10 Reasons to Implement Employee Wellness Programs

In 2023, an estimated 52% of U.S. companies offered some form of employee wellness program.¹ The use and scope of these programs have evolved in recent years as patients and professionals alike have realized the impact things like unmanaged chronic conditions and stress can have on personal and company success. In addition to basic health essentials, well-being programs provide support in related areas, including physical, emotional, mental and social health.

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Corporate wellness programs have gained traction for good reason — employees value them, and there is a growing body of research regarding how businesses can benefit from financial, recruitment and cultural standpoints. Companies can utilize well-being programs to target important KPIs like retention rates, productivity and job satisfaction. 

Here are 10 reasons to implement an employee wellness program:

1. Establish appropriate work-life balance

Wellness programs support proper work-life balance by encouraging employees to incorporate healthy habits like disconnecting after hours and focusing more on personal well-being. A good work-life balance can have a powerful effect on your workforce. Work-life balance is considered the most influential of the many factors impacting employee mental health.² Furthermore, a recent Harvard and Penn State University study discovered that implementing work-life balance practices can decrease the risk of cardiovascular issues among vulnerable employees.³

Using a corporate wellness program to establish work-life balance also directly elevates employee output and retention efforts — in a 2022 Flexjobs survey, 49% of employees indicated they'd leave a job due to a lack of healthy work-life balance.⁴

2. Manage stress levels

In a 2023 global report, the U.S. tied with East Asia and Canada for the highest workplace stress levels.⁵ With that in mind, it is unsurprising that around 83% of U.S. workers report suffering from work-related stress and about one million miss work each day because of it.⁶

According to Gallup, work missed due to mental health costs the U.S. economy an estimated $47.6 billion annually in productivity loss.⁷ Even if employees are not missing work, stress and other mental health pressures still cost companies — 43% of employees agreed that their mental health affected job performance.⁸

The impact of stress management doesn't stop there; it also affects overall employer healthcare costs, as work-related stress costs an estimated $190 billion in annual U.S. healthcare spending.⁹ Introducing a wellness initiative around stress management is crucial to relieving burnout and reducing related costs.  

3. Prevent employee health risks

Stress is not the only healthcare expense that benefits from a program that supports well-being. Employee wellness benefits that include prevention and early intervention resources help reduce long-term costs by identifying potential issues before they escalate to more costly conditions. 

As of 2022, 55% of large companies offering health benefits provided health risk assessments, with a smaller but growing percentage offering biometric screenings compared to the previous year. Due to their potential strategic value, over 50% of companies use incentives to increase employee participation in these preventative screenings.¹⁰ These screenings have the dual benefit of providing employees with valuable health awareness and employers with data to evaluate program success and implement more effective programs using targeted preventative interventions that address specific employee health risks. 

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4. Control healthcare costs

Chronic conditions are the leading drivers of America's $4.1 trillion annual healthcare costs,¹¹ making disease management a valuable cost-reduction strategy for employers. In a Workplace Wellness Programs Study, 60% of respondents reported reduced healthcare costs at their organization, with the most significant reduction in inpatient fees.¹² The disease control and management aspect of workplace wellness programs was estimated to have an ROI of $3.80 per dollar spent.¹³

Though the exact amount saved will vary by program and company, studies have found promising data on the power of institutionalized health programs. Harvard researchers estimate that every dollar spent on workplace disease prevention and wellness programs can potentially reduce medical costs by an average of $3.27.¹⁴ Between the direct savings from reduced healthcare costs and indirect profits from improved productivity rates, supporting employee well-being can generate significant savings over time.¹⁵

5. Nurture job satisfaction rates

The 2017 Workplace Wellness Trends Survey by The International Foundation of Employee Benefits Plans, found that employers with wellness programs reported a 67% higher job satisfaction rate among employees.¹⁶ As job satisfaction rates are primarily influenced by work-life balance, benefits, relationships with managers and peers, workplace recognition and career development opportunities, it is unsurprising that a well-strategized program can have a positive impact. However, offering benefits is only half of it, as the employees who participate in wellness programs generate the most notable boost in satisfaction rates.¹⁷

Job satisfaction rates can affect everything from employee engagement and turnover to overall profitability.¹⁸ The power of a corporate wellness program is that it simultaneously shows current and prospective employees that the company cares about their well-being while providing them with tools to improve their work experience and life outside of it.

