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Wellness In The Workplace
September 2007
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Workplace Wellness Challenges
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ROI Countdown to Success

As an employer or human resource professional you are well-aware of spiraling employee health care costs. In 2006 health insurance premiums rose an average of 7.7 percent according to a study by the Kaiser Family Foundation and the Health Research and Educational Trust. During the past six years, health care premiums have increased about 87 percent. In 2006 alone, premiums increased more than twice as fast as wages (3.8 percent) and overall inflation (3.5 percent).

To combat these trends, you are also well-aware that organizations of all sizes are implementing workplace wellness programs. The payback from these programs comes from not only decreased health costs but decreased absenteeism, higher productivity, happier workers, and in some cases, lower insurance premiums. These all contribute to the ROI on your employee wellness investment.

BUT, demonstrable ROI takes time, up to five years to show a true dollar value return on your initial investment, and dollar value is only one measurement of return on investment. The return will be there, but the initial focus is, or should be, on the changes that lead to that return. Rather than immediately setting out to demonstrate the impact on the bottom line, consider what must first take place.

  • In the first one to two years of a wellness program, the focus should be on employee participation and satisfaction. During this time you will implement programs your employees take part in, enjoy, and begin to value. Looking at these preliminary target issues, you will maximize the type of participation that will build critical mass and begin to change the culture of wellness in your organization.
  • In years three and four, you will be able to begin accumulating sufficient data to quantify and measure changes in costs (such as workman's comp claims and insurance claims) and absenteeism and productivity changes. It's at this point that employees begin embracing the programs in place and benefiting from the rewards. You are no longer "selling" the program to employees; you are now "providing" a valued opportunity.
  • In year five, and beyond, you will have collected several years of behavioral data which you can begin comparing with medical claims data. And now, you can begin to put a dollar value to your efforts and begin to calculate your initial ROI. By initially focusing on maximizing participation and participant satisfaction, and then behavioral change, you will find that a positive economic impact occurs as a matter of course.

Moving too fast with too much pressure on employees creates resistance. Viewing employees as "subjects" rather than valued members of your organization creates resentment. Offering a valid "wellness opportunity" builds trust and then confidence, and will over time attract those hardest to reach employees -- and then you can watch your ROI take off.

price tag

OK. You've decided to initiate a workplace wellness program. You've decided on the program. Now, it's time to get your employees excited and engaged. Almost 70 percent of wellness managers encourage participation through incentives or rewards, up from a little over 55 percent just four years ago. Incentives offered range from cruises to cash awards to benefit plan incentives to gift cards, T-shirts and pedometers. What is enough, and what is too much?

You're after initial engagement and acceptance of the program. Once employees see and feel program results, the program begins to "sell itself." It's getting over the initial inertia that requires a little something extra, and that comes in the way of incentives. But too great an incentive can be as detrimental to the program's success as too small an incentive. As an example, offering something along the lines of an around -the -world cruise completely eclipses the intent and validity of the wellness initiative and virtually assures its failure once that cruise is won. Your employees are more likely to see this as a bribe to participate rather than as a reward for sticking with the program. On the other hand, incentives such as water bottles, T-shirts or visors with the company logo might well be viewed as an afterthought, one that took little time or effort -- and that view will carry over to the program you're offering.

An estimated 68 percent of employers offer cash-based incentives or bonuses to encourage employees to participate in and follow through with a workplace wellness program. This approach results in a win-win for employees and employers, as employees benefit from improved health and employers lower their plan utilization, in the process reducing health and medical insurance costs while increasing profits. Consider this the "pay-for-performance" approach. Think of it as an incentive for wellness that's similar to the more familiar compensation plan for job performance. The average monetary incentive amount falls in the $500 per year range, with "ongoing" incentive options such as monthly gift certificates or quarterly days off from work.

And then there's the "revenue - neutral" approach. This incentive approach involves offering a premium break on the costs associated with the organization's benefit plan to wellness program participants. As an example, say company health premium costs are going up $350. But, if employees participate in the organization's wellness program, the company will waive the $350 premium increase. Research shows that with a revenue-neutral approach, you can expect participation rates in the 80 to 90 percent range. For those who don't participate, they pay for the premium hike -- and those fees cover a large part of the cost of your wellness program.

There's no doubt that incentives drive participation rates. And, there's no doubt that the right wellness program will result in, well, results. Sometimes it takes the right opportunity, sometimes a little push, sometimes a little "something extra." That's the price tag of success.
food for thought
Something to chew on. Here are a few thoughts to share with employees and co-workers. Even small changes can yield positive results.

You're always "on the run," and that's why you don't have time to run, much less walk, much less make it to the gym. You barely have time to eat, and up ahead, there's that handy drive-thru. It's fast, easy, inexpensive, ready-to-eat and convenient. Smells good. Tastes good. You don't even have to get out of the car. The fact is that almost half of our total food dollars are spent on fast food. And most of it isn't very good for us. When you eat fast food you consume more dietary fat, saturated fat, trans fat, sodium and cholesterol.

Most of us make more than 200 food and beverage choices each day, and it's easier than we think to let small things around us such as plate size, package size, people, distractions and "all you can eat menus" influence those 200 plus decisions. So, what do you do? Consider the following and sobering facts. (They may take your appetite away.)

Did you know that about 40 percent of all cancers are caused by the typical American diet, lack of physical activity and obesity -- and that cancer is mostly a preventable disease? Approximately 66 percent of U.S. adults are overweight, and of those, 34 percent are obese. Almost one-half of all Americans report having a chronic illness, and those illnesses account for 75 percent of our national spending on health care. Furthermore, almost 80 percent of all chronic disease is caused by three preventable health behaviors -- physical inactivity, poor nutrition and overeating, and smoking. Obesity is associated with 53 health conditions and has roughly the same association with chronic health conditions as 20 years of aging. It is also the leading contributor to our growing national epidemic of type 2 diabetes.

To bring some of these statistics closer to home (as you reach for that bag of M&Ms), you'll need to walk the length of a football field to burn the calories in just one, single M&M. That McDonald's Big Mac -- you'll need to walk 5 miles to burn off those calories. Romano's Macaroni Grill Spaghetti & Meatballs dinner -- at 2,270 calories, you can count on walking 22 miles. That's asking a lot since the average American only walks about 300 yards a day.

Have you had enough "food for thought" yet?

To maintain, or reach, a healthy weight, you want to aim for a BMI (body mass index) of between 18.5 and 24.9. BMIs above 25 are considered "overweight" and above 30, "obese." But here's the good news. Adults gain two hours of life expectancy for each hour of moderate physical activity. Cutting 500 calories a day (two soft drinks and a donut) will result in a weight loss of about one pound per week. Eating just 100 fewer calories a day can prevent the average American's 2-pound annual weight gain. That's less than a soda, or about three bites of a burger, or one biscuit. Now, imagine what would happen without the soda, chips or candy bar -- and a walk around the block. Remember, we're not talking about "it's nice to be thin." We're talking about "it's nice to be healthy."

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If your organization is ready to take responsibility for promoting healthy lifestyles and a healthy work environment, LoneStart is an effective, low-cost and easy-to-administer employee wellness program, which functions equally well as a stand-alone initiative or as a high-impact jump-start to existing or proposed employee wellness strategies.

Contact us today to find out how the LoneStart 21-Day Wellness Initiative will change your workplace.

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A Challenge. An Opportunity. A Solution.
The LoneStart 21-Day Wellness Initiative
phone: 512.894.3440

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LoneStart 21-Day Wellness Initiative | P.O. Box 1188 | Dripping Springs | TX | 78620