We know that workplace wellness programs can help boost healthy behaviors and reduce absenteeism among workers. But what about the bottom line? Studies have found that companies with robust wellness programs outperform others on the stock market by an average of 7-16% a year.
In fact, some experts argue that investors could benefit from assessing wellness metrics when valuing companies. A paper in the Journal of Occupational and Environmental Medicine (JOEM) introduces an Integrated Health and Safety Index (HIS), which would help investors determine the business value of a company’s health and safety. The assessment is modeled after the S&P Dow Jones Indices, a set of metrics used by the investment community to evaluate the economic, environmental, and social performance of the largest public companies.
As Chris Orchard writes in a Harvard T. H. Chan School of Public Health article, the authors of this JOEM paper are “entering uncharted waters….the overall business value of wellness is just now emerging.”
More research regarding the benefits of wellness programs and practices on business outcomes will help. In particular, what are the specific connections around why wellness is good for business? Is it because employees are more productive, making the overall company more cost-efficient and profitable? Or as Orchard writes, perhaps strong health and safety programs are just “symptoms of good management”?
One key challenge in assessing the business value of a healthy workplace is reflecting its non-monetary benefits, such as talent acquisition and retention, which is not reflected in metrics like health insurance savings or stock market performance.
Despite the measurement challenges, Orchard notes that some businesses have been able to demonstrate immediate business benefits from wellness efforts. One medium-sized company that manufactures industrial automation products experienced an eight percent profit from operations about five years into their workplace wellness initiative, which included physical activity programs, a health clinic, pharmacy, and health coach). In addition, the company experienced a one percent staff turnover rate, compared with an industry average of 13 percent.
Bottom line: We know businesses can save money and boost profitability by supporting workers’ health, safety, and well-being. As a Huffington Post article reports: “The cost of chronic disease, work-related injuries and illnesses, stress—along with the resulting employee disengagement, poor productivity and absenteeism—is estimated to amount to more than $2.2 trillion, or 12% of GDP in the U.S. alone. Never before has the business community faced risks and opportunities in health at this scale.”