Mays Business School Texas A&M University - Research Paper No. 2012-68 What's the Hard Return on Employee Wellness Programs? Leonard L. Berry Ann ...
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Mays Business School
Texas A&M University
Research Paper No. 2012-68
What’s the Hard Return on Employee Wellness
Programs?
Leonard L. Berry
Ann M. Mirabito
William B. Baun
Electronic copy available at: http://ssrn.com/abstract=2064874www.hbr.org
The ROI data will surprise
you, and the softer evidence
may inspire you.
What’s the Hard Return
on Employee Wellness
Programs?
by Leonard L. Berry, Ann M. Mirabito,
and William B. Baun
Included with this full-text Harvard Business Review article:
1 Article Summary
Idea in Brief—the core idea
2 What’s the Hard Return on Employee Wellness Programs?
Reprint R1012J
This article is made available to you with compliments of Leonard Berry. Further posting, copying or distributing is
copyright infringement.
Electronic copy available at: http://ssrn.com/abstract=2064874What’s the Hard Return on Employee Wellness
Programs?
Idea in Brief
Employee wellness programs have often
been viewed as a nice extra, not a strategic
imperative. But the data show otherwise.
The ROI on comprehensive, well-run
employee wellness programs can be as
high as 6 to 1.
The most successful programs have six
essential pillars: engaged leadership at
multiple levels; strategic alignment with the
company’s identity and aspirations; a
design that is broad in scope and high in
relevance and quality; broad accessibility;
internal and external partnerships; and
effective communications.
Companies in a variety of industries have
included all six pillars in their employee
wellness programs and have reaped big
rewards in the form of lower health care
costs, greater productivity, and higher
morale.
COPYRIGHT © 2010 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
page 1
This article is made available to you with compliments of Leonard Berry. Further posting, copying or distributing is
copyright infringement.
Electronic copy available at: http://ssrn.com/abstract=2064874The ROI data will surprise you, and the softer evidence may inspire
you.
What’s the Hard Return
on Employee Wellness
Programs?
by Leonard L. Berry, Ann M. Mirabito,
and William B. Baun
Since 1995, the percentage of Johnson & and Carl Lavie demonstrated that point by
Johnson employees who smoke has dropped studying, at a single employer, a random sam-
by more than two-thirds. The number who ple of 185 workers and their spouses. The par-
COPYRIGHT © 2010 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
have high blood pressure or who are physi- ticipants were not heart patients, but they re-
cally inactive also has declined—by more than ceived cardiac rehabilitation and exercise
half. That’s great, obviously, but should it mat- training from an expert team. Of those classi-
ter to managers? Well, it turns out that a com- fied as high risk when the study started (ac-
prehensive, strategically designed investment cording to body fat, blood pressure, anxiety,
in employees’ social, mental, and physical and other measures), 57% were converted to
health pays off. J&J’s leaders estimate that low-risk status by the end of the six-month pro-
wellness programs have cumulatively saved gram. Furthermore, medical claim costs had
the company $250 million on health care costs declined by $1,421 per participant, compared
over the past decade; from 2002 to 2008, the with those from the previous year. A control
return was $2.71 for every dollar spent. group showed no such improvements. The bot-
Wellness programs have often been viewed tom line: Every dollar invested in the interven-
as a nice extra, not a strategic imperative. tion yielded $6 in health care savings.
Newer evidence tells a different story. With tax We’ve found similar results in our own expe-
incentives and grants available under recent rience. In 2001 MD Anderson Cancer Center
federal health care legislation, U.S. companies created a workers’ compensation and injury
can use wellness programs to chip away at care unit within its employee health and well-
their enormous health care costs, which are being department, staffed by a physician and a
only rising with an aging workforce. nurse case manager. Within six years, lost work
Government incentives or not, healthy em- days declined by 80% and modified-duty days
ployees cost you less. Doctors Richard Milani by 64%. Cost savings, calculated by multiplying
harvard business review • december 2010 page 2
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the reduction in lost work days by average pay taking a fitness break. When MD Anderson
rates, totaled $1.5 million; workers’ comp insur- initiated its wellness program, president John
ance premiums declined by 50%. Mendelsohn took walks throughout the build-
What’s more, healthy employees stay with ing with wellness coach Bill Baun. For many, it
your company. A study by Towers Watson and was the first time the president had been in
the National Business Group on Health shows their work space or had shaken their hand,
that organizations with highly effective well- and he tended to start conversations with
ness programs report significantly lower volun- “How’s your wellness?”
