Insights Into Corporate Wellness Programs Cost & ROI

There was a time when job seekers used to shortlist their potential employers based on the monetary compensation they got. However, this is not the case anymore. Today, they look out for organizations offering financial and wellness benefits.

Yes. You read it right! It is one of the many reasons for the booming corporate wellness market right now. The global corporate wellness market size was valued at USD 53.0 billion in 2022. It is expected to grow at an annual growth rate (CAGR) of 4.47% from 2023 to 2030.

So, dear employers and HR professionals, if you are looking for ways to level up your employee experience game, you have got to introduce a corporate wellness program. But, these programs also come bearing costs.

This blog will cover how much a standard corporate wellness program costs. We’ll also discuss the ROIs of including a wellness program for your employees and the organization.

How Much Do Corporate Wellness Programs Cost?

Corporate wellness programs do not have a fixed cost per se. Rather, based on how employers customize the program, the cost varies. In addition, the total cost of corporate wellness programs depends on 2 key factors:

Costs by Company Size

• For companies with less than 100 employees, costs typically range from $10,000 - $50,000 annually.
• Medium-sized companies with 1,000+ employees often invest $100,000 - $250,000 annually.
• Large companies with 10,000+ employees may spend over $2 million annually.

Pricing Models

Regarding pricing models, wellness program costs vary from vendor to vendor. It will be best to finalize a vendor that suits all your requirements. Below are some insights on how pricing models may differ.

1. Usage-based model

In this model, the cost of the employee wellness programs is based on the number of participants or engagement level. Simply put, the cost is calculated per the resources or services provided to a particular company.

Two basic forms fall down the usage-based model.

Pay per employee per month:

In the pay-per-employee-per-month model, vendors charge a fixed amount per participant monthly. The beauty of this model is that it helps employers foresee the budget to allocate for the program. Usually, vendors offer all the wellness services within such a model monthly.

Pay per participant:

In the pay-per-participant model, vendors charge for only the employees actively participating in the program’s activities. The highlight of this model over the previous one is that it is more cost-effective; the employer only has to pay for employees who participate in the program.

2. Program tier model

This model offers the service in basic, standard, and premium tiers. Each of the tiers comprises different wellness services according to the price list. Also, a specific number of employees can enroll in the program in each tier. For instance, here’s a sample tier model for a wellness program:

• Tier I: 1-100 employees
• Tier II: 101-300 employees
• Tier III: 301-500 employees

3. Budget-capped or bundled models

In such models, vendors provide a restricted number of services for a specific period at a fixed amount. Budget-capped models allow employers to choose wellness activities appropriate to their workplace setting. Additionally, employers get to invest in the program cost-effectively.

Suggested reading: 10 Corporate Wellness Strategies To Boost Productivity

The Multifaceted ROI of Corporate Wellness Programs

On the surface level, integrating a good wellness program is all about creating a better brand image for an organization. But there is more to it. Yes. Besides looking for and retaining loyal employees, wellness programs positively impact the organization in the long term.

Calculating the return on investment or ROI is necessary in the business world. After all, you will utilize your company’s monetary resources, so learning how it will profit the organization is essential.

You, as an employer, should be aware of two forms of ROI: Hard ROI and Soft ROI.

Hard ROI

Hard ROI means the measurable benefits an organization achieves after financially investing in a wellness program. Here are some common hard ROIs that good employee wellness programs extend -

• Reduced insurance and healthcare costs
• Lower costs associated with absenteeism
• Direct medical cost savings from improved employee health

An example of a hard ROI calculation is:

"Company A invested $200,000 in a wellness program and saw $400,000 in savings from fewer doctor visits and reduced health insurance claims. This equals a 100% ROI."

Soft ROI

Soft ROI is a benefit that cannot be technically measured but indirectly impacts organizations. Here are some common soft ROIs that are worth mentioning.

• Increased productivity and performance
• Higher employee retention and engagement
• Better recruitment due to reputation as a "great place to work."

An example of soft ROI calculation is:

"Company B's wellness program costs $150 per employee. While hard savings were minimal, employee engagement scores increased by 5%, and turnover fell by 10% in the first year. The program is deemed a success."

Suggested reading: 7 Must-Haves For A Successful Corporate Wellness Plan

Crafting a Cost-Effective Wellness Program

The idea of bringing in a wellness program initially sounds costly. But a good wellness program helps organizations save big bucks. For that, you can carry out wellness initiatives that require minimal financing and utilize existing resources.

You can even collaborate with local wellness service providers at a discounted rate and promote healthy lifestyle choices in the workplace to minimize costs.

As you can see, crafting a cost-effective and adequate wellness program requires research and strategic planning. Here’s a walkthrough of all the steps necessary to create a good wellness program:

1. Study the organization and the employees.

The first step to creating the ideal wellness program is assessing how the workplace impacts employees' lives. For this, employers must hold surveys to learn how employees feel about working in the organization. Pst! Anonymous survey responses are far more reliable.

