Times are tough. As a result, many state and local governments throughout the country are looking for ways to tighten the purse strings. An obvious strategy is to cut expenses, eliminating non-essential programs and services in order to balance budgets. While employee wellness programs may technically fall under the umbrella of non-essential programs and services, are they wise to cut? Evidence suggests not.

The logic is simple: A healthy employee is a more productive employee. Healthy employees take fewer sick days, and, in general, cost employers less in insurance expenses.

#1: A healthy employee is a more productive employee.

The benefits go deeper than dollars. Employers that offer wellness programs tend to generate a higher morale in the workplace, and find a greater sense of loyalty from