tary attrition than do those whose programs Then there’s Johnson & Johnson, which has
have low effectiveness (9% vs. 15%). At the soft- about 250 distinct businesses around the
ware firm SAS Institute, voluntary turnover is world. J&J has only a few companywide man-
just 4%, thanks in part to such a program; at dates. Two concern health: Any employee with
the Biltmore tourism enterprise, the rate was HIV/AIDS will have access to antiretroviral
9% in 2009, down from 19% in 2005. According treatment, and all J&J facilities will be tobacco
to Vicki Banks, Biltmore’s director of benefits free. The latter mandate was implemented in
and compensation, “Employees who partici- 2007 after several years of intense internal dis-
pate in our wellness programs do not leave.” cussion. Both decisions demonstrated serious
Nelnet, an education finance firm, asks depart- commitment from the top.
ing employees in exit interviews what they will Middle managers. Except in tiny compa-
miss most. The number one answer: the well- nies, most employees report to a middle man-
ness program. ager. By shaping minicultures in the work-
To understand the business case for invest- place, middle managers can support
ing in employee health, we examined existing employees’ wellness efforts. Some companies
research and then studied 10 organizations, even ask managers to adopt a personal health
across a variety of industries, whose wellness goal as one of their unit’s business goals.
programs have systematically achieved mea- Wellness program managers. Every organi-
surable results. In group and individual inter- zation in our study has an expert who develops
views, we met with about 300 people, includ- and coordinates a clear, comprehensive well-
ing many CEOs and CFOs. We asked about ness program, continuously sells it throughout
what works, what doesn’t, and what overall im- the organization, and measures its effective-
pact the program had on the organization. ness. The best wellness managers connect their
Using our findings, we’ve identified six essen- expertise to the culture and strategy of the or-
tial pillars of a successful, strategically inte- ganization. These people are collaborative by
grated wellness program, regardless of an orga- nature, and analytical and credible by back-
nization’s size. Passes to fitness clubs and ground and performance. It’s no ordinary man-
nutrition information in the cafeteria are not agement job.
enough, as you’ll see. Wellness champions. Volunteer health am-
bassadors offer local, on-the-ground encour-
Pillar 1: Multilevel Leadership agement, education, and mentoring—in addi-
Leonard L. Berry is the Presidential It’s easy to find employees who don’t partici- tion to organizing and promoting local health
Professor for Teaching Excellence, a dis- pate in wellness programs. Some cite lack of events. No company in our study embodies
tinguished professor of marketing, and time, little perceived benefit, or just a distaste this concept better than supermarket chain H-
the M.B. Zale Chair in Retailing and for exercise. Others don’t know about avail- E-B, which has more than 70,000 employees at
Marketing Leadership at Mays Business able services or blame unsupportive manag- about 350 stores and other facilities. With
School, Texas A&M University. Ann M. ers. A few think their health is none of the more than 500 site-specific and nine regional
Mirabito is an assistant professor of company’s business or mistrust management’s wellness champions, the company hosts
marketing at the Hankamer School of motives. As with any worthwhile initiative, monthly conference calls for the wellness lead-
Business, Baylor University. William B. creating a culture of health takes passionate, ers, sponsors training webinars, and maintains
Baun is the manager of the wellness persistent, and persuasive leadership. an online wellness-resource center.
