Best Practices in HR

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  July 28, 2016

Using Wellness Programs as a Retention Tool for Your Great Employees

This is the fourth in a multi-part series about wellness programs in small businesses. This article looks at how offering wellness programs as a retention tool can help small businesses recruit, engage, and retain their workforce.

At a rapidly increasing rate, small businesses are facing direct and indirect healthcare costs that negatively impact business operations, as well as the bottom line. Employers are getting hit with the costs of increasing premiums for an unhealthy workforce, costs related to absenteeism, and costs associated with employees who are on the job, but not fully working due to illness and medical conditions. In many cases these costs that inspire both big and small businesses to implement a wellness program [link to: Implementing a Workplace Wellness Program for Small Businesses article].

Business owners aren’t the only people considering the benefits of wellness programs. Nearly half (47 percent) of 1,800 workers surveyed said they would participate in wellness programs to achieve better overall physical health. Other top reasons that employees mentioned for why they would participate included:

  • Reduced personal health care costs (30 percent)
  • Greater chance of living longer and healthier lives (30 percent)
  • Receiving employer incentives for participation (28 percent)
  • Reduced stress (28 percent)

Source: Principal Financial Wellness Index

The high level of employee interest illustrates that businesses not only benefit from reduced health-related costs when they offer a wellness program, the programs can also serve as an important way of recruiting, engaging and retaining employees. It’s a fairly straightforward formula: businesses that help their employees address and manage lifestyle risks and chronic health conditions can earn trust and commitment from employees that positively impact long-term results.

Recruiting employees

In some cases, wellness programs can make an influence before employees join an organization. The fact is talented job candidates are looking for an employer that provides not only a competitive salary but a competitive benefits package as well.

According to a survey by Virgin HealthMiles, 87 percent of employees said they consider wellness benefits when considering an employer. If you’re a small business, the health and wellness options you provide might be the deciding factor in a candidate accepting a job with your organization instead of with a competitor. In addition to providing healthcare, and retirement investment options, a wellness program also has a positive effect on their recruitment efforts.

Nowadays it’s not uncommon for organizations to offer some variation of a wellness program; that means that applicants have come to expect it when they evaluate new employers. Indeed, there are costs associated with putting a program in place. But when it comes to recruiting, there’s also a cost of doing nothing. If an applicant expects an employer to have a wellness program, but finds out you don’t offer one, that applicant might not be willing to take the job.

Engaging employees

In addition to enticing candidates to join your organization, effective wellness programs can also make work more fun once they’ve been hired. According to the survey conducted by Virgin Health Miles, 70 percent of workers say that wellness programs positively influence the culture at work.

“It’s cool to see how people work together on wellness challenges at our company,” said Cindy, a corporate event planner in Seattle who has experience with wellness programs offered by two of her employers.

At her current workplace, Cindy has seen how the sense of camaraderie around health engages employees long after a challenge ends. Her employer offered a stair challenge that officially ended in November. Now, more than seven months later, there are people from the tech department who are still climbing the stairs together on a daily basis—with no incentive required. Apparently the new behavior clicked.

Cindy’s employer offers new challenges each quarter. This is likely in an effort to keep employees from becoming complacent or bored with what’s being offered. With each challenge, there are opportunities to earn points. In addition to the stair challenge, other examples Cindy mentioned were receiving 50 points for going to the dentist. Or 25 points for attending a wellness session. At the end of the quarter, if an employee has earned 1,000 points they are eligible to receive a gift card. For 2,000 points earned, the company will pay for one month’s health care premium the next year. And, for 3,000 points, the company will cover two months of the employee’s health care premium.

“If a business hires the right wellness partner, it pays dividends regarding employee satisfaction and to the bottom line. The cost is a no-brainer,” said Amy Cox, owner of Omstead, LLC

Cox provides lunch-and-learn programs around wellness topics for businesses in the Chicago, Illinois area. Her goal is to give employees information they can immediately put to use, and stay away from dry or boring content that doesn’t entice someone to make changes.

Recently she facilitated a lunch-and-learn program focused on farmer’s markets. Her program covered the where, who, what and why of local markets, including how community-supported agriculture benefits the environment as well as consumer health. During the lunch session, Cox prepared a seasonal salad from items she sourced at local farmer’s markets. The employees who attended were able to supplement the lunch they brought with a delicious—and healthy—treat, all thanks to their employer.

While fixing and serving a delicious salad or giving points for a trip to the dentist may seem simple, these programs deliver big results around employee engagement. Not only do these offerings feel like perks, but they also serve to incentivize new behaviors, and help employees create positive lifestyle changes.

And, in Cindy’s experience, the increased engagement around her health also improves her performance.

“The challenges make me think more about exercise, so I’m more active, which tends to give me more energy. As a result, I’m more productive.”

Retaining employees

It makes sense that employees become more motivated and productive when they know that their employer cares about their quality of life enough to offer programs that address employees’ physical, emotional, financial and social health. Providing these types of benefits not only motivates and engages employees, but it’s also an important part of retaining them as well. Research indicates that employers and employees alike acknowledge the retention benefits of these programs.

In 2012, the National Small Business Association conducted a survey of more than 1,000 small business owners. In that study, 58 percent of business owners agreed with the statement, “A health and wellness program is a differentiator for employee recruitment programs are critical for employee retention.”

In a MetLife study, 60 percent of employees agreed with the statement, “The employee benefits offered to me are an important reason why I remain with my employer.”

Finally, 45 percent of Americans working at small to medium-sized companies said that they would stay at their jobs longer because of employer-sponsored wellness programs, according to the Principal Financial Well-Being Index

If these numbers aren’t evidence enough, Cindy, the corporate event planner in Seattle agreed.

“The wellness programs from my employer are a nice benefit; they’re a great incentive,” she said. And, she added an important caveat, “They’re not the only reason I stay.”

While they are valuable, wellness programs are not a magic wand. If you want to recruit and retain top talent, you must also have a competitive compensation package, a great work environment, and a management team that is committed to creating a positive organizational culture.

Another important key to maximizing the recruitment and retention benefits of wellness programs is to make sure that employees know about the program. That they’re aware of what’s available. And that they understand how to take part in what’s offered. Even the best wellness program won’t make a difference if employees are confused about how to sign up.

Evidence strongly suggests that while it takes time, effort and financial investment, offering a wellness program is a smart move. Providing wellness programs helps promote a healthy company, adds appeal to job seekers, engages employees, and helps retain top talent. For someone contemplating whether to work for your business, a gym discount, a weekly yoga class, or sessions with a nutrition coach, might be what make them sign your offer letter. Those same offerings might be what make your current employees think twice before they decide to leave your organization for another employer.

“The possibilities for employees and businesses are overwhelming,” said Cox, the wellness coach in Illinois.

“Look at the chronic inflammatory conditions and provide a program that crowds out the bad behavior and crowds in the good behavior, there’s nothing to lose.”

images byScott Webb