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The Truth About Employee Wellness Programs: Do They Provide ROI?

December 8, 2016

employee-wellness.jpgOut with the old, in with the new. That's the motto that many companies are channeling when looking at their wellness programs. A decade ago, workplace wellness focused on half-baked smoking cessation plans or free flu shots. Today, companies are constantly developing new and innovative benefits and programs to promote healthy eating, physical activity, and mindfulness at work.

For example, companies are swapping out conference rooms for napping rooms (AOL), meditation rooms (Sweetgreen, Twitter, Salesforce), or rooms with treadmill desks (Zillow). Other companies are encouraging employees to do more outside of the workplace by paying for employees to participate in local runs (Primal Wear) or encouraging employees to use company-owned kayaks and stand-up paddleboards in San Francisco Bay (Glassdoor).

Silicon Valley companies used to be the only ones doing this, but now more and more workplaces are focusing efforts on wellness programs. So what are some of the well-known companies doing?

  • Facebook perks include adoption and surrogacy help, egg freezing, cash for newborn expenses, and four months of new parent leave.

  • Nike offers employees access to world-class tracks and trails, an indoor rock wall, a lap pool, and a sand volleyball court.

  • Whole Foods Market employees enjoy a 30% discount on all healthy eats and can take unpaid sabbaticals after 6,000 hours of work.

  • Zappos gives employees free generic prescriptions, gratis primary medical care, and access to an EngeryPod ergonomic napping chair.

  • Amazon is building three areas that will contain plant life and tree house meeting areas so employees can be more creative while being in “nature.”

This all sounds really exciting. The question for companies is, does it pay off?

People spend nearly half of their waking hours at their jobs on a typical workday. According to a Gallup poll, people work an average of 47 hours per week. Given the amount of time spent at work, potential and current employees are going to want to ensure that they enjoy their time at work, but also are able to enjoy time outside of work.

Meaning, they want a have a healthy work-life balance. This was found to be true in a recent report from PwC. They found that 97% of young men and women said that work-life balance is very important to them when considering job opportunities. A company’s wellness program will have a big impact on recruitment and retention.

Related: 5 Things Successful Companies Do to Retain Top Talent

It's one thing to offer these programs, but it’s another thing to offer them and make sure that they are readily available. In the same study by PwC, they found that half of the people indicated that while their employer has wellness and flexibility programs, in practice they are not readily available or could even be limiting. For example, Kickstarter found that an unlimited vacation policy is actually limiting because their employees took less time off when no one was “counting.”

Organizational support for these programs is critical. This shows that the company genuinely cares about their employees. Employees who believe that their employer cares or values them and their health show higher well-being and engagement with their job. This not only translates to less missed days at work due to poor health but also to greater performance and productivity at work.

In the end, there are several benefits of wellness programs. Wellness programs help to recruit and retain talent, increase employee productivity, decrease turnover, and reduce employee health care costs. It seems like a big investment for companies, but it pays off. A recent analysis from a top company found that every dollar spent on wellness programs brought about $1.50 return on investment. It pays for companies to demonstrate that they value employee efforts and wellbeing by offering wellness programs.

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Alissa Parr, Ph.D. Alissa Parr, Ph.D. is a Senior Consultant at PSI. Her areas of expertise include the development, implementation, and evaluation of assessment processes. Alissa has experience managing entry-level through executive level assessment and selection efforts across a number of different industries including government, financial, military, education, healthcare, and manufacturing.