program at the MD Anderson Cancer The C-suite. Although employee health cor-
Center, a director of the National Well- relates with financial health, workers won’t Pillar 2: Alignment
ness Institute, and a director of the In- buy into a program that’s just about money. If It’s not unusual for firms to enter the wellness
ternational Association for Worksite the CEO makes time for exercise, for instance, space with a big splash that subsides to a rip-
Health Promotion. employees will feel less self-conscious about ple. As management priorities shift, the op-
harvard business review • december 2010 page 3
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portunity to integrate a culture of health can offer employees a monthly $50 discount on
pass. Ideally, a wellness program should be a medical insurance if they pledge that they and
natural extension of a firm’s identity and aspi- covered dependents will not use any tobacco
rations. But many executives forget that the products.
cultural shift takes time. A complement to business priorities. If a
Planning and patience. At Healthwise, CEO program doesn’t make business sense, it’s au-
Don Kemper’s personal commitment has al- tomatically vulnerable. Take Chevron, where
lowed wellness to permeate the culture from 60% to 70% of all jobs are considered safety-
day one. The company holds monthly all-staff sensitive, in that employees put themselves or
meetings that always include a wellness team others at risk. Fitness for duty is a central con-
report on current wellness activities and re- cern on oil platforms and rigs, in refineries,
sources. It sponsors an annual Wellness Day, and during the transport of fuel. To reinforce
featuring speakers and health-related activi- the mantra that healthy workers are safer
ties, when employees are encouraged to re- workers, Chevron has developed a strong well-
flect on the question “How can I be well?” In ness program that includes a comprehensive
addition, every other Wednesday afternoon, cardiovascular health component, a 10K-a-day
workers are invited to share a healthy snack walking activity, fitness centers, a repetitive-
and connect with others. One executive calls it stress-injury prevention program, and work/
“adult recess,” an investment that “pays back life services.
in spades” by creating opportunities for cross- Where Chevron does business in countries
team connections. that lack basic health care resources, it plays a
In contrast, Nelnet’s early investment in leadership role by partnering with local health
wellness rankled employees. Senior manage- ministries, NGOs, and other private sector
ment unexpectedly required health screenings firms to build infrastructure that helps to com-
to educate workers about their health risk fac- bat diseases such as HIV, malaria, and tubercu-
tors. Not ready to address such personal topics losis. It’s a matter of both corporate responsi-
and confused about the company’s motives, bility and business necessity for a company
employees pushed back. The company then that wants to sustain a healthy, talented, satis-
hired professional wellness staff and developed fied labor pool. For example, Chevron employ-
a comprehensive, long-term wellness strategy. ees staff two hospitals and four clinics in Nige-
It now emphasizes early communication and ria, including a riverboat clinic that sends
clear explanations to give employees time to health care providers to riverside communities.
ask questions and prepare for change. Today
employees embrace Nelnet’s wellness culture: Pillar 3: Scope, Relevance, and
90% participate in health risk assessments Quality
(HRAs); about three quarters of those engage It’s not unusual for a company to think about
in wellness activities. employee health narrowly. Exercise is exer-
Carrots, not sticks. The organizations in cise, right? But employees’ wellness needs
our sample favor positive incentives because vary tremendously.
employees lose trust when they feel they’re More than cholesterol. Wellness isn’t just
What Is Workplace being forced to act against their wishes. There
are, for example, many horror stories about
about physical fitness. Depression and stress,
in particular, have proved to be major
Wellness? managers who suddenly mandated smoke- sources of lost productivity. Wellness pro-
free work sites, with violators risking termina- gram administrators need to think beyond
Our extensive research on workplace
tion. That just sends the behavior under- diet and exercise. Biltmore, for example, of-
wellness has led us to arrive at this
ground instead of providing support in beat- fers a nondenominational chaplain service—
definition of it: an organized,
ing an addiction. on call 24 hours—to assist employees and im-
employer-sponsored program that
Lowe’s takes a measured approach by ini- mediate family members with divorce, seri-
is designed to support employees
tially introducing a concept then eventually ous illness, death and grief recovery, child
(and, sometimes, their families) as
making it mandatory, if necessary. Before insti- rearing, and the care of aging parents. The
they adopt and sustain behaviors
tuting its tobacco-free policy in 2005, the com- services are confidential, free, and voluntary.
