Wellness is a $6 million industry, yet despite major investments, employers don’t always see the results they bargained for in return.

A 2014 Rand study found that wellness programs reduced the employer’s average healthcare costs by about $30 per member per month. But this was largely a result of the disease management component of the program, which was responsible for 87% of those savings. The other half of the wellness program — the lifestyle management component — didn’t have nearly the bang for the buck employers might expect: only a 50 cent ROI for every dollar spent, compared to disease management’s robust ROI of $3.80 for every dollar spent. In total, that’s only an ROI of $1.50 for every dollar spent.

[Image credit: Bloomberg]
[Image credit: Bloomberg]

What’s more, only 13% of employees participated in the disease management component while 87% participated in the lifestyle management component. So according to the Rand findings, the higher participation in the lifestyle management component contributed only slightly to overall savings.

That’s not to say that half of the wellness program should be forgotten. Intangible benefits, as well as tangible ROI, make those programs well worth the investment. Yet, if employees don’t participate in optimum levels, then the programs are moot, experts say.

While 53% of employees strongly agreed that employees should play a role in helping them stop unhealthy behaviors and manage financial issues, participation rates remain low. Only 24-37% of employees participate in these programs, according to a recent survey of 1,000 employees by Welltok and the National Business Group on Health.

The benefits may exist, but if they’re not personalized in a way that feels relevant for employees then this disconnect will persist.

“The programs that deliver the highest ROI are those that allow the consumer to have the best personalized experience,” explains Laurie Gondek, vice president at Welltok Inc.

That means the program addresses near term returns for employees who need to manage chronic conditions, as well as provides rewards to healthy employees who work toward their personal best. This could be rewards for biometric screenings, stress management programs and long-term engagement through team challenges.

“The well-being program can be working in tangible and intangible ways. Tangible being a direct dollar amount I can take to my CFO, and intangible meaning that the program can be used as a retention as well as an employee attraction tool as a way to unify employees to give greater job satisfaction,” says Gondek, who worked as a developer of IBM Watson-powered CaféWell Concierge, as well as with employers of all sizes at Cigna for 26 years.

The brightest stars in this arena, such as tech companies and Whole Foods, consider wellness to be a cornerstone of their company, Gondek says.

“It’s part of their people strategy,” she says. “The message they’re sending is that we really care about you as a person and want you to be healthy.”

Gondek suggests employers should carefully consider the following four questions as they’re often overlooked and could go a long way into ingraining a wellness program into the fabric of a company.

1. Where are you as a company?

Wellness is not a one-size-fits-all program. Gondek points to one HR leader who had very successfully implemented a wellness program at a prior company, but when she attempted to implement the same program at her current firm she ran into problems. This new company had just acquired another organization and was merging with a third, so employees’ main concern was to retain their jobs.

For such an example, stress management might have been a more productive focus than starting a step program at that point in time.

This also applies to incentives. In the beginning, employers might consider monetary rewards to jumpstart interest. But even with cash or gift cards, Gondek recommends employers “be more outcomes-based. Don’t [simply offer] a one and done type of incentive.”

They might doll out a cash reward a little at a time, so employees are motivated to keep participating. Ultimately, peer support, encouragement and competition are the strongest motivators for employees.

According to the NBGH and Welltok survey, 87% said that colleagues are top motivators for employees to improve their overall health at work and 57% said line managers motivate them the most.

Gondek advocates that understanding who employees lean on for their support network is key to creating programs that will increase engagement.

2. What’s working well already?

There’s no need to reinvent the wheel, says Gondek, who recommends HR leaders build on the foundation they already have.

“What’s worked well in your ecosystem, and what can you tap into?” she says.

For example, one company already had employees volunteering for Big Brothers Big Sisters, helping young children in the community with their homework.

They combined the volunteer activity with a gym class before studying and even added a team challenge. This amplified what they were already doing and got employees moving.

“Know what works and what employees get excited about in your culture and leverage it. Health and well-being can be tied to anything,” Gondek says.

In another case, an Illinois employer was going through a merger. In order to bring together employees from both companies, they implemented a fun run/walk where workers raced around different office locations, Gondek explains. While they were getting their steps in, they also learned about what each office does and who leads them.

3. Where are we now, and what are our goals?

Benchmarking is key to understanding the baseline of a population and defining what success will look like.

Gondek says it’s imperative to set realistic goals. And make sure they’re based on your population, not based on the national scorecard from an NBGH report.

Further, employers should study the program’s results as they go, not simply checking in a year later to see what worked and what didn’t.

4. What are our key business objectives that are related to this?

Tying the goals of the health and wellness program to business objectives will ensure their long-term success and go a long way in gaining corporate buy-in and approval.

“If you don’t anchor [wellness] to something that matters to them, it generally won’t be successful.” she says.

A great example comes from a specialty pharmacy company where the CEO wanted to link the wellness program to what they do as a company.

So the HR leaders tied incentives to use of pharmaceuticals and rewarded over-the-counter types of drugs that the company could dispense. If an employee or family member needed a specialty drug or over-the-counter item, they were incentivized to choose a brand this company made.

Not only did employees gain a better understanding of how these products worked, they were rewarded for consuming company products by earning the a $0 copay.

“It not only made them more conscious of how they were spending their pharmaceutical dollars, which is the highest trend area most employers are complaining about right now, it also made them more savvy and they paid less out-of-pocket,” explains Gondek.

“The company saw a better buy-in to their total business strategy and employees understood better what they do for a living, as well as, a lower benefit cost to the employer themselves,” she adds.

Tying a wellness initiative into the business strategy is a great way for employers to see an intangible benefit from wellbeing programs, something that may not be reflected directly in ROI, but could count a long way in employee retention and engagement.

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