6. Attract top talent

More individuals prioritize proactive health efforts, and this shift is reflected in their expectations of employers. As of 2023, 73% of applicants say they would not consider applying to a company that fails to invest in employee well-being.¹⁹ To attract top talent, companies must show they can provide the best work experience. When assessing a job at a different organization, 63% of employees say that work-life balance and wellness programs are of primary importance.²⁰

Companies that include health initiatives bolster recruitment efforts by standing out.²¹ When considering employers, prospective applicants list "organizations that care about employees' well-being" in their top three criteria, according to 2021 Gallup data.²² Whether it is the highest-quality candidate pool or competitors’ top performers looking for their next move, these programs help attract talent (and keep them). 

7. Retain your workforce

Though recruitment often takes center stage, employee retention is even more critical, particularly in the wake of 2022's "Great Resignation." According to the U.S. Bureau of Labor Statistics, as of May 2023, the number and rate of quits increased to 4 million and 2.6%, respectively.²³ Losing staff can damage the existing workplace by creating significant knowledge gaps and putting more pressure on those left behind, thereby increasing burnout rates. It also comes with a hefty price tag; the estimated cost of replacing an employee can range from one-half to two times their annual salary.²⁴

Workplace wellness programs reduce employee turnover by fostering loyalty. Just as 84% of employees believe supporting health and wellness is a company "must-have," 79% do not feel loyalty to companies that fail to prioritize their well-being.²⁵ With the right combination of benefits, a corporate wellness program could be what keeps employees from looking at other organizations. 

8. Engage employees

In 2021, only 36% of employees in the U.S. were engaged at work,²⁶ a costly stat considering disengaged employees cost U.S. organizations an estimated $450 to $550 billion annually.²⁷ The high cost of disengagement stems from various factors, such as higher rates of absenteeism, accidents and errors, which end up causing lower productivity rates, profitability and share price in the long term.²⁸

According to Gallup, employees who feel their employers are invested in their well-being are three times more likely to be engaged at work.²⁹ Not only can a wellness program engage employees, but it can also help them thrive, increasing productivity and reducing burnout at even faster rates. Even companies that already have high levels of engagement should consider wellness programs, as highly engaged employees who are not thriving are 61% more likely to experience burnout.³⁰

9. Boost productivity and reduce absenteeism

In 2019, 84% of employers recorded higher employee productivity and performance due to implementing wellness programs.³¹ These initiatives provide employees with individual resources while building a healthier work environment as a whole. Given the time employees spend at work, the quality of their work environment largely determines their output.³²³³

In addition to supporting a healthier environment, health and wellness programs can help target specific drags on productivity levels, like unmanaged chronic conditions. Absenteeism and presenteeism caused by chronic conditions are linked to productivity losses that cost U.S. employers approximately $2,945 per employee per year.³⁴ With employee wellness programs, companies can help prevent and manage chronic conditions, simultaneously reducing healthcare bills and losses to overall productivity.

10. Build a supportive company culture 

Wellness programs are a powerful method of fostering a welcoming and supportive company culture. According to Workhuman, employees with recognition-led programs are 10 times more likely to feel a strong sense of belonging in their organization and twice as likely to maintain a positive outlook on their lives.³⁵ Ultimately, a good employee wellness program and its associated benefits have a trickle-down effect on company culture. 

But the reverse is also true; company culture sets the precedent for program adoption. A 2016 survey from the American Psychological Association showed that employees at companies where management supported well-being initiatives had 53% higher motivation rates, 61% more job satisfaction and 72% higher likelihood of recommending their workplace compared to those without support.³⁶ A company culture that encourages employee participation in these programs will be more likely to experience the benefits health and wellness programs can produce.  

Summary

Embracing corporate wellness programs goes beyond surface-level health initiatives. These programs have become integral to business success, offering a multifaceted approach to improve health outcomes, finances and company culture. As organizations navigate the evolving landscape of workforce dynamics, wellness programs emerge as a remedy for increased societal pressure and employee expectations of both their employers and their healthcare experiences. 

Support your bottom line with solutions proven to curb costs, drive employee engagement and enhance productivity. By prioritizing employee well-being, you can nurture a healthier workforce and boost your company's benefits packages for sustainable competitive advantage.

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