that reduce health risks, improve
pany gave advance notice and offered assis- The chaplains meet their clients at sites rang-
quality of life, enhance personal
tance to employees who were trying to quit ing from the family residence to a funeral
effectiveness, and benefit the
smoking. Starting in January 2011, Lowe’s will home to Starbucks.
organization’s bottom line.
harvard business review • december 2010 page 4
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Individualization. Many organizations use from privacy, to limited self-awareness about
online employee HRAs to guide investment in biometric numbers such as blood pressure, to
wellness. An HRA combines a lifestyle survey lack of computer access. J&J, however, has
and biometric tests such as blood pressure, managed to achieve an HRA participation rate
cholesterol, glucose, and body mass index. above 80%. That’s in part because employees
The lifestyle responses (stress levels, physical who complete an HRA and receive the recom-
activity, eating patterns, tobacco and alcohol mended health counseling have their personal
use, and other health behavior information) health insurance contributions reduced by
are often combined with the biometric data $500 annually. High participation plus a com-
to calculate a health-risk status, or “real age.” prehensive HRA instrument enables J&J to tai-
This information is shared confidentially with lor its wellness programs from business to busi-
each participant to help him or her track well- ness: One may focus more on cancer
ness progress and, when appropriate, receive prevention, another on diabetes, and so on.
company-provided assistance in an area such A signature program. A high-profile, high-
as nutrition counseling. Employees can often quality initiative within a broader wellness
complete their biometric tests at company program can foster employee pride and in-
health fairs or on-site medical clinics. volvement. Consider, for instance, when MD
Companies are required by law to protect in- Anderson became the first health care organi-
dividual health information, but managers can zation to earn gold-standard accreditation
receive aggregated data that identify categories from the CEO Roundtable on Cancer. Earning
of greatest need and document changes in the accreditation is no small task: It requires
workforce health status. H-E-B, for example, tobacco-free work sites, benefit plans that
tracks the percentage of employees in each re- cover recommended cancer screenings, assis-
tail territory and business unit who are at risk tance to employees with cancer in entering ap-
in areas such as high blood pressure, physical propriate clinical trials, and investment in
inactivity, and smoking against benchmark workers’ physical activity and nutrition. Many
goals. The information helps management de- people throughout the organization view this
cide where to allocate resources. commitment as a badge of honor.
Persuading employees to complete HRAs is Fun. Never forget the pleasure principle in
a challenge, of course, for reasons ranging wellness initiatives. For example, Healthwise’s
The Pillars of an Effective Workplace Wellness Program
Strategically integrated wellness programs have six strong pillars that simultaneously support their success, regardless of the size of the organi-
zation. Construct them well, and your institution could see the kinds of big returns that the 10 companies in our sample have garnered.
1. Multilevel Leadership 4. Accessibility Outcomes
Creating a culture of health takes passionate, Aim to make low- or no-cost services a prior- Lower costs
persistent, and persuasive leadership at all ity. True on-site integration is essential be- The savings on health care costs alone make
levels—from the C-suite to middle managers cause convenience matters. for an impressive ROI.
to the people who have “wellness” in their Greater productivity
job descriptions. 5. Partnerships Participants in wellness programs are absent
Active, ongoing collaboration with internal less often and perform better at work than
2. Alignment and external partners, including vendors, can their nonparticipant counterparts.
A wellness program should be a natural ex- provide a program with some of its essential Higher morale
tension of a firm’s identity and aspirations. components and many of its desirable en- Employee pride, trust, and commitment in-
Don’t forget that a cultural shift takes time. hancements. crease, contributing to a vigorous organiza-
tion.
3. Scope, Relevance, and Quality 6. Communications
Wellness programs must be comprehensive, Wellness is not just a mission—it’s a mes-
engaging, and just plain excellent. Other- sage. How you deliver it can make all the dif-
wise, employees won’t participate. ference. Sensitivity, creativity, and media di-
versity are the cornerstones.
harvard business review • december 2010 page 5
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2009 Wellness Day—with the theme Joy, Play, for their primary care. In the words of Gale Ad-
Spirit—featured square dancing. Lowe’s spon- cock, the director of corporate health services,
sors Step It Up, a 10-week walking challenge in “Everyone will come for free and good; no one
which employees are given a pedometer and a will come for free and lousy.”
step log. The first year’s campaign pitted em-
ployees against senior management. And Pillar 4: Accessibility
SAS’s recreation center features a large swim- Our sample companies make low- or no-cost
ming pool, where director Jack Poll says peo- services a priority, and they know that conve-
ple can do anything that they do on land, in- nience matters. On the SAS main campus, 70%
cluding play basketball, lacrosse, and Ultimate of employees use the recreation center at least
Frisbee. It’s a gymnasium on water. twice a week. Director Jack Poll’s explanation:
High standards. Health-related services are, “Our high participation rates are because,
by nature, personal. Employees who perceive when we opened, we thought of all the rea-
them as substandard won’t use them. Commu- sons people wouldn’t use the facility and we
nication services provider Comporium, for ex- worked to eliminate every one of them.” The
ample, has an on-site health and wellness cen- center is open before and after work and on
ter staffed by an independent medical practice weekends, and the staff develops a variety of
including nurse-practitioners (NPs), with a fresh, engaging programs.
physician available as needed. It offers useful True on-site integration. On-site fitness cen-
services such as hypertension management ters are sometimes criticized for attracting
and treatment for strep throat and sinus infec- people who would exercise anyway. But em-
tions. Initially, the program faltered because ployees at companies who have them love
quality was not perceived as high. But the them, and employees at other companies
company turned that around, and now the ex- want them. As one Healthwise employee put
perienced NPs enjoy a loyal following of em- it, “You see coworkers working out every day.
ployees, spouses, and eligible retirees. Pro- That makes me realize I can do it, too.” And
gram participation exceeds Comporium’s 2010 Chevron conducts daily “stretch breaks”
goal. within certain units at set times. In Houston,
At SAS’s Cary, North Carolina, campus, 90% for example, professional trainers go to the
of employees used the on-site health services trading floor each day at 2:30 for a 10-minute
in 2009, and 73% currently choose the center stretch series.
The Study
To learn how companies can support their employees’ well-being in a way that makes good business sense, we conducted field visits with 10 or-
ganizations that have financially sound workplace wellness programs.
Biltmore—hospitality and tourism During our visits to this diverse array of We tailored our questions to the respon-
companies, we conducted interviews, lasting dents. Senior executives, for example, dis-
Chevron—energy
30 to 60 minutes, with senior executives (in- cussed lessons they had learned, what they
Comporium—communications cluding the CEO and CFO in most cases); well- would do differently, the business case for
ness managers and staff; and managers of re- wellness, and their vision for the future. We
Healthwise—health information publishing
lated functions such as HR, occupational asked middle managers about the on-the-
H-E-B—grocery retail health, employee assistance services, on-site ground management advantages and chal-
medical clinics, fitness centers, safety, and lenges of the program. Employee participants
Johnson & Johnson—health care products
food service. We also conducted focus group spoke about what they considered to be the
manufacturing
conversations, lasting 60 to 90 minutes, with most successful parts of the program, how it
Lowe’s—home-improvement retail middle managers, employees who actively could be improved, and why they thought
used the programs, and employees who chose nonparticipants had opted out. We directly
MD Anderson Cancer Center—health care
not to participate in the programs. In all, asked nonparticipants why they didn’t use the
Nelnet—education planning and finance about 300 people shared their perspectives. program, whether they were considering
using it in the future, and what might change
SAS Institute—software
their minds.
harvard business review • december 2010 page 6
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Biltmore’s two-day health fairs twice a year Going mobile. Organizations increasingly
focus on physical, financial, and spiritual well- use online resources to deliver wellness mes-
ness. A wide variety of screenings are offered, sages and to let individuals input information
including bone scans, cholesterol, blood sugar, such as HRA data and activity reports. Compa-
lung capacity, and hearing. Women can make nies can also make wellness websites available
appointments for mammograms. Chiroprac- on smartphones to increase portability. For
tors are available. The local fire department decentralized companies such as Lowe’s and
demonstrates how to install a smoke detector, J&J, online access is critical, although high-
and the police conduct sessions on home safety tech tools must be complemented by high-
and give children a chance to be fingerprinted touch programs that unite individuals in a cul-
for safety. Yoga instructors, chaplains, and ture of health.
many others lead seminars. Local bank repre-
sentatives provide private consultations. Ven- Pillar 5: Partnerships
dors for health and dental insurance and 401K Internal partnerships help wellness programs
plans are available. gain credibility. At Biltmore, for example, well-
Employees typically consume one or several ness professionals partner with the company’s
meals plus snacks during work hours. Health- finance division to vet the cost-effectiveness of
ful food at work has to be tasty, convenient, various programs. External partnerships with
and affordable. Chevron’s food service vendor specialized vendors enable wellness staffs to
has a “stealth health” philosophy: It uses qual- benefit from vendor competencies and infra-
ity ingredients and few highly processed foods structure without extra internal investment.
to offer menu items that delight rather than re- Lowe’s has contracted with a partner to drive
quire sacrifice. Instead of seeing a daily custom-built laboratory buses to stores, distri-
“healthy entrée,” employees choose from an bution centers, and corporate offices so that
array of appetizing healthful options, such as employees can conveniently receive biometric
meatloaf made with whole grains and low-so- health screenings and complete their HRAs in
dium soups made from scratch. private kiosks.
A Dashboard for Workplace Wellness Programs
Companies in our sample of 10 adopted well- Employee Metrics Organizational Metrics
ness programs because, as Biltmore execu- Employee participation Health care
tive VP Steve Miller said, “It’s the right thing Utilization—the total number of employees Medical care and pharmaceutical costs
to do for our people.” Managers also have a involved in specific program activities and utilization (from claims analysis)
responsibility to invest resources wisely, and Penetration—the percentage of employees Disability costs
all the companies in our study emphasized who have participated in at least one wellness Workers’ compensation costs
the importance of measuring a wellness pro- activity Safety
gram’s success. Depth—the percentage breakdown of em- Safety incident rates by category or type
By capturing key metrics, a wellness dash- ployees who are light or heavy users of well- Lost and modified work days related to
board helps to connect investments in a pro- ness activities safety incidents
gram with short- and long-term results. So- Sustainability—the number of employees Productivity
phisticated companies set metrics-related who continue to engage in a specific risk-re- Absenteeism
goals and examine trends closely, just as they ducing behavior Presenteeism
do for other facets of the business. Satisfaction with the program’s scope, rele- Organizational culture
Our example dashboard (below) is based on vance, quality, and accessibility (from survey Trust in management (from anonymous
our work in the wellness field. This rubric of data) survey data)
the most useful metrics incorporates (1) em- Health-risk status identifying the percent- Voluntary turnover
ployee measures of participation, satisfaction, ages of employees at high, moderate, or low Willingness to recommend the firm as an
and well-being; and (2) organizational mea- health risk (from HRAs) employer
sures of financial, productivity, and cultural
outcomes. Items are typically measured
monthly, quarterly, or yearly, depending on
the metric, and are tracked over time.
harvard business review • december 2010 page 7
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The smallest companies in our study have de- and personal discipline can change others
veloped comprehensive wellness programs in such as smoking, physical inactivity, weight
part by leveraging the resources of vendor part- gain, and alcohol use—and, by extension, hy-
ners. Comporium worked with the YMCA and a pertension, high cholesterol, and even depres-
local medical practice to design a “metabolic sion. The results are worth the effort.
makeover” program for willing at-risk employ- Lower costs. H-E-B’s internal analyses show
ees. Described by one participant as “pure tor- that annual health care claims are about
ture” but “a great thing,” it is a low-investment $1,500 higher among nonparticipants in its
way for the company, which has just over 1,000 workplace wellness program than among par-
employees, to enhance its wellness program. ticipants with a high-risk health status. The
company estimates that moving 10% of its em-
Pillar 6: Communications ployees from high- and medium-risk to low-
Wellness communications must overcome in- risk status yields an ROI of 6 to 1.
