Study: 60 Percent of Small Businesses Benefit from Wellness Programs

May 07, 2014

More than 9 in 10 small business owners believe that their employees' overall health and wellness is an important contributor to their bottom lines. Further, among small employers with fewer than 50 employees, with just two to nine employees, about 60 percent of small business owners believe that employee health and wellness programs are worth the investment. This was true even of employers with fewer than ten employees.

While the survey does not segregate by region of the US, let's face it: those of us in the Midwest and specifically this past winter in Chicagoland, find it even more challenging to get motivated to stay healthy in the sub-zero weather! I know I am much more motivated to think about fitness, exercising and looking my best when the sun is shining, it's warm outside, and I am wearing less clothes!

The number of Employers who value a health and wellness program scales up substantially for larger employers: Fully 73 percent of those reporting with 50 to 100 employees believe their employee health and wellness plans are worth the investment.

This is according to a recent survey, Workplace Wellness Programs in Small Businesses: Impacting the Bottom Line, published by the National Small Business Association.

Top Issues

The survey's authors found that stress management was by far the number one employee wellness concern, with 42 percent of respondents listing that as among their primary focuses for their employee wellness programs. Other issues mentioned were psychological wellness, weight management, drug and alcohol abuse, and smoking. Each of these was listed with between a 9 percent and 13 percent frequency.

Who offers wellness programs?

While the number of employers with formal employee wellness programs in place is still a minority, the number is increasing rapidly. 27 percent of employers with between 50 and 100 employers offered a wellness program to their workers. 20 percent of those with just 2 to 9 employees also offered plans, with younger companies significantly more likely to offer wellness plans than employers that have been in existence for more than five years.

Why do they offer them?

The top reason employers offer wellness plans is to reduce long term health care costs. Benefits to employee morale and productivity, reducing turnover and recruiting talent rounded out the top five factors motivating employers to implement an employee wellness program.

The cost savings argument is supported by recent findings that suggest successfully getting an employee to lose weight or quit smoking has a tangible beneficial effect on future health premiums and even in workers compensation premiums: A 2001 report found that businesses paid an average of $176 in workers comp benefits to non-smokers, and $2,189 to smokers.[i]

Johnson & Johnson, the well-known personal care product company, implemented an employee wellness program that reduced the number of smokers by two-thirds, and doubled the number of employees who reported themselves to be physically active. The benefits to the company's bottom line were dramatic: Johnson & Johnson estimates that their investment in their employee wellness program produced $2.71 in savings for every dollar they spent on their wellness program between 2002 and 2008.[ii]

Companies are also going so far as to bonus employees for not smoking, or reducing their contribution to their own health care plans - in effect splitting their savings with workers to encourage healthier behaviors. And in some cases, employers arerefusing to hire overweight workers or smokers altogether- all in an attempt to rein in their exposure to the increased health care costs incurred by workers with voluntary unhealthy lifestyles.

[i] Musich S, Napier D, Edington D. The Association of Health Risks with Workers' Compensation costs. JOEM. 2001;43(6):534-541.

[ii] Harvard Business Review: What's the Hard Return on Employee Wellness Programs? Leonard Barry, et. al., March 2010