Employee wellness programs

Introduction

In the recent past, organizations have perceived employee wellness programs have simply been regarded as a privileged incentive for “worthy” employees rather than as a strategic imperative. However, recent research studies provide otherwise with progressive organizations registering returns on investments of up to a ratio of six to one accruing from well managed employee wellness programs. Programs with high ROI’s have shown that engagements by organization leadership teams through multilevel approaches strategically aligned towards organizational identity and goals have not only resulted in lower healthcare expenditures but also greatly enhanced productivity through higher employee morale levels.  Organizations have realized huge rewards from wellness program designs with high relevance, quality and broad scope; wider accessibility; external as well as internal partnerships and effective communication. This research paper seeks to underscore the fact that good employee welfare programs indeed translate to less organizational costs, higher savings, improved productivity and higher employee morale thus calling for greater adoption of similar policies all across the US economy.

Literature Review  

According to Berry, Mirabito and Baun (2010), the pharmaceutical giant, Johnson and Johnson from 1995 to 2010 realized a 67% drop in the number of employee smokers. More so, the number of employee suffering from high blood pressure and physical inactivity declined by more than 50%. This is not as a result of a change in the HR policy of employee recruitment and retention but rather undertaking on a well founded and supported employee wellness program. Managers at this organization have come to terms with the fact that strategically aligned and comprehensive investments on employee wellness do indeed translate to huge savings. Investing in employee mental, social and physical health has resulted in savings of up to 250% in the last decade alone. Johnson and Johnson provides that from the year 2002 to the year 2008, returns on employee wellness programs investment stood at 2.71 dollars for very one dollar invested.

Federal healthcare laws passed in the recent past offer organizations within the US grants and tax incentives accruing from the integration of comprehensive employee wellness programs. This has played a significant role in enabling organizations realize greater savings and huge reductions in costs attributed to healthcare costs which are currently on the upward trend as American companies contend with an aging workforce.

Regardless of whether the government promises financial incentives or not, Milanie and Lavie () provide that organizations realize more savings, less costs and higher productivity levels from having healthy employees. A study conducted by these two researchers focused on one employer where a random sample involving 180 employees as well as their next of kin were registered as study participants. The participants were mainly individuals who had undergone exercise training and cardiac rehabilitation from a team of experts. Among the participants were a group considered as high risk subjects of whom cardiac problems were most likely to be registered as they possessed high rates of body fat, anxiety, blood pressure among a number of other measures. 57% of these high risk group participants were turned into individuals with a low status risk after participating in an employee wellness program conducted over a period of six months. The company realized huge savings from improved employee health of approximately 1,400 dollars per participant.

The current US economic environment experiences ballooning healthcare spending precipitating insurance companies, policy makers as well as employers exhibit heightened interest in programs aimed at improving employee health while minimizing on associated costs. There have been numerous discussions forums in the US contemplating on the attainment of better health outcomes stemming from better investments on health promotion and disease prevention. President Obama for instance has singled out disease prevention as pivotal components towards the realization of universal healthcare reforms.

The marked enthusiasm towards workplace wellness programs gathers much of its support from the fact that 60% of the American population acquires healthcare insurance coverage via employment oriented plans. Another fact is that most employees spend their active time within the workplace thus the tendency by employers to favor investments on employee health. These kinds of programs are seen as a means with which to realize reductions relative to healthcare costs. This implies that healthcare premiums reduce accordingly. Such programs also translate to a healthier workforce more employee productivity and less absenteeism. It has also been argued that benefits from such programs favor employers directly as such programs also serve to attract desired workers.

Such factors have motivated employers to accord employee wellness programs positive interest especially with regard to large organizations. Baicker, Cutler and Song provide that in 2006 less that 20% of organizations employing more than 500 workers indicated to have incorporated employee wellness programs. In 2008, a similar survey consisting of large organizations showed that 77% of them accorded employees formal health and employee wellness programs. Smaller companies have reflected relatively slower progress towards offering similar programs with programs on offer being identified as presenting limited scope.

