For many employers, certain benefits have long been part of the overall compensation package. In particular, health and dental packages probably come to mind for most readers. In recent years, many employers have also started embracing wellness incentives, where employees are given various enticements for participating in company wellness programs. According to Employee Benefit News, 70% of employers are investing in wellness programs; however, 64% of employees undervalue the financial benefits of those programs.
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That may be understandable from a psychological standpoint. The financial benefits to employees from participating in wellness programs are distant—improved overall health, fewer doctor visits, less money spent on copays and deductibles—relative to the immediate burdens—going to the gym a certain number of times per month, participating in a company-hosted yoga class over lunch, etc. Employers tend to have a longer-term viewpoint on such matters, however. Healthcare expenses can be a significant expenditure for employers, and because they are already formally tracking expenditures as part of regular business accounting, they have a clearer picture of the costs of health care.
And it’s not just the direct costs of health care that have employers trying to encourage healthy behavior in their workforce. Having employees miss work due to illness can be a real drain on productivity and an unplanned interruption on ongoing efforts. Additionally, healthy employees tend to be happy employees. Regular exercise helps employees stay motivated, energized, and positive.
The solution many employers have turned to is more immediate incentives for employees to participate in wellness programs. According to WellSteps, “Unless motivated, most employees will have a hard time beginning and maintaining a healthy lifestyle. Behavior change is one of the most difficult things that we do as humans. Every successful (well-being) program has implemented some type of incentive program to help employees get started with behavior change.”
So what incentives are the most effective? The incentives must be based on an input and an output. The Bailey Group notes that wellness program incentives can be based on participation or on results—the input. For example, a prework cardio class could reward employees based on the number of classes they attend per month or how much weight they manage to lose over a period of time.
And the output? According to Employee Benefit News, “The most appealing incentives to employees for wellness programs are health insurance premium reductions (77%), grocery vouchers (64%), and health savings accounts (62%).”
Be aware that there are strict rules that govern the amounts of incentives and the circumstances under which they are awarded. Pay particular attention to the differences between participation-based programs (attend classes, have a health evaluation) and outcome-based programs (lose weight, lower blood pressure).
Wellness programs are an increasingly important part of company strategies aimed at boosting productivity, minimizing employee absences, and reducing healthcare expenditures. Yet, sometimes employees need a little push to get motivated to participate. Incentives help drive home the cost-benefit analysis for employees by making the benefits more immediate.