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Making the Case for Employee Wellness Programs: The Hidden Cost of Stress at Work

Human Resources

The effects of workplace stress can have a measurable, negative impact on business performance and profitability, while the American Psychological Association (APA) reports that employee well-being has a valuable impact on a company’s bottom line. Positive effects include lower absenteeism, less tardiness, less turnover, and improved work quality and productivity. For example, the APA’s Psychologically Healthy Workplace Award winners report a significantly lower turnover rate than the national rate of 38 percent, as well as a 73 percent employee satisfaction rate.

Challenges and Concerns

While the numbers bear out the benefits that employee wellness has to the bottom line, groups such as consumer advocates, unions and the American Heart Association have raised concerns about wellness initiatives. These groups are worried about financial incentives or penalties (in the form of health insurance premium reductions received or disallowed) tied to meeting health status goals that may not be totally under the control of the participants.

Their major concerns revolve around the suspicion that employers are shifting health care costs from healthy employee populations to sick employee populations rather than solely improving health. They also worry that employers are disregarding privacy issues and creating barriers to wellness through unaffordable health insurance and the work and environmental stressors experienced by employees as a result.                                                                                    

Measuring the Effects of Wellness

It’s simple to look at study results and statistics of how employee wellness has affected other companies and industries. For example, Harvard researchers report that medical and absenteeism costs fall by about $3 for every $1 spent on wellness. However, measuring and reporting on the impact of wellness in your own company can be a challenge. As a starting point, use simple return-on-investment calculations that report costs for programs versus savings on group health insurance premiums, claims, employee absenteeism and turnover. More in-depth measurements such as how the benefits of employee wellness affect branding and the company culture are more difficult to measure.

Most Commonly Offered Wellness Initiatives

Harvard researchers studying the effects and effectiveness of employee wellness programs report that the most commonly offered wellness initiatives are 1) health risk assessments and self-help health education materials, and 2) professional health care counseling or on-site group activities led by trained personnel. Health risk assessments commonly screen for blood pressure, cholesterol and body mass index and are used as motivation to make healthy changes.

With rising healthcare costs, increasing work-related stress and a competitive global marketplace that requires a highly productive, present workforce, employers can’t afford to ignore the benefits of employee wellness. It can be a key attraction and retention tool and employer branding component that can give employers an advantage in recruiting and business performance.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.