Corporate wellness programs have gained popularity as employers seek ways to cut healthcare costs. But this is the first study to measure not only health savings, but productivity gains.
Can corporate wellness programs do more than lower healthcare costs? Yes, according to a new study that found workers so appreciated a voluntary program that it raised productivity by a day a month. Productivity increased even among some workers whose overall health didn't change.
The study, led by Timothy Gubler, PhD, an assistant professor of management at the School of Business, University of California, Riverside, looked at what happened when workers at industrial laundry plants took part in a free, voluntary wellness program. About 85% of the staff at 4 plants signed up. The laundry company owned a fifth plant that did not take part because it was in a different health plan, but provided a control group.
Employees who took part received a free wellness screening, which showed about about two-thirds of the staff had medical conditions. In about 20% of the cases, the nurse who gave the workers their biometric screening was so alarmed by the results that she got permission to foward them to a family doctor. If the worker lacked a doctor, she made a referral.
The study used a panel of doctors to categorize workers as sick or healthy, and whether their health improved. The laundry company had systems of timing workers for specific tasks like pressing shirts, so productivity was easy to score. Workers’ health and productivity were measured over a 3-year period. The study found:
Gubler said the results were consistent with 2 factors: increased motivation that arose from greater job satisfaction and gratitude among those who learned of an undiagnosed illness; and greater capabilities among those whose physical and mental health improved. Workers who reported changes in their diet and exercise habits had the biggest productivity gains.
While other studies have shown a relationship between employee wellbeing and performance, Gubler said this is the first study to show a direct “causal link” for productivity gains through wellness programs, alongside employee health improvements.
“By showing concern for workers, organizations can strengthen employees' loyalty and commitment to the company,” Gubler said in a statement. "When workers discover unknown health problems through the program they may feel increased gratitude toward their employer and reciprocate that by increasing their efforts. Additionally, when programs help employees make healthy choices this can positively impact their wellness, mood, energy, and ultimately increase their productivity through increased capability."
Corporate wellness programs have gained popularity as employers seek ways to lower healthcare spending. About 90% of firms have some type of program: some offer wellness as part of health plan, other directly hire vendors to perform health screenings and run programs, and still others offer in-house fitness classes. A Health Affairs meta-analysis found that every $1 spent on wellness saved $3.27 in healthcare costs and $2.73 in reduced absenteeism.
But Gubler and his co-authors also calculated the value of the increased productivity. They found that the laundry company paid $120 per worker to the vendor, and that it paid each worker another $120 in lost time off the line to participate. Even accounting for those workers who left the company, the increased productivity offered of a return-on-investment of 76.3% on total program costs of $32,640.
The paper, “Doing Well by Making Well: The Impact of Corporate Wellness Programs on Employee Productivity,” is forthcoming in Management Science.