2. Set goals.

Once the survey responses are in, employers can make clear goal settings. The goal will focus on the areas that require improvement.

For instance, most employees of the organization responded that they had less or no work-life balance. In such a case, employers should explore strategies to promote work-life balance.

3. Make use of existing resources.

You can take an economical path by utilizing resources that already exist. For example, allow conference or meeting rooms for fitness activities.
Explore strategies to engage employees in the program.

The trickiest part of making a wellness program successful is enrolling and keeping the employees engaged. To overcome this, including wellness activities that can drive participation rate does the trick.

In addition, offering incentives to employees who complete the activities further can level up the engagement game.

4. Make the program flexible.

It is more likely that employees will participate in a wellness program that offers a variety of activities. It, in turn, helps reduce an organization’s future healthcare costs.

5. Promote healthy habits at the workplace.

If you think rolling out a wellness program in the workplace will magically increase your employees’ well-being index, then you are mistaken. To truly benefit from such a program, employers must introduce the concept of a healthy lifestyle in the office.

Offering nutritious food, encouraging NEAT exercises, and arranging a designated space for fitness activities are minuscule steps you can take to instill healthy habits.

Case Studies

Johnson and Johnson

Johnson and Johnson is a company that is worth mentioning when it comes to investing in wellness programs in the workplace. The organization offers a comprehensive program focusing on physical, mental, and financial well-being.

The company invests approximately $2,400 per employee in wellness programs every year. They have reported a return of $2.71 for every dollar spent. This indicates the program is cost-effective for them.

Outcome: The company has significantly reduced employee healthcare costs and increased productivity. Also, interestingly, Johnson and Johnson was able to help more than two-thirds of their employees quit smoking. In addition, the program increased the number of employees who lead an active lifestyle by 50%.

Google

Google is another organization that deserves a mention in this list. According to this tech giant, they have a specially curated wellness program to boost their employees’ health and well-being. Google’s wellness program offers on-site wellness amenities such as

• Fitness and massage center
• Healthy snacks and meals
• Napping pods
• Health professionals

In addition to this, their program also provides mindfulness activities and even support groups.

Outcome: Google has enhanced employee morale productivity and lowered stress levels significantly. Also, the organization has developed a positive image in this regard and has been able to attract and retain skilled employees.

Zappos

Zappos, a show retail brand, is known for its unique efforts towards boosting employee well-being and engagement. The company offers wellness programs where employees can avail of gym memberships and fitness classes at special prices.

Additionally, Zappos provides napping spaces in the office so employees can recharge whenever required.

Their employees also have access to on-site health professionals, where they can get their health vitals checked. While these are motivating for employees, Zappos came up with a one-of-a-kind wellness initiative known as “Wellness Adventures.”

As part of this initiative, employees can engage in fun activities like laser tag, basketball, trampoline, and so on during lunch breaks. The company also made it into the news by introducing a wellness initiative wherein employees could take music-learning lessons to de-stress.

Key Takeaways on Controlling Costs

Controlling costs for corporate wellness programs is all about planning strategically, understanding the market's pricing models, and leveraging existing resources.

With it, there are two more aspects that you, as an employer or HR manager, should prioritize while finalizing a wellness program - employee engagement and wellness promotion.

It is wise to go through real-world case studies to successfully implement such a program and obtain positive ROIs. These provide insights into what a good wellness program looks like from the inside out.

And we will mention it again: it may take some time to get the ROIs to your liking. And do not panic if your investment is not delivering ROIs right away. Give it some time. Meanwhile, initiatives should be carried out to increase the participation rate in the program.

Get started with your wellness program

Now that you know what corporate wellness program costs and ROIs are, you should get started on strategizing for the same. It is important to find the right incentives for your employees. It will motivate them to participate in the program, increasing your hard and soft ROIs.

Also, you need to have coherent goals and objectives for the program to promote wellness successfully.

Finally, communicating with your employees while strategizing ensures the program's success. Studying all the wellness platforms in your area to learn which will suit your workplace best is also smart.

In this case, Vantage Fit, a global wellness platform, may interest you. It offers a holistic approach to corporate well-being, extending tools to foster a productive & sustainable work culture.

Suggested reading: A Comprehensive Guide to Corporate Wellness Programs

Frequently Asked Questions

1. What is the average cost of wellness programs per employee?

The average wellness program budget for each employee per year is around $742. The amount may again be less or more, depending on the program module.

2. Can small businesses also implement cost-effective wellness programs?

Yes. Small businesses can implement cost-effective wellness programs. Wellness programs are customizable. These can be tailored to fit into any business’s budget goals.

3. What factors influence the cost of a wellness program?

The average cost of corporate wellness programs varies on the following factors:

• Scope of the program
• Company size
• Wellness initiatives
• Geographical location of the organization seeking service