A number of prominent case studies have exhibited positive returns with regard to employer investment with regards to prevention based programs. For each dollar spent, employees tended to realize savings exceeding the dollar invested. Citibank, a large financial services organization, operated a healthcare management program which reflected notable savings of up to four and half times on each dollar spent. Similar evidence from institutions such as Bank of America, California Public employees Retirement System and Johnson and Johnson has supported for wider acceptance of such programs by other large organizations.

As much as there is justifiable evidence associated with high returns on such programs it has been noted that majority of large employers seem to shun broad based employee wellness promotion initiatives. In 2004, the National worksite Health Promotion Survey provided that only a mere seven percent of organizations sought to offer comprehensive programs. As defined by the Healthy People Medicine report of 2010. Comprehensive employee wellness programs included worksite screenings aimed at according employees appropriate medical care, healthcare education and wellness programs integrated into organizational structures.

Research Methods

These involved literature research from previously reported peer reviewed employee wellness programs and online searches including Lexis-Nexis, Medline and other similar social science as well as health databases. Search terms employed included wellness, employee, disease management, workplace and return on investment. These initiatives provided a primary sample of over 100 peer reviewed research studies with regard to employee wellness programs dating back three decades.

Analysis was limited to published studies fitting a defined criterion. The criterion included such aspects as programs were well described interventions; studies incorporated well described comparison groups and treatments; and provided analysis of novel and distinct interventions. Further analysis was conducted on research studies that offered difference in difference approximations of study outcomes. Raw data from such studies was also applied.

Results

Sample Characteristics

90% of programs included in the sample were sourced from large organization. Large organizations are those have greater than 1000 employees. 25% of wellness programs investigated included very large organizations with a workforce of over 10,000 employees. Of the different industries represented, 22% of organizations were in the manufacturing industry, 25% involved organization in the financial services industry while 16% of organizations represented municipalities, universities and school districts. Other industries involved included, the energy, telecommunications, utilities, consumer goods manufacturers and pharmaceutical companies. Ten studies were conducted across a number of locations mainly at organizational headquarters, at satellite locations and at times involved multiple employers.

Features of wellness programs

Two dimensions were employed to characterize employee wellness programs within the adopted sample. These dimensions are the focus of intervention and method of delivery. The delivery method characterizes the means with which the intervention was accorded. The most prevalent delivery method was the assessment on health risks. This is one that involves employees to avail self reported information on personal health status which is then utilized by employers to formulate subsequent interventions. This was method was employed by about 80% of studies included in the adopted sample size. .

Employee participation was voluntary realized at treatment sites presenting selection bias as a point for much concern. Evaluations were normally associated with risk factor screening and involved assessing blood pressure, body mass index and cholesterol levels.  Important information relative to risk factors served to motivate participants. Programs that did not employ assessment methods involved onsite gymnasiums which employees were requested to utilize.

Most programs focused on smoking and obesity which are the two leading causes of preventable fatalities within the US. 60% of programs evaluated focused on physical fitness and weight loss. Apart from three programs, all other programs focuses on risks or multiple risks associated with participants. 50% of programs were seen to focus on smoking and in most instances in conjunction with obesity. 75% of programs tended to focus on a single risk factor such as back care, stress management, alcohol consumption, nutrition, preventative care and blood pressure in addition to obesity and smoking.

Effects of employee wellness programs on organizational medical spending

Of the studies sampled, 22 highlighted effects of programs on healthcare expenditures. The sample size associated with intervention groups surpassed 3,000 workers while comparison group sizes averaged 4,500 workers. On average, these studies examined programs for durations of three years with most of them continuing beyond the research study duration.

On average, all programs reported interventions realized savings of about 358 dollars per employee per annum relative to healthcare costs where employers spent 144 dollars per employee per annum. The average return on investment on 12 employee wellness programs was calculated as 3.37 dollars on each dollar invested.

Impact on absenteeism

Across the studies involved, program savings resulted in an average of 294 dollars per employee per annum against program costs of 132 dollars per employee per annum on 22 studies selected. These studies highlighted the effects of wellness programs on employee absenteeism. All programs showed a reduction in the days employees were absent. Similar to studies relative to medical costs average savings were seen to be similar with regards to subsets of research studies involving strenuous control groups.

