Do Wellness Programs pay off?

Astrid Marie Richardsen

Wellness programs in organizations seem to improve employee health and productivity and may contribute to the organization’s bottom line.

Workplace wellness programs are popular and widespread, especially in the United States. European countries lag behind in both providing programs and in evaluating such programs.

As the majority of Americans get their health insurance coverage through an employment-based plan, companies are naturally looking for ways to reduce health care costs, thus limiting productivity losses and ultimately increasing bottom line results.

A workplace wellness program has been defined as an organized, employer-sponsored program designed to support employees as they adopt and sustain behaviors that reduce health risks, improve quality of life, enhance personal effectiveness, and benefit the organization’s bottom line.

However, corporate wellness programs are diverse in scope, targets and objectives, and may include programs focusing on specific targets, such as smoking cessation, and physical fitness; programs with educational focus, such as health risk assessments; programs focusing on healthier on-the-job habits, such as healthy cafeteria food; as well as comprehensive programs focusing on education and health promotion for individuals, families, and the organization.

Reductions in health care costs

The most commonly cited reason why wellness programs have gained popularity is the potential for reductions in health care costs, but also concern over population health problems and the effect this has on worker productivity and consequently the organization’s bottom line.

In addition, offering such programs may improve the employers image, and help companies to appear as an employer of choice.

In turn, this will enhance the company’s ability to hire the best people, increase employee morale and job commitment, which again may result in less absenteeism and improved productivity, and ultimately less turnover.

Benefit to companies?

The question is, are these programs effective? Is it of benefit to companies to implement such programs?

The majority of studies reviewing wellness program success indicate that they are indeed worth considering. A number of studies have found that participation in wellness programs are associated with increases in productivity and substantial savings for organizations.

A review of various American programs found that employee health programs on the average demonstrated a 25% reduction in sick leave, health plan costs, and workers’ compensation; and about a 1:3 reduction in absenteeism cost relative to wellness program spending.

Despite some skepticism regarding the robustness of evidence on return of investment, wellness programs on the whole seem to improve employee health and productivity and provide considerable cost reductions for companies.

In addition, the existence of a wellness program may signal that the organization supports employees, and thus be associated with job satisfaction. Also, wellness programs may be valuable recruiting and retention tools, because they are attractive to employees valuing physical fitness. Wellness programs also reduce stress levels which in turn affect personal well-being and job satisfaction.

Best practices

What is associated with program success? What are best practices to ensure that programs reach their objectives?

First, it is important to consider the major purpose and the need for the program, as well as the potential benefits. One of the most important aspect of planning a program is identifying the right candidates for the program. Ideally a health promotion program should be able to serve a variety of employee groups – both those who are well and those with risk.

One key question is to motivate employees to participate in worksite wellness programs, as program participation is a key driver for subsequent results. Important barriers to participation in a worksite wellness program are insufficient incentives, inconvenient locations, time limitations, schedule, marketing, health beliefs, and either not being interested in the topics presented or not being interested in the program.

Sustaining high engagement and participation in wellness programs is difficult. It requires aggressive branding and communication strategies in order to promote awareness and help drive participation.

Successful wellness programs will improve employee health and well-being, which in turn may contribute to the organization’s bottom line, not only in terms of tangible (revenue growth, organizational profitability, percent market share) business results, but also intangible (employer of choice, customer loyalty, corporate reputation) business results.

These may in turn influence employee and organizational well-being, creating a positive spiral of benefits to both individuals and organizations.


This article is published in BI Leadership Magazine 2015/2016 (Link to E-Magazine).

BI Leadership Magazine is a Science Communication Magazine published by the Department of Leadership and Organizational Behaviour at BI Norwegian Business School.

Published 5. April 2016

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