Workplace Wellness Programs Create the Ultimate Win-Win

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Beyond improving psychological and physical well-being, workplace wellness programs boost employee productivity and corporate profit margins, a new study reports. These findings are part of a collaboration by researchers at the University of California, Riverside (UCR), UCLA, and Washington University in St. Louis.

Their recent paper, “Doing Well by Making Well: The Impact of Corporate Wellness Programs on Employee Productivity," is currently available online and will be published in a forthcoming issue of the journal Management Science. The researchers believe this is the first study to show a direct causal link between a workplace wellness program to improve employee well-being and increasing employee productivity.

Traditionally, research on workplace wellness programs has focused on employer savings garnered through lower health insurance premiums and less absenteeism. For example, in 2010, a meta-analysis by researchers at Harvard University School of Public Health found that each dollar spent on wellness programs saves a company $3.27 in health care costs and $2.73 in absenteeism costs. Clearly, investing in corporate wellness programs can pay huge dividends by generating substantial savings for employers.

For their latest study, first author Timothy Gubler, Assistant Professor of management in the School of Business at UCR, and his team set out to quantify previously underestimated benefits of corporate wellness programs created through improved employee motivation and productivity. This study investigated individual productivity and medical data of 111 employees with and without wellness program participation at five Midwestern industrial laundry facilities. This data was collected over a three-year period.

The most comprehensive workplace wellness programs offer a wide range of health screenings, fitness initiatives, nutritional classes, and seminars ranging from topics such as work-life balance, stress reduction, and ways to quit smoking. For this study, the employees who voluntarily signed up for the wellness program (roughly 85 percent of the staff) were offered free access to a basic physical exam that included an overall health survey, blood work, and hypertension testing.

A few weeks after each individual’s health exam, participants attended an educational seminar during which a registered nurse presented every participant with a personalized health packet detailing his or her current health status and providing specific recommendations for ways to improve their health.

Notably, about two-thirds of employees had some type of health condition at the time of the screening. Additionally, only four of the five plants were offered the voluntary wellness program based on differences between coverage plans of health insurance providers. Having one entire laundry facility unable to participate automatically created a control group for the study.

After linking worker productivity data with medical records, the authors found that participation in the wellness program increased worker productivity for both sick and healthy employees by more than 5 percent. This is the equivalent of generating one additional workday's worth of productivity per month for each employee.

More significantly, any employee who saw relative improvements to his or her overall health displayed increased productivity of about 10 percent. Employees who began to exercise more and eat a healthier diet saw the biggest uptick in their productivity, according to the researchers.

Although it’s difficult for Gubler et al. to pinpoint the exact mechanisms that are driving these improvements, the researchers speculate that there are two primary factors. First, a sense of gratitude was observed in employees who discovered an undiagnosed illness after medical screening and received treatment. This appeared to create an upward spiral marked by higher motivation, morale, and job satisfaction. Second, feeling better psychologically and physically improved workplace energy levels, stamina, and general capabilities.

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In a statement, Timothy Gubler summed up his team's findings: "Our research suggests that corporate wellness plans can boost employee satisfaction by offering a tangible benefit that empowers them to take care of their health in a way that's integrated into their busy lives. The result is healthier and happier employees who are not only less expensive and less absent, but also more productive."

These findings on workplace wellness programs add to a growing body of evidence on the relationship between happy and healthy employees and overall job performance. The latest research also suggests that it's possible to create a win-win situation through socially responsible health care policies and programs that improve both workers’ wellness and their economic value to the company's bottom line. From a strictly profit-driven perspective, providing comprehensive corporate wellness programs for employees results in higher productivity and better return on investment for shareholders.