Of the 22 studies examined, nine of them presented results indicating 1.7 employee days were saved per employee annually. Eleven studies provided results which averaged savings on absentee dates at 1.9 per annum per employees which translated to 309 dollars per employee per annum. This calculation was based on an hourly wage rate 20.49 dollars prevalent in 2009.

Discussion

Leadership on a multilevel approach

In most instances, it is common to find workers failing to participate fully in wellness programs. Some employees cite limitations in time; others perceive minimal benefits while some simply exhibit distaste for healthy lifestyles. Other employees report of the lack of information on services available while others blame this on managers who tend to be unsupportive. A few employees either mistrust the organizations objectives or regard their health as so personal as not to involve the organization. It is therefore necessary for organizational leaders to cultivate an organizational culture where employee healthcare is regarded passionately, persuasively and persistently flowing from the leaders to the general employee.

In many cases, employee health directly relates to financial health. Therefore, most employees will fail to enroll into programs that seek only to focus on social status. For instance, if an organizational leaders or the entire team openly show employees the need for taking time to consider personal health, employees will follow suit. Such initiatives are vital towards enabling organizations realize the benefits of employee wellness programs.

In many progressive organizations, managers are required to adhere to a personal wellness objective. This is because it is a well accepted fact that managers tend to create mini-cultures within departments. They can therefore play an important role in according much needed support towards realizing the benefits of employee wellness programs.

Organizations should incorporate within corporate structures dedicated departments with regard to employee wellness programs. This would require experts who professionally seek to develop and ensure successful coordination of comprehensive and clear programs. These professionals should also be at the fore front of promoting such programs to all levels of the organization and regularly audit its effectiveness. Such roles should take precedence of ordinary managerial roles as they should seek to align expertise with organizational strategies and culture.

Wellness ambassadors provide such programs with an on the ground promotion mentoring and educating employee of the benefits of wellness programs. Such individuals should also seek to organize and promote in-house health events.

Alignment

It is worthy to note that as organizational goals shift the chance to comprehensively ingrain employee wellness programs into organizational cultures are often overlooked. Such cultural shifts may take a long time to come to fruition. However, leaders should employ such programs as extensions of an organization’s identity and future obligations.

This implies that patience and careful planning should accompany employee wellness programs. For instance, the CEO At Healthwise is said to have undertaken on a personal endeavor to allow the adopted employee wellness program to assimilate to the organization’s corporate structure since its inception. This was encouraged through monthly meetings which always accorded wellness teams to present current progress reports. Health wellness activities and health ambassadors were organized through health wellness days held each year. This resulted in an organization that reflected a culture sustaining optimized wellbeing relative to mental, physical and social health.

It is also common to find that employees always tend to reflect negative on organizational initiatives they perceive as being imposed on them. Loosing trust in wellness programs offered is common especially in such cases where anti smoking campaigns are employed immediately and rigorously. Rather than realizing the true and clear aims of wellness programs, such initiatives simply make such employees go into hiding rather than supporting the fight against such addictions. It is therefore important for organizations to adopt measured approaches when incorporating wellness programs into organizational cultures.

Another means through which organizations can successfully realize the benefits of employee wellness programs is through allowing such initiatives to compliment organizational processes. Such a program was successfully developed at Chevron where safety is a paramount pillar of the organization’s adopted culture. In this organization, one employee’s safety translates to the safety of fellow workmates. For instance, to ensure safety in oil rigs, employee health status with regard to social mental and physical wellness is critical to occupational safety. By adopting this paradigm, the organization was able to develop a robust wellness program comprehensively ingrained into its culture.

Relevance, scope and quality

The unfortunate reality is that organizations tend to narrowly delve into issues of employee health. It is important for organizations to comprehensively understand that employee wellness does not only involve physical wellness. Mental health issues such as stress and depression are major causes of low productivity. It is important that wellness program managers tasked with formulating and continuously evaluating employee wellness programs to relate beyond conventional physical wellness attributes. For instance some organizations go beyond conventional wellness programs to involve nondenominational outfits which offer counseling services offering services to alleviate impacts of death of a loved or divorce.

http://content.healthaffairs.org/content/early/2010/01/14/hlthaff.2009.0626.full

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