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Does employee wellness save money? The business case for investing in employee health

Abril 17, 2023 |

Have you ever found yourself wondering, “Does employee wellness really save money at work?” Let’s talk about it. 

Employee wellness has become an increasingly important topic in today’s workplace, as employers recognize the benefits of promoting a healthy and engaged workforce. From reducing healthcare costs to improving productivity and morale, there are many ways that investing in employee wellbeing can help companies save money and achieve their business goals.

In this blog post, we’ll explore the business case for investing in employee wellbeing and discuss some of the ways that companies can promote a healthy and engaged workforce.

The cost of unhealthy employees

Before we dive into the benefits of promoting employee wellness, it’s important to understand the cost of unhealthy employees. When employees are sick, stressed, or disengaged, it can lead to a range of negative outcomes that can impact the bottom line.

Here are some of the ways that unhealthy employees can cost companies money:

1. Healthcare costs: When employees are sick or injured, it can lead to increased healthcare costs for both the employee and the employer. The Centers for Disease Control and Prevention (CDC), reported that US employers face an annual cost of approximately $36.4 billion due to five chronic diseases or risk factors that cause employees to miss work days. These factors include high blood pressure, diabetes, smoking, physical inactivity, and obesity.

2. Absenteeism: When employees are sick or injured, they may need to take time off work, which can lead to lost productivity and increased costs for the employer. According to the Society for Human Resource Management (SHRM), the average cost of absenteeism is $1,685 per employee per year.

3. Presenteeism: Even when employees come to work while they are sick or stressed, they may not be able to perform at their best, which can lead to reduced productivity and increased costs for the employer. A study by the Integrated Benefits Institute (IBI) indicated that presenteeism costs employers 540 million lost work days per year.

4. Turnover: When employees are unhappy or disengaged, they may be more likely to leave their job, which can lead to increased turnover costs for the employer. According to a study by the Work Institute, the cost of turnover can range from 33% to 200% of an employee’s annual salary, depending on their role and level of seniority.

The benefits of investing in employee wellness

People giving each other high fives at work

Given the high cost of unhealthy employees, it’s clear that investing in employee wellbeing can be a smart financial decision for companies. 

Here are some of the benefits of promoting employee wellbeing:

1. Reduced healthcare costs: When employees are healthy, they are less likely to need expensive medical treatments or medications, which can lead to lower healthcare costs for both the employee and the employer. A study by the American College of Occupational and Environmental Medicine (ACOEM), indicated that every dollar invested in employee wellness programs can yield up to $3.27 in healthcare cost savings.

2. Increased productivity: When employees are healthy and engaged, they are more likely to perform at their best, which can lead to increased productivity and efficiency for the employer. According to the World Economic Forum (WEF), healthy employees are up to 3.5 times more productive than their unhealthy counterparts.

3. Improved morale: When employees feel valued and supported by their employer, they are more likely to have a positive attitude and a sense of loyalty to the company. This can lead to improved morale and reduced turnover, which can save the employer money in recruitment and training costs.

4. Enhanced reputation: When companies prioritize employee wellbeing, it can enhance their reputation as a socially responsible and caring employer. This can help to attract and retain top talent, as well as improve customer loyalty and brand reputation.

Check out the top 15 employee wellness programs.

How to promote employee wellness at work

Now that we’ve discussed the benefits of investing in employee wellbeing, let’s get into how to promote wellness at work. 

One way to promote employee wellbeing and save money is through workplace wellness programs. These programs typically encourage physical and mindful activities such as exercise classes, breathing exercises, and healthy eating. According to a study by the Society for Human Resource Management, 70% of employers offer wellness programs to their employees.

While there has been some debate over the effectiveness of workplace wellness programs, several studies have shown that they can have a positive impact on employee health outcomes and reduce healthcare costs. For example, a study conducted by the Harvard Business Review found that employees who participated in a wellness program had lower healthcare costs and were absent from work less often than employees who did not participate.

Another way to promote employee wellbeing and save money is through flexible work arrangements. Flexible work arrangements, such as telecommuting and flexible schedules, can help to reduce employee stress and improve work-life balance. This can lead to increased job satisfaction, improved mental health, and reduced absenteeism and presenteeism.

In addition to the financial benefits, there are also ethical reasons for employers to invest in employee wellbeing. As an employer, it is important to recognize that your employees are human beings with physical, emotional, and mental needs. By promoting employee wellbeing, you are demonstrating that you value your employees as individuals and are committed to creating a positive work environment.

Conclusion: Does employee wellness save money?

In conclusion, investing in employee wellness can save money in several ways, including reducing healthcare costs, improving productivity, and reducing absenteeism and presenteeism. Workplace wellness programs and flexible work arrangements are just two examples of initiatives that can promote employee wellbeing and save money. 

As an employer, it is important to recognize the value of your employees’ wellbeing and take steps to support it. By doing so, you will not only save money but also create a more positive and productive work environment.

Looking for an employee wellness program? Check out this certified B Corporation.

Written by Kelly Baker, Content Marketing at atlasGO

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