If you’ve joined the much-needed change in companies wanting to keep employees happy, you may wonder how to determine the cost of a corporate wellness program and whether you have the budget for it. Consider this.
According to the Work Institute 2022 Retention Report, losing just one employee can cost your company up to two times his or her salary, also leaving 52% of employees to take on more work. Using an average of $47,000 as that employee’s salary, the loss of that one employee could cost your business up to $94,000!
What may cost even more than employee turnover is a lack of employee engagement. In fact, according to this article on Forbes.com, a company loses $3,400 for every $10,000 a disengaged employee earns. So if your business employs 250 people with an average salary of $47,000, you could be losing $3,164,040 each year due to disengaged employees.
When you look at these truths, your question quickly becomes how do I create the budget for this wellness program that could catapult my business forward?!
Reasons a Corporate Well-Being Program is a Must
According to research, from 2020 to 2021, the average budget for employee wellness programs grew by 22%, increasing from $4.9 million to $6 million.
But first, it’s critical to point out that a traditional corporate wellness program is not the same as, or effective as, a more holistic corporate well-being program.
Too many businesses invest in programs that offer a gym discount and a couple of seminars that go unused – and deliver no return on the investment.
As an example, in that same 2020 to 2021 time period, employees showed increased engagement in – yes, getting enough exercise and going for routine health screenings. But they were also more engaged in managing stress and saving money for vacations and other larger-ticket items.
Step 1 is to plan for a corporate well-being program that covers multiple pillars of well-being, not just your nutrition and physical health. With a well-planned well-being program, your company will:
- Address the needs of your employees
- Increase engagement in work and the well-being program
- Boost morale
- Increase employee satisfaction and loyalty
- Reduce employee turnover
- Improve employee retention
- Save on medical benefit costs
- Reduce sick days
- Improve your bottom line
Next, consider the less tangible costs of NOT implementing a holistic workplace well-being program – in addition to missing out on the benefits listed above.
Soft costs
Employee turnover: you risk losing up to two times her salary.
Learning curve: you may lose productivity, quality and time as the replacement employee learns the job.
Customer trust: your customers may experience sub-standard service and become apprehensive or even unhappy.
Employee burnout: other employees may feel added pressure or “spread too thin”. This can result in lowered productivity or additional employee turnover, repeating the cycle.
Key Elements to Consider When Estimating the Cost of a Corporate Wellness Program or Well-Being Program
You will want to consider several factors that impact the cost of a corporate wellness program.
- How many employees do you have and anticipate having in 3 years?
- Are you willing to invest in this ongoing or for what duration?
- How do you plan to market this program (promotional materials, internal communications)?
- Are you offering rewards or incentives (e.g. cash, gift cards, paid time off, discounted insurance premiums, discounted parking)? How much and how often?
- Do you have staff available to spearhead the program and find the right wellness providers covering all the pillars or will you outsource this and let your employees focus on the jobs at hand?
- Will you need extra equipment or materials to implement the program (fitness equipment, massage chairs, walking path scaping, etc.)?
- What methods will you use to implement? (educational materials, workshops, webinars, etc.)?
Also, it’s best to ask your provider to conduct a Health Risk Assessment (HRA) to collect more concrete data on what will make your employees happy and committed to your company.
An HRA can seem costly upfront. But as an example, Wellsource’s review of published studies found that for every dollar they spend on an HRA, employers save $22.26 in health-related costs over the course of the first year.
Example of Determining a Budget for Your Corporate Well-Being Program
Now, let’s look at a small 250-employee company and real numbers as an example. Note that these numbers can vary greatly, even outside the range of this example but this will give you an idea of how to determine the potential cost of a corporate well-being program.
Assessment (surveys and in-person interviews with recommendations and a 12-month roadmap). Multiple surveys per year will actually lower the cost of each survey. Also, the scope of the survey will impact the cost.
1-time annual survey: $4,000-$6,000
Well-Being Technology (individual and team challenges)
$5-$10 PEPM (per employee per month), depending on additional features like on-demand videos
Monthly cost for 250 employees: $1,250-$2,500
Annual cost: $15,000-$30,000
Rewards for Incentive Program ($25-$50 per quarter available for each employee; on average, there’s 20% completion each quarter)
Monthly cost for 250 employees: $1,250-$2,500
Annual cost: $15,000-$30,000
Outsourced Dedicated Employee-Care Officer (rather than adding this role to an employee’s current role)
Costs will vary per provider but for easy calculations, let’s say a provider gives options of a) $150 per hour, b) $1,000 for up to 10 hours per month or c) $625 for up to 5 hours per month.
Monthly cost for 250 employees: $625-$1,000
Annual cost: $7,500-$12,000
Personal and Professional Development Resources
(webinars, workshops, workbooks, etc.; using monthly webinars in this example)
$500-$1,000 per 60-minute webinar, assuming 1 per month.
Monthly cost for 250 employees: $500-$1,000
Annual cost: $6,000-$12,000
Totaling it up…
Estimated Budget Allocation for a Holistic Well-Being Program for 250 Employees:
$47,500 – $90,000 annually
$16-$30 PEPM (per employee per month) OR $192-$360 PEPY (per employee per year)
This is just an estimate including basic developmental resources. But now you can see how for possibly less than ONE employee’s salary, you can hire a professional to turn your employee engagement and retention around or to simply tune it up. You will be providing sound, consistent well-being care to your company as a whole but more importantly to your employees as individuals who feel more loyalty towards you.
Don’t get caught up in your cost estimates to get this program running, because your return on investment will be much greater when you partner with the right provider to implement the right program. And BreakWell is here to help! We will help you determine and implement a well-being program that achieves your company’s well-being goals on a budget that you’ll find reasonable in cost and high in returns.
Let’s talk! Schedule your free consultation today.