Business Case

In Texas, about two-thirds of adults are overweight or obese, one in ten has diabetes, and one-third has high blood pressure. The risk of developing any or all of these conditions is directly related to the amount of physical activity, healthy eating and tobacco use a person takes part in.

Medical expenses for an obese employee in the US are estimated to be 42 percent higher than for a person with a healthy weight. Nationally, each employee who smokes costs his/her employer an extra $3,383 per year, including $1,760 in lost productivity and $1,623 in additional medical expenses.

Additionally, employee health impacts more than healthcare costs, including:

  • Productivity
  • Turnover
  • Worksite accidents
  • Workers Comp claims
  • Absenteeism
  • Presenteeism
  • Weakened performance due to health-related issues (physical, mental, or emotional health)

Cost Savings

Substantial evidence exists demonstrating that employee wellness programs can achieve cost savings and produce major returns on investment. This evidence comes from case studies of individual programs, in addition to a series of systematic reviews of the literature that employed strict conditions for inclusion and gave more credibility to studies with the strongest methods. Estimated Return on investments (ROI) across these studies ranged from 1.49:1 to 4.7:1, with most collecting around a $3 return for every $1 invested in the program over a multi-year period.

Increased productivity, reduced absenteeism, and lower turnover can generally be seen within the first year of a program's implementation. Measurable health plan savings may be seen in as little as two years if effective wellness initiatives are implemented and if employee participation is significant. Full savings may take five years or longer.

Reducing health risk factors through prevention efforts is a proven method. More than 80% of small employers and almost all large employers offer some form of health promotion or wellness program. However, success depends on the wellness program's quality and strategy in terms of completeness, encouragement structure, and focus on worksite policies and environment.

Please review the Create a Wellness Program section to learn more about the key components of an effective wellness program.

Or read on the How to Establish and Design a Wellness Program on the Society for Human Resource Management website.