There are many definitions of wellness programs, so naturally, the amount spent on employee wellness has a wide range. But how much should an organization spend on employee wellness? Is there a formula, or research to back a "magic" number? Well, kind of.
There has been plenty of research and it's based really on the goals of the wellness program, which actually makes sense. The more you want or need out of a program, logically the more you'll need to spend or invest. Here's the rundown...
First, start with why.
Why does your organization even need a worksite wellness program? Is it to create a kick-ass place to work, so employees stay loyal and productive? Do you want to help improve the health of your employees? Or is there a greater pain point, like employee healthcare costs that needs to be addressed?
This will help establish the business case to your senior managment and will help provide an idea of the range in investment you might need. Impacting healthcare costs, obviously a big undertaking and will take several stakeholders, including your benefits consultant to discuss future health plan design.
Next, let's look at the research.
The Wellness Council of America (WELCOA) recommends that at least $100-$150 per employee per year should be spent on promoting wellness. If health coaching and incentives are needed, you will need to add another $300 per employee.
According to WELCOA, if you are only spending $45 per employee annually, you will not receive any return on your investment. They suggest, that in reality you can run an effective worksite wellness program with the budget of $100-$400 per employee per year.
Our technology partners at Wellsource, have stated that among their clients, the average wellness program costs per person are $160 annually, plus health insurance premium expenses:
- $10 for health risk assessment and online wellness resource tools
- $50 for biometric screening (lab work)
- $50-120 for telephonic coaching
- $50-100 for incentive, plus discounton health insurance
As for our own clients, the average spend is a little higher at around $250 per employee per year. This is due to adding one additional service to the mix, which is Program Management.
To download the research document that goes into a little more depth, click on the button below: