How long until a company sees a return on investment when implementing a wellness program?

Q:

How long until a company sees a return on investment when implementing a wellness program?

A:

The return that employers gain from investing in a workplace wellness program and the timing of those returns can vary a great deal depending upon the health initiatives put in place. However, an employer who implements a workplace wellness program may begin to see costs savings within the first year.

In one study of employees and spouses enrolled in a six-month program, the employer realized annual health care cost savings of over $1,400 per participant during the first year of enrollment. This savings represented an ROI of $6 for every $1 invested. Employers who initiate a smoking cessation program may see results within just a few months.

Other health improvement initiates, such as disease reduction programs, may take longer to demonstrate benefits. Intangible benefits may also take time to manifest. For instance, one company saw a 10% reduction in employee turnover within four years of implementation of a wellness program. For some wellness programs, it may take up to five years for the program to become cost neutral and begin generating a return.

However, the most effective programs are more likely to generate a substantial ROI. The most effective wellness programs are those that are implemented with careful planning and patience. Programs that rely on incentives over penalties and create a culture of wellness fared best.

A recent study by Rand Corporation indicated that, on average, the disease management component of an employer’s wellness program is responsible for 86% of the health care cost savings. Disease management programs brought lowered health cost claims and a 30% reduction in hospital admissions. Other components of a workplace wellness program may result in lower monetary returns on investment but produce strong results that lead to monetary gains later on. For example, the improved morale of employees who participate in health and wellness programs may lead to better customer and co-worker interactions, greater creativity, and improved productivity.

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Written by Shauna Krahn
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Shauna Krahn is the manager of medical services at SureHire Occupational Testing, a leading expert in the occupational health and wellness testing industry. SureHire is revolutionizing the occupational testing industry through its proprietary Fitness-to-Work assessments, drug testing adulteration protocols, automated tracking systems, standardized national training and certification system, and industry leading online technologies.   Full Bio