Close

Sign up to get the latest news and stories on the future of work.

Subscribe Search

Search form

The hype around wellness in the workplace has reached critical mass. Corporations that once rolled their eyes at Google's full-time yoga instructors are now doling out annual wellness stipends of their own — paying for more "Namaste" to retain employees and promote overall wellness.

And there's no sign the investment will stop anytime soon. According to the RAND Corporation, companies spend a total of $6 billion annually on wellness programs. Google, for example, shells out nearly $13,000 a pop on its nap pods, while Shutterstock offers employees weekly massages that amount to $50 per hour per employee (plus $800 for each massage chair). This isn’t to say it’s always expensive to run these programs — some can be low to no cost. In 2015, RAND found that most organizations plan to invest the same as 2014 (if not more) into corporate wellness programs.

But the question remains: Is this a money-wasting fad or a valuable engagement and retention tool?

The Employee Engagement Argument

With 70 percent of U.S. workers reporting that they feel disengaged in the office, some companies believe wellness programs will reverse the trend. It makes more sense (even monetarily) to try to re-engage disillusioned employees than hunt for new talent. Studies show that disengaged workers are 2.5 times more likely to leave their jobs. One way to keep them is through these programs.

"Employees value wellness-related benefits and want to work for companies that support their health-related goals," says David Roddenberry, founder of health-incentive company HealthyWage.

To Roddenberry's point, experts have found that the next generation of workers place value in meaningful workplace perks, sometimes choosing a company with a healthy ethos over one that will simply offer them a larger paycheck. A survey from TechnologyAdvice found that 56 percent of people would trade a salary increase for workplace perks, with gym memberships as the second-most requested perk.

The Business Case

From a business perspective, however, wellness programs can seem like a money-suck as there's no clear — or uniform — way to measure ROI. Some companies opt to measure retention rates after implementing new practices, while others focus on decreased healthcare claims. It's hard to know for certain if Carol in accounting quit smoking because of the new corporate cardio classes, for example, or because her daughter implored her to make the life change — or maybe both.

The difficulty, says Roddenberry, arises when companies simply throw money at wellness, but don't implement an actual program (i.e., they don't set goals or have a great answer to the "why" of the investment). Copycat programs and lack of due diligence do not make for successful employee wellness programs.

"Incentives are a great example of something that works well in certain contexts, but not others," Roddenberry notes. "Some employers think that you can offer a $200 reward and expect employees to lose weight or quit smoking. Unfortunately, the money alone is not enough. The $200, when administered as part of a well-structured weight loss or smoking cessation game, can drive significant positive lifestyle change."

The Takeaway

Probably the most extensive employee wellness study to-date is a seven year study of 67,000 PepsiCo employees. While the study found that the beverage behemoth's chronic disease management programs lowered health care costs (lowering hospital visits 29 percent), lifestyle programs proved less successful (for each dollar spent on lifestyle programs, Pepsi lost $.52 in health care costs). The takeaway? Don't invest in a wellness program if your goal is to save money—invest in it if you want to improve company culture and help employees get closer to the ever-elusive "work-life balance."

"Unfortunately, too many companies are trying to implement wellness programs with little to no experience or game plan for success," Kinema Fitness president Joshua Love writes on Forbes. "As a result, more programs fail than succeed. The real problem? Corporate wellness cannot be treated as a band-aid, and you definitely won't be able to find it in a fitness app."

Ultimately, an investment can't be about returns. It can, however, foster a community of people geared towards a common goal. Better engagement, higher attendance rate, healthier families and talent attraction are all commonly believed to be by-products of a thoughtful wellness program — the question for HR is whether or not you're willing to take that leap of faith.

Photo: Shutterstock