The Financial Benefit of Health & Wellness Programs

I read an article on, Healthy Returns from Wellness Programs, that  inspired me.  As someone who considers myself an athlete and who is a definite health advocate, I must have been subconsciously drawn to companies with strong health and wellness programs. I never considered this before. I have always known I was drawn to entrepreneurial companies (before I began my own entrepreneurial pursuits). There is something to be said for empowering one’s employees to make decisions and take some risks, which is what entrepreneurial corporations do. I think encouraging them to empower their health is of the same ilk. Hmm. I have worked at three major corporations that have or had on-site gyms and health and wellness programs – Honda, Enron, Siebel.  Because of my early exposure and the subsequent comparisons I’ve made to companies that did not have on-site gyms or related programs, I’ve been a big believer in such programs as a means of keeping employee health expenses at a minimum.

I liked the article because it interviewed smaller companies that quantified the impact on the bottom line. Not only do health and wellness programs provide a bevy of esoteric results like happier employees, more engaged participation, higher employee morale. Wellness programs provide quantifiable results including:  lower employee turnover (measured by the cost of recruiting and training a new employee); lower employee absentee rates (measured by the cost of a day’s work for the sick employee); and lower insurance costs (measured by comparing your company’s insurance costs to the average for similar companies or IF your wellness program is new, measured by comparing your current insurance costs to that before the wellness program was successfully implemented).

The small and medium-sized companies interviewed in this article measured and quantified the positive impact on their respective bottom line. Here’s an excerpt from’s article, Healthy Returns from Wellness Programs by Alix Stuart I particularly liked:

The sweating and the checkups pay off: indeed, Hunziger can quantify the benefits. Lincoln’s wellness program saves the company some $2 million a year, he estimates, with about half of that coming from lower-than-average health-insurance costs. (Lincoln is consistently about $3,000 below the national per-employee average.) A big part of the balance comes from the reductions in workers’ comp insurance rates that have occurred as the program has taken off over the past seven years, and from an estimated $4,000 savings per year per employee who quits smoking. Below-average absenteeism and turnover also contribute to the savings.

All told, Lincoln reaps “a 5-to-1 ROI” on its wellness program, says Hunziger. That includes the costs of employing a wellness staff, various incentives, and activities like the mountain climb with the CEO, which is a reward for employees who achieve a certain level of fitness.

What additional support do you need to implement your own health and wellness program? To get started, you don’t have to cash in all your chips and throw a bunch of money at the problem. Many local (and national) gyms and workout facilities offer volume discounts to employees of companies who sign with them. Why? Companies that offer discount memberships to their employees save the gyms a significant amount of marketing funds. Some progressive facilities even offer wellness programs to their member company’s employees. And you can offer financial or visibility incentives to quit smoking or start exercising. You can send your employees to health and wellness fairs put on by some other entity in the community.

One caveat: As the owner or CEO, you must be committed to implementing a health and wellness program. If you start in fits and dribbles, no one will take you seriously. Small and medium-sized companies very much take their cues from the ownership and executive management. If you don’t actively champion and support whatever program you roll out, then no one will believe you are serious and your employees’ participation rate will not be worth the effort.