$250 million is a big number. It’s even bigger when you consider that it’s the savings Johnson & Johnson reaped as a result of the company’s investment in employee wellness. While the company has had a very tough year with numerous and costly product recalls, government investigations and quality control issues – all of which have damaged the company’s reputation – innovative wellness programs for employees offer at least one bright spot under the dark clouds.
Johnson & Johnson reports a $2.71 savings for every $1 spent on employee wellness over the past decade (Harvard Business Review, Dec. 2010). That’s what you call a return-on-investment.
But it doesn’t stop there: Unilever reported a return of $5.44 on every $1.55 spent on employee wellness. In just two examples, we see a 2:1 and a 5:1 return.
Sustainability consultant, thinker and writer Elaine Cohen recently investigated not only the savings potential of employee wellness programs, but, perhaps more importantly, the results.
In doing so, she identifies four key imperatives
1. It’s Not Just About Health Insurance. A Harvard Business Review study shows that variety engenders accessibility at multiply entry points for employees at different stages of the health spectrum. Employers in that study offered webinars, lectures and workshops, stress-related coaching, employee crisis support, no-smoking incentives, weight loss programs, exercise training, cardiac rehabilitation, and more.
2. Take a Systemic Approach. A Health Risk Assessment (HRA) encourages employees to undergo a range of health-related tests, then, act on results. Nelnet reports a 90 percent take up in HRAs. Johnson & Johnson offers an incentive on medical insurance for participation. Post-HRA, an employee may manage his or her wellness program and take advantage of company programs to reach health goals.
3. Embrace a Holistic Strategy. “Health insurance and HRAs are still not the whole story,” Cohen explains. “To reap the full benefits, a company must take a strategic approach, probably as part of its overall sustainability program, with a multi-year-plan and multi-level commitment.”
4. Nurture Your Company’s Best Assets. What Cohen describes here really resonates with me: “Yes, employee wellness is about the money. It’s [also] about nurturing and investing in one of the company’s most important assets and ensuring its highest possible productivity.”
Our employees, our talent, are our most precious assets – they directly influence how a business succeeds or fails, grows or recedes, shines or fades.
Let’s make a commitment to them today to help them, and business, succeed for the long-term.
Jeffrey, this really resonates with me as well. I know from some work I did with Dealer.com that they have taken this lesson to heart in how they approach employee wellness; I hope showing that this concept scales down and is not only the purview of large firms.
Investments in employee wellness strengthen our society as well as our economy. I know, as an employee, I always feel more invested in a company that invests in me. Aside from the quantifiable returns of healthier employees and higher productivity, there is the more elusive impact on a company’s culture, the happiness of employees, and the manifestations of those things, like churn rate and dedication. A happy company is likely to be better at innovating, produce a better community, and build better relationships not only with employees but with prospective clients or new hires, alumni, and current clients/customers.
In terms of building sustainable business models, it is these voluntary and sensible steps that I think are part of the not-so-magical equation.
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