Employers spend close to eight billion dollars a year on workplace wellness. Yet, several studies, including one published in the Journal of the American Medical Association, show that most of these efforts have not improved employee wellbeing or delivered returns that justify their investment.
The problem is that employers have not adopted the types of programs most likely to improve employee wellbeing and deliver strategic business outcomes. In short, most employers invest wellness dollars in low-impact programs that focus on the wrong things.
The solution? Prioritize high-impact, evidence-based wellbeing strategies that can achieve meaningful returns by applying the Pareto Principle, an idea developed by Italian economist Vilfredo Pareto in 1895.
The Pareto Principle asserts that 80% of outcomes in many activities come from 20% of the effort. When applied to workplace wellbeing, it’s an idea that can help employers design programs that deliver outsized returns and avoid low-impact, low-return programs that waste precious resources.
Rule 1: Strategic Planning
Strategic Planning is the most high-impact ingredient for employee wellbeing. Yet, most employee wellbeing initiatives lack the required C Suite input and leadership, are vendor-driven, and fail to employ an evidence-based approach to ensure that investments and programs achieve substantial returns.
Companies that embrace the 80/20 rule ensure that HR partners with C Suites to plan and oversee wellbeing initiatives. This ensures that wellbeing programs advance strategic business objectives.
For example, an engineering firm might see long-term employee retention as a top priority. This is something the CEO and Board worry about because losing highly skilled employees can cost the company millions of dollars a year in turnover and lost intellectual capital.
For this company, focusing primarily on helping employees lose weight (which is how most employers approach wellness programs) would be a mistake. For one, it assumes this is what employees need. It’s not likely to advance the C Suite’s strategic priorities around employee retention.
Instead, to develop wellness programs most likely to minimize turnover, this company should first survey employees to determine what they need, and then review exit interviews to understand why employees leave the company.
If themes like “job-related stress,” poor “work-life balance” or “bad managers” are prime factors, the company can apply the Pareto Principle and develop a few programs that address those issues via stress reduction, creating a supportive workplace culture, and addressing employee mental health.
This is how to ensure programs deliver meaningful impacts for both workers and employers. While gym memberships and weight loss programs still have a place, they shouldn’t consume the majority of a company’s wellness resources.
The 80/20 rule also ensures employees are more likely to participate in programs that improve their wellbeing, which can boost engagement, cultivate long-term employees, and ensure a company’s wellbeing investments achieve the right returns to justify continued funding.
Rule 2: Move Beyond Fitness-First
Most wellness programs prioritize physical health, notably weight loss and exercise. But this begs the question: what does wellness really mean? Is wellness primarily about waist size or losing and later gaining back weight when someone reverts to old habits?
While weight and exercise are important, they should not be the sole criteria for creating wellness programs. Fitness-first programs often alienate many employees and appeal to the already-healthy, not those who need it most: at-risk or chronically ill employees.
Consider that roughly 20% of a typical workforce (most of whom are at-risk or chronically ill) account for 80-85% percent of an employer’s total healthcare costs. For the vast majority of these people, fitness-first programs can alienate or discourage participation due to existing health challenges.
“People struggling with their weight frequently feel self-conscious going to a gym, and a person already struggling with their cholesterol numbers is going to find certain biometrics unattainable,” according to an article in Plan Sponsor.
Because fitness-first programs based on gym memberships and step count competitions don’t deliver meaningful employee health or bottom line impacts, they shouldn’t comprise 80 percent of a wellbeing budget.
Instead, employers should focus on higher-impact programs that address healthy eating and chronic illness, which better determine physical health.
The Mayo Clinic has shown that healthy eating effectively addresses obesity and diabetes. And diet expert Dr. David Katz asserts that healthy eating is more effective at losing weight than exercise alone.
Because healthy eating is central to physical wellbeing and preventing chronic illness, companies can create healthy eating programs that include:
- Lunch-and-learn speakers (bring in a nutritionist)
- Classes on how to read food labels
- Healthy eating assessment tools
- Helping employees access healthy food
Chronic illness is the primary driver of healthcare claims and disability, which means it benefits from the 80/20 rule and programs that target at-risk employees, and educational programs for the chronically ill on proper self-care and accessing the healthcare system at the right locations.
Mental Wellbeing
Mental health is central to human health. Poor mental health can lead to unhealthy lifestyles, poor sleep, substance abuse, and affects employee job performance in ways that hurt customer service and product quality.
Untreated mental illness is a leading cause of disability in the US today. Prior to the Covid-19 pandemic, studies found that one in five adults experienced a diagnosable mental illness each year, and over half go untreated.
So mental health must take center stage in workplace wellbeing. The returns can be enormous, with evidence by the The American Psychiatric Association (APA) showing that 80 percent of employees who receive mental health treatment improve their work efficacy and satisfaction.
Start with an all-employee mental health assessment to reveal predominant workplace mental health issues and take steps to reduce workplace stress, which can lead to depression and other serious mental health conditions.
Address stigma through education programs and company-wide communications and consider mobile mental health apps. Allow office visits during work hours and provide rooms for virtual therapy.
Reduce employee costs by eliminating copays and deductibles for mental health office visits (face-to-face or virtual), and revise employee assistance programs to ensure all employees can get early and appropriate care.
Because mental health disorders are more costly in human and economic terms than waist size, apply the 80/20 rule and prioritize mental health programs that can improve employee health and deliver employer returns.
Financial Wellbeing
Employees are struggling with financial stress due to low wages, high living costs, and fewer employee benefits. A survey by PwC found that 59% of Americans cite “financial matters” as their top source of stress.
Financial stress affects all aspects of human health. Financially struggling employees tend to be less physically active, not eat as well, and often skip doctor’s visits to avoid out-of-pocket costs.
Financial stress can hurt job performance. It contributes to anxiety disorders and clinical depression, and a 2017 PwC report shows that low financial wellbeing hurts employers through absenteeism and leads to huge employer losses in productivity and healthcare costs.
Employers should apply the 80/20 rule by focusing on employee financial wellbeing. It can deliver high-impact returns in terms of employee health and wellbeing and deliver returns in workplace performance, customer service, and lower healthcare costs.
Start by paying living wages and lowering employees’ out-of-pocket healthcare costs. Help workers meet emergencies, provide (or help pay for) childcare, pay down student loan debt, or boost their buying power with group discounts and purchasing programs.
These are several examples of how the 80/20 Rule can position employees to achieve greater wellbeing. It illustrates how employers can use wellness funds where they’ll have the greatest returns, for the least cost, and pay for themselves in meaningful business outcomes.