining the required support from senior management:
After conducting a needs assessment and obtaining management support, create an internal employee-driven committee that helps build and sustain a wellness culture in the organization. This committee will help build organizational support and effectiveness for the wellness program. The responsibilities of the wellness committee might include the following:
Solicit committee members by invitation or ask for volunteers, ensuring there is cross-sectional representation, such as members from the top management, HR department, information technology, communications/marketing, health and safety department, union representatives, and employees interested in health and wellness.
Additional considerations for the wellness committee include the following:
The committee guide provided by the North Carolina Department of Public Health is an excellent resource to assist in committee processes.
Using the information gathered from the workforce assessment, establish goals and objectives for the program. For many organizations, a key goal is to improve workers’ health and thereby reduce health care costs. Other goals may include reducing absenteeism, boosting worker productivity and increasing retention. Wellness program goals and objectives are statements of broad, long-term accomplishments expected from the program. Each goal has one or more objectives to ensure that the goal will be successfully accomplished. Objectives should be clear, time-limited and stated in such a way that it is easy to determine whether they have been achieved. Below are a few examples of goals and objectives:
Establishing a budget is a critical step in creating the wellness program. Without funding, the program will stall. According to a survey by Fidelity Investments, employers are spending nearly 2 percent of their total health care claim dollars annually on wellness programs. The 2 percent figure was calculated by dividing the amount of money an employer spends on health improvement programs per employee by the total amount of money it spends for claims for doctors’ office visits, medications and hospital stays per employee per year. The figure excludes costs associated with employee incentives, on-site health centers and HR staff dedicated to wellness programs.
When creating a wellness budget, be sure to include the cost of incentives, marketing and program design in the budget. See, Worksite Wellness Sample Budget.
Consider taking the following steps to look for hidden funding resources:
Incentives or rewards are an effective tool to change unhealthy behaviors or adhere to healthy behaviors, to increase participation rates, or to help individuals complete a program. The argument for rewarding employees for participating in a wellness program pulls from the basic principles of behavioral psychology: People are driven to act by the positive consequences they expect from their actions. Building a rewards system into your wellness program is a great motivator. Rewards can take many forms, including points that can be exchanged for goods, gifts celebrating accomplishments or monetary awards. Over time, the motivation for rewards shifts from an external incentive to intrinsic reinforcement. While at the outset employees exercise or schedule their annual physicals to earn points or gifts, they eventually begin to experience fewer colds, weight loss, more energy and peace of mind. Effective incentives must be commensurate with the effort required to practice the desired behavior. For example, incentives attached to quitting smoking or losing weight should be greater than incentives for participating in a lunch-and-learn seminar on weight loss. Linked below are general resources regarding incentives and wellness programs.
There are numerous legal issues and compliance requirements related to wellness programs. Federal laws that apply to the design and management of wellness programs include the Americans with Disabilities Act (ADA), Genetic Information Nondiscrimination Act (GINA), Health Insurance Portability and Accountability Act (HIPAA) and Patient Protection and Affordable Care Act (PPACA). For a summary of the impact of these employment laws on wellness program design and incentives, see SHRM toolkit “Designing and Managing a Wellness Program,”.
Employers have great latitude in designing the wellness program. There is not a standard program, as it will vary based on organizational needs and resources. The wellness program may range from a very simple program to an elaborate multi-prong program. It is important to include a variety of components that target risk behaviors and the needs and interests of the employees. Use the resources obtained in previous steps of organizational assessment, wellness committee data gathering and budgetary constraints, as well as the goals and objectives, to determine the types of wellness programs to include in the design. The company’s level of desired involvement is a key consideration in determining the types of programs to include in the wellness program. Examples of common programs are as follows:
Now it is time to write and communicate the organization’s wellness policy. This policy statement should include the organization’s intent, level of involvement, and rewards and incentives system with respect to employee wellness. In communicating the reward system to employees, presenting a John Doe example may help them see the program in real-life terms.
Communication is important to marketing the program and ensuring participation. It is helpful to use communication to create a social culture where being healthy is valued. This can be done in many ways, using well-established techniques of marketing and changing behavior, such as the following:
Ongoing communication and marketing are important for maintaining engagement in the wellness program.
As with any investment or project, evaluating the effectiveness of the wellness program is important in sustaining management and employee support and revising or implementing new programs. Employers should have established metrics and baselines at the rollout of any wellness initiative. The metrics or baselines will vary depending on the programs implemented. For example, employers may measure participation rates, program completion rates, reduction in health care costs and percentage of employees who quit smoking or lost weight. The CDC offers a Framework for Program Evaluation and other evaluation resources. Employers may also want to measure the return on investment (ROI). The SHRM article “Finding Wellness’s Return on Investment” provides guidance on calculating the ROI. Several organizations are developing new tools to assist employers in measuring the ROI on wellness. Regardless of the tools used, evaluating the effectiveness of the wellness program is an important step in the overall management of the program.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 3,200 companies