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