Can Workplace Wellness Programs Save Employers Money?

With a rise in health care costs and an aging population in Singapore, studies show that workplace wellness programs save employers money every year in health cost savings while providing a strategic advantage for employee satisfaction and retention.

You've probably heard of a friend or co-worker talk about the different wellness programs they have in their office. We tend to have two schools of thought:

• We can't stop talking about Yoga Fridays

• A nice perk, but not a strategic priority

Businesses in Singapore have adopted employee wellness programs as early as the 1990s. But do these programs save employers money?

Growing Health Care Costs

Although not required by law, it is standard practice in Singapore to provide basic health insurance. Although Singapore's health care system is exemplary and efficient, the cost to provide healthcare is one of the highest in South-East Asia and has one of the fastest ageing populations in the world.

Ultimately, this sharp rise makes health care a growing cost of doing business, where the inflation rate for healthcare grows 10% every year. Unfortunately, chronic diseases, stroke, and heart diseases increase with a rapidly ageing population. Fortunately, healthy lifestyles reduce the rate of these illnesses, and a well-executed workplace wellness program can reduce the rate of developing these conditions. With a healthier team, employers can save money on future health care dollars spent.

Where Can Employers See Savings?

Workplace wellness programs save employers money in two ways. According to the Rand Corporation, wellness programs result in two types of savings:

• Disease Management Programs

• Lifestyle Management Programs

Disease management programs address immediate health problems like heart disease and businesses realize benefits in the short term. Lifestyle Management Programs mitigate longer-term health risks like poor eating habits, smoking, and exercise—realizing benefits in the long term.

We can see that both programs reduce the average cost per member by US$30 per month. That being said, disease management programs make up for 87% of the cost savings—saving US$3.80 for every US$1 invested. Whereas lifestyle management programs make up only 13% of the cost savings and save only US$0.50 for every US$1 invested, according to The Rand study.

The bottom line is that both types of wellness programs result in direct cost savings for employers. 

What Can We Do About This Data?

Given Singapore's continuously ageing population, a closer look at the studies suggests that employers should target those who already have chronic diseases first to maximize short-term cost savings.

Employers should pay close attention to the cost of the programs they implement. Although the initial investment for a lifestyle wellness program can be cheaper and easier to implement, prioritising disease management programs over lifestyle programs provides a higher return on investment (ROI). Focus on where your wellness program dollars are going, health screening vs food campaigns.

That being said, don't neglect setting up a strong lifestyle wellness program for your employees, especially for your young and middle-aged employees. Not only do lifestyle programs ultimately save employers money, but they also mitigate the risk of developing chronic illnesses that contribute to the higher health care costs in Singapore. Additionally, you will find that lifestyle wellness programs benefit employee satisfaction and retention rates, indirectly resulting in cost savings.

Available Programs

At SgFitFam, we provide lifestyle wellness programs such as group fitness classes, fitness & nutrition talks, cooking demos, mental wellbeing workshops, and ergonomic workshops. We also provide customised disease management programs like personal training and nutrition coaching to combat chronic diseases such as cardiovascular health and diabetes.

Learn More About Our Programs & How We Can Help You

This article is contributed by Stephen Lee at ValueChampion, a consumer research and personal finance comparison firm that prides itself in distilling data into actionable, unbiased insights to help people make smarter financial decisions.

Edited by the SgFitFam Team.