dividual apathy, the sensitivity of personal For every dollar SAS spent to operate its on-
health issues, and the geographic, demo- site health care center in 2009, it generated
graphic, and cultural heterogeneity of employ- $1.41 in health plan savings, for a total of $6.6
ees. The range and complexity of wellness ser- million in 2009 alone. SAS’s team-based deliv-
vices also can pose challenges. ery of health care is less expensive than exter-
Our sample companies have honed effective nal care. Not included in the $6.6 million fig-
practices over time. For one, they tailor their ure is the benefit of employees missing an
messages to fit the intended audience. H-E-B’s estimated average of two fewer hours per visit
culture, for example, is highly competitive, so by receiving on-campus care. As one manager
the company created internally public well- noted, “I used to have to take a half-day leave
57% of people with ness scorecards for geographic and other com- for an appointment. Now I’m in and out with-
pany units. Intranet videos featuring employ- out missing a beat.”
high health risk reached ees’ health-success stories are especially Greater productivity. Illness-related absen-
popular at H-E-B, which recognizes that not all teeism is an obvious factor in productivity.
low-risk status by employees read a lot. Less obvious but probably more significant is
completing a worksite Media diversity also helps. Nelnet, for exam- presenteeism—when people come to work but
ple, includes information about wellness in its underperform because of illness or stress. Re-
cardiac rehabilitation regular corporate e-mail on Wednesdays, fea- search consistently shows that the costs to em-
and exercise program. tures health-related messages on its intranet ployers from health-related lost productivity
portal, advertises specific wellness benefits, dwarf those of health insurance.
posts flyers about health in elevators and stair- A 2009 study by Dr. Ronald Loeppke and
wells, and distributes wellness stickers and colleagues of absenteeism and presenteeism
magnets. At health screening time, employees among 50,000 workers at 10 employers
are greeted with an attention-getting “desk showed that lost productivity costs are 2.3
drop” such as a piece of fruit. times higher than medical and pharmacy costs.
Wellness “clues” can be embedded through- In a seminal Dow Chemical study from 2002,
out the workplace. According to Dr. Martin of the average annual health costs for a Dow
Gabica, the chief medical officer at Healthwise, employee an estimated $6,721 were attribut-
“Wellness is a viral thing. When I meet with a able to presenteeism, $2,278 to direct health
new employee, I say, ‘Let’s go for a walking care, and $661 to absenteeism. A variety of
meeting.’” MD Anderson provides bicycle racks studies confirm the health conditions that con-
in parking garages with showers nearby, and it tribute most to lost productivity: depression,
places elliptical trainers in work areas through- anxiety, migraines, respiratory illnesses, arthri-
out its campus to encourage five-minute stress tis, diabetes, and back and neck pain. Employ-
breaks. At Lowe’s headquarters, an arresting ees with multiple chronic health conditions
spiral staircase in the lobby makes climbing the are especially vulnerable to productivity loss.
stairs more appealing than riding the elevator. Higher morale. Most analyses of workplace
wellness programs focus on hard-dollar returns:
The Fruits of Workplace Wellness money invested versus money saved. Often over-
Although some health risk factors, such as he- looked is the potential to strengthen an organi-
redity, cannot be modified, focused education zation’s culture and to build employee pride,
harvard business review • december 2010 page 8
This article is made available to you with compliments of Leonard Berry. Further posting, copying or distributing is
copyright infringement.What’s the Hard Return on Employee Wellness Programs?
trust, and commitment. The inherent nature of time for companies to play offense rather than
workplace wellness—a partnership between defense. A verifiable payback isn’t certain, and
employee and employer—requires trust. Be- the journey can be arduous. But what is the
cause personal health is such an intimate issue, alternative?
investment in wellness can, when executed ap-
propriately, create deep bonds. Reprint R1012J
To order, call 800-988-0886 or 617-783-7500
Health care is a monumental issue for employ- or go to www.hbr.org
ers, and too much is at stake to be reactive. It’s
harvard business review • december 2010 page 9
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