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. 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 aging 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 aging 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 Employers See the Savings?
Workplace wellness programs save employers money in two ways. According to the Rand Corporation—who analysed 10-year data from a Fortune 100 employer—divides cost savings into two major categories:
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 makeup 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. For other ways to take care of your workforce, take a look at ValueChampion's guide on how to hire employees for your small business in Singapore.
What Can We Do About This Data?
Given Singapore's continuously aging 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.
The incentive is there. Singapore businesses should take advantage of all investment tools available to help their business grow.
The article How Workplace Wellness Programs Save Employees Money originally appeared on ValueChampion's blog.
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