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Why Wellness Works

According to the U.S. Small Business Administration, U.S. small business employed 56.8 million people, or 48% of the private workforce in 2013. For this reason, effective workplace wellness programs, policies and environments have the potential to significantly benefit a large amount of people through employers, employees, their families, and communities. For small business owners who often work day-in and day-out with the same people for years, employees feel like family. With the implementation of wellness plans, they not only see bottom-line benefits for their businesses like productivity gains, but more importantly this benefits the health of their employees, something that produces gains on multiple levels for the business.

In fact, research has found that participants in workplace wellness programs benefit from 25% lower medical costs and absenteeism rates than those who do not participate in wellness programs. And Small Business Majority’s research found that small business owners who do offer wellness programs overwhelmingly see them as beneficial to their business. Of those that offer programs, 88% of businesses with 2-14 employees and 98% of businesses with 15-99 employees believe they are beneficial to their companies.[i] They also provided high marks across several categories of effectiveness, including that they are effective in improving worker health overall, worth the investment, effective in improving worker productivity, effective in reducing worker absenteeism and effective in reducing their business’ healthcare costs.

Positive effects of wellness programs

Source: Small Business Attitudes on Wellness Programs, Small Business Majority, 21 July, 2014

In addition, a large number of businesses with wellness programs report they are beneficial to their employees. Ninety-seven percent of small businesses with 2-14 employees and 89% of small businesses with 15-99 employees report their wellness programs are good for their employees.

Additional surveys and research studies have found the positive impacts of workplace wellness programs in a variety of areas.

Physical Activity

  • Studies show physically active employees are absent less frequently than their inactive counterparts, and employees who get at least 75 minutes of vigorous physical activity per week miss on average 4.1 fewer days of work per year.

Healthy Nutrition and Weight Management

  • Overweight and obese workers are absent more frequently, are less productive at work, more likely to require short-term disability benefits and more likely to take disability pension.
  • Specifically, studies have estimated the costs of reduced productivity from obese workers to be between $54 and $506 per worker per year and the average annual disability costs (including short-term disability and disability pension insurance) to be $55 higher for the average overweight employee and $349 higher for the average obese worker, relative to normal weight employees.

Tobacco Cessation

  • In the United States, smoking accounts for approximately 7-9% of total annual healthcare spending.
  • For individual employers, smokers cost $1,623 per smoker per year in excess medical expenditures (not including lost productivity), whereas comprehensive tobacco cessation benefit programs cost an average of merely $1.20 to $4.80 per person per year.
  • Smokers have higher health and life insurance premiums and claims, greater absenteeism and lower productivity rates.

Stress Management

  • Employees who are stressed are more likely to miss work, quit, be involved in an accident and perform worse than their less stressed peers.
  • Eighty percent of workers reported feeling stress on the job, 40% reported feeling very or extremely stressed and 25% viewed their jobs as the number one stressor in their lives.
  • High stress levels lead to an estimated one million workers absent every day.
  • Past research has shown that healthcare expenditures are nearly 50% greater for employees reporting high levels of stress in comparison to their less stressed peers.

High Blood Glucose Management

  • The total cost of diabetes care and management comes to approximately $245 billion each year.  Of that, more than $60 billion each year is attributed to factors that directly hurt businesses: increased absenteeism ($5 billion), reduced productivity ($20.8 billion), inability to work caused by diabetes-related disability ($21.6 billion) and early mortality ($18.5 billion).[ii]

Alcohol Management

  • Alcohol abuse directly impacts an estimated 15% of the U.S. workforce, a total of 19.2 million workers each day.
  • Alcohol misuse leads to absenteeism, tardiness, high rates of turnover, injuries and violence.
  • Employees who abuse alcohol are three and a half times more likely to be involved in a workplace accident than coworkers, and approximately 40% of industrial fatalities and injuries can be linked to alcohol misuse.
  • The total cost of these alcohol-related productivity losses came to $129 billion in 2002 and $161 billion in 2006.

For most employers, the most expensive healthcare claims come from so-called catastrophic events, such as a heart attack or stroke that occur to a minority of their employees. Yet, they may not always tally the aggregate costs due to chronic conditions such as diabetes. The fact is, however, that catastrophic events account for only 20% of an employer’s health costs. By contrast, the Coalition on Catastrophic and Chronic HealthCare Costs estimates that 70-80% of overall healthcare costs is attributable to chronic health conditions, most notably, cardiovascular disease, diabetes and asthma.[iii]

 

[i] Small Business Majority (July 2014). Small Business Attitudes on Wellness Programs. http://www.smallbusinessmajority.org/our-research/healthcare/small-busin...

[ii] American Diabetes Association (March 2013). The Cost of Diabetes. http://www.diabetes.org/advocacy/news-events/cost-of-diabetes.html

[iii] National Association of Manufacturers (February 2005). The Coalition on Catastrophic and Chronic Health Care Costs (HC5). www.nam.org.