STRATEGY
Creating a Healthier Workforce
Workplace Wellness Programmes are Racking Up Millions In Cost — but Are They Returning on the Investment?
Free gym memberships. Smoking cessation rewards. MMA classes on Tuesday and Thursday nights.
These are some of the benefits that companies are offering to employees as part of their employee wellness initiatives. Globally, the employee wellness movement has been spreading, from Accenture to Credit Suisse and the overall market size of it has been increasing steadily every year: it is expected to reach USD$90.6bn by 2026. Companies are spending more money on employee wellness programs, knowing that they generate a lot of positive business results — even though there is limited evidence showing that it does.
Yet, just in the States alone, the workplace wellness industry has drawn in $8bn in revenue in 2016.
Damon Jones, an Assoc. Professor at the University of Chicago argued that most studies reviewing the positive effects of employee wellness may suffer from “selection bias”. “…Programs like these may simply attract employees who are already healthy and have lower health care costs,” Jones added. “Results from [controlled] studies may be due to differences in who participates, not differences caused by participating in the program.”
Yet, there was also literature that contrasted that view: in 2010, a study showed that workplace wellness programs can generate savings, referring to reduced absenteeism and medical costs. The conclusion was that the adoption of such programs could “prove beneficial for budgets and productivity as well as health outcomes”.
With a growing body of research on both sides of the argument, it is clear that the answer to “Are employee wellness programs beneficial?” is way more than a binary answer of yes or no.
Workplace Wellness Ain’t That Great
April 16 this year, a study was published in The Journal of the American Medical Association (JAMA), raising questions about the effectiveness of many employee wellness benefits that employers give in the States.
Zirui Song and Katherine Baicker, from Harvard Medical School and the University of Chicago Harris School respectively, conducted a randomized trial involved 32 974 employees at a large US warehouse retail company. For 18 months, they tracked the effects of these workplace wellness programs and the size of those said effects, from self-reported behaviors to health and economic outcomes.
Song and Baicker focused on 8 modules in the program, with key elements such as nutrition, physical activity, stress reduction, and prevention. Modest incentives were also given to encourage participation, such as gift cards.
Out of the 168 worksites, 20 of them were randomly selected to receive wellness programs, with “business as usual” at the others.
After the 18 months, the verdict is out: a workplace wellness program resulted in significantly greater rates of some “positive self-reported health behaviors” but no significant differences in clinical measures of health, health care spending and employment outcomes.
This means that people started adopting healthier behaviors but that doesn’t mean they were getting healthier or spending less on healthcare.
Objectively, the study is still imperfect: 18 months may be simply too short and there might be long-term benefits for the company if the study was extended further — in that same vein, it is also clear that typically, there should be no immediate benefits. “If companies are looking for an immediate ROI, this recent research might give them pause,” said Song in an interview at Harvard Medical School.
“When you randomize participation, the results appear to be more modest compared to prior studies,” added Song, referring to previous studies proving the plethora of positive effects in implementing wellness programs; most studies suffered from methodological bias and in a meta-analysis of Song’s and Baicker’s previous study in 2010, it is noted that it was “limited by the lack of a robust control group”, hence the estimates might be biased.
It is clear: the results that workplace wellness programs are giving may not be as great as they seem to be.
The Factors of Wellness
Fancy perks like yoga classes and free gym memberships are not the only things that employers can offer. Most employers fall short because of other bigger, overarching problems that they are missing out — most of them are factors that do not come to mind when we think ‘wellness’.
The wellness industry has long perpetuated the definition of wellness, but there is more to a fit, Nike-donning employee in employee wellness. Most employers stop at physical wellness; employee wellness is often treated as if it is an extension of the company.
Physical Wellness
Physical wellness encompasses healthy activities and behaviors, as well as good ergonomics. In its literal definition, it means self-care for our body. Yoga classes, gym memberships, healthy food options in the office fall under physical wellness.
Emotional Wellness
These are factors that influence emotional wellness in the workplace, such as mood, stress, security, and connection to outdoors. This focuses a lot on culture and the way the company operates. It is an inner factor.
Environmental Wellness
This is the workplace environment, focusing on where the employee is working within the office. This can include factors such as ambiance, humidity, temperature, air quality and a glare-free view outside.
In their research, Future Workplace and View conducted a study on 1601 professionals to find out what wellbeing factors do they focus on. Here’s the conclusion: employers need to go back to basics and then let employees customize their workplace environment.
Pointless Office Perks Waste Money
A good rule of thumb is to never assume: you need to ask your employees what they want rather than shoving a wellness program down their throats. Doing so allows you to figure what perk would you need to put more emphasis on. For instance, you may find out that a minority of employees will take advantage of an onsite gym, but changing the air-conditioner makes more impact on the entire company.
According to Future Workplace’s and View’s study, they discovered that fresh, allergen-free air would improve 58% of their respondents. Coming second was having comfortable light and the last being water quality. Typical perks like fitness facilities were ranked very low with only 16% of respondents being receptive to it.
Hence, rather than placing ‘cool’ employee perks that everyone is doing (e.g. beer on tap, foosball stations, gaming areas), it is best to first respond to the need for employee wellness by asking questions.
Focus on HPB and Indoor Environments
High-performance buildings (HPB) are peculiar buildings: their occupants have great experiences there, they can utilize resources efficiently and they make minimal impact on the environment.
In a study by Stok, they analyzed the financial impact of being situated in an HPB. Elements such as thermal comfort and air quality were instrumental in driving an increase in employee productivity, which could potentially save hundreds of thousands to millions for big companies.
In Future Workplace and View’s study, it is found that clean, quality air is one of the biggest culprits to low productivity. Half of the respondents said “poor air quality makes them get sleepier throughout their workday” and only a quarter of them said that the “air quality in their office is optimal for them to do their best work”.
“It’s clear that buildings accommodating essential human needs such as good quality air, access to natural light and comfortable temperatures lead to healthier and more productive employees,” said Dr. Brandon Tinianov, chair of the U.S. Green Building Advisory Council and vice president of industry strategy at View.
Organizations have the power to make improvements in these areas: at Hewlett Packard Enterprise, they built microphones in the ceilings that help to manage the noise level in an open floor plan.
Apart from the building itself, companies can also redesign their entire floor plan to create deliberate segregation based on work and employee preference. For instance, Cisco created a floor plan without assigned seating. It included neighborhoods of workspaces, designed specifically for employees collaborating in person, remotely or those who choose to work alone.
Personalization
At Regeneron Pharmaceuticals, employees can control the amount of natural light coming in from the glass of their office windows with a mobile phone app.
Wellness is personal — much of our life outside of work is personalized as well, from our Netflix recommendations to the music we want to hear. We adjust the room temperature using a remote control. We reduce the brightness on our laptop screens, just like Regeneron’s smart window app.
Personalization is imperative to creating a great work environment. In the previous study by Future Workplace and View, it is found that employees want to control certain physical elements such as light, temperature and noise levels. 48% of respondents want to be able to “personalize the temperate” in their workspace with an app.
Companies need to adopt a holistic view of workplace wellness: rather than over-extending and wasting resources on pointless perks, it is better to double down on something that works. Most of the companies offer perks that have novelty effect: these perks lose their effectiveness over time, and employees will adapt to it.
Rather, the answer to this question is very simple. Employers need to ask employees what they want and start shaping their plans around their desires. Are they looking for personalized work environments? Are they complaining that the office is too noisy? Are they saying that it is usually difficult to collaborate in the office?
Employers need to start shifting the conversation back to the employees — after all, workplace wellness is more than just a simple gym membership.