Wellness Programs – Do They Work?
In the wake of the Great Resignation, it’s no secret that there’s a war for talent in many industries. Companies seeking to attract and retain top talent are reassessing their approach to organizational culture and benefit offerings to show potential and existing employees that they’re valued.
However, employers are in a precarious position wherein they need to balance offering robust benefits reflective of their employee population’s needs while protecting their operational costs. Employee benefits are a high-spend ticket item for employers, amounting to just a little over 30 percent of an employee’s total compensation on average.
To help curb claims costs, many companies have adopted corporate wellness programs. As of 2020, about 81 percent of companies with over 200 employees offered some type of wellness program. In theory, these programs provide a win-win situation for employers and employees: employees gain access to resources that will help them better manage their health, which in turn should improve their overall health outcomes, resulting in fewer incidences of high-cost claims for employers.
It’s not surprising that the corporate wellness market is booming. In 2021, it was valued at $18 billion, and is expected to grow 3.77 percent year over year from 2022 to 2030. With organizations investing money into these initiatives, it begs the question: do wellness programs work?
Research conducted over the years has rendered conflicting results, with some studies showing that the efforts don’t produce the desired outcomes and vice versa. However, in 2019 the University of Chicago and Harvard conducted the first peer reviewed, multisite, large scale, randomized controlled trial of a workplace wellness program that’s widely considered the most convincing evidence of wellness programs’ efficacy.
Researchers collected data from 33,000 workers across 160 sites over 18 months. They found that employees “working at sites offering the program did not have better clinical measures of health, such as body mass index, blood pressure or cholesterol after 18 months, nor did they exhibit lower absenteeism, better job performance or lower health care use or spending.”
However, the study does acknowledge that 18 months might not be enough time to measure the long-term effects of wellness programs on employees’ health outcomes. Additionally, this doesn’t necessarily mean that workplace wellness programs are a bad idea.
Wellness programs might be more successful if they acknowledge that maintaining a healthy lifestyle is a journey that varies from person to person, and that health encompasses not just physical health, but also mental health. Additionally, to improve health outcomes, wellness initiatives should also recognize that some individuals might need to overcome socioeconomic barriers to access care, or have comorbidities that make improving health outcomes more challenging.
It’s clear that in order to improve health outcomes, people must adopt patterns, not just take wellness modules for points on an app. As companies better understand how to encourage healthy behavior, wellness programs might evolve to render the desired results.
If you want to assess whether or not a wellness program makes sense for your company, connect with our Employee Benefits team today.
This material has been prepared for informational purposes only and was generated from information provided to BKS from the client and/or third-party sources. Therefore, BKS makes no warranty or representation(s) as to the accuracy or appropriateness of the data and/or the analysis herein. This information is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your tax, legal and accounting advisors for those services.