Any reputable organization wants to take care of its employees. Historically, this meant paying a fair wage and trying to ensure workers’ safety. Then employee benefits came to the fore and, to stay competitive, just about every employer had to start offering a competitive package starting with health care coverage.
Most recently, however, “taking care of your employees” has taken on a quite literal meaning. More and more employers are implementing wellness programs designed to support healthy behaviors at work and home, as well as to discourage illness-inducing practices such as tobacco use.
If your organization has taken this step, or is considering it, be sure you fully grasp the human side of wellness programs as you design or administer yours.
Recognize the savings
The initial inspiration for many employers to create a wellness program is, quite simply, money. Health insurance costs continue to weigh heavily on most organizations. By establishing an effective wellness program, the thought process goes, an employer can curtail medical claims and, therefore, save money on benefits costs.
What’s more, the Affordable Care Act (ACA) includes incentives for organizations to create formal wellness programs. Employers that offer a qualifying, “health-contingent” wellness program may receive a maximum reward of 30% of the cost of their health coverage. And the maximum reward for the prevention and reduction of tobacco usage is 50%. (Additional rules and restrictions apply.)
Embrace the benefits
So those are the dollars-and-cents reasons to create a wellness program. But, as mentioned, you’ve got to remember the human side of the concept, too. Leaping into an initiative looking only to cut costs could lead you to cut corners — or, at the very least, not get the full potential benefits of a truly effective program. These include:
More robust productivity. It stands to reason, doesn’t it? A healthier workforce should mean a reduced rate of absenteeism. In fact, according to a 2014 report from the National Business Group on Health and Towers Watson, organizations with strong wellness programs had had lower unplanned absence rates (3.3 vs. 4.0 days/year) than “low-effectiveness” companies.
And healthy employees on the job are more likely to have increased energy, physical endurance and mental vigor. Remember, even if an occupation doesn’t involve manual labor, the ability to think clearly and make good decisions is incredibly important in today’s information-driven environment.

Higher morale. Although they may not always show it, employees enjoy being productive. So a healthier workforce that gets more done — and does more good work — is going to be happier as well. As evidence, a 2013 survey by Virgin HealthMiles Inc. and Workforce Management Magazine found that 77% of employees surveyed reported that their employers’ “health and wellness programs positively impact[ed] the culture at work.”

A ready-made recruiting tool. In just about every industry, the fight for talent goes on. As you look to hire the best and brightest, the ability to offer a fully realized wellness program could be a critical negotiating tool when it comes to Millennials.
Consider the 2014 Consumer Health Mindset Report, a survey of more than 2,700 U.S. employees and their dependents carried out by Aon Hewitt, the National Business Group on Health and The Futures Company. More than half (52%) of responding Millennials said “living or working in a healthy environment” influences their personal health. Compare that with only 42% of responding Gen Xers and 35% of responding Baby Boomers.

Beware of the risks
Of course, let it not go unsaid that wellness programs have their risks. To begin with, a program embarked upon only to cut business costs can conceivably end up driving up expenses. How so? Lack of participation. Organizations have spent months, much money and considerable resources debating and developing a wellness program — only to see it flounder with participants and eventually fail. Typical causes of such failure include:
• A lack of management buy-in (in other words, “if the boss don’t care, I don’t care”),
• Cultural misalignment (that is, the program’s tone and the nature of its activities don’t mesh well with organizational culture),
• Excessive complexity and confusion (for instance, written materials are garbled and unclear; or program incentives are unfair or too hard to achieve), and
• Bad vendors (not every guest speaker or exercise coach is cut from the same cloth; a single incompetent provider can ruin the experience for everyone).
Another major risk is compliance. As mentioned, the ACA incentivizes employers to boost participation in qualifying wellness programs. But, at the same time, the federal government actively discourages employers from doling out wellness-program financial incentives in a discriminatory manner. (Some employers do so by making it unduly hard or impossible for certain people to meaningfully participate in the program.) Be aware that recently finalized regulations on wellness program incentives, issued by the Equal Employment Opportunity Commission, will take effect on January 1, 2017.
Exercise careful forethought
Are wellness programs all they’re cracked up to be? Not always. But if you exercise careful forethought in creating one, and diligently maintain the program, your organization could very well see excellent results. For help with all aspects of performance management, please contact us here at Performance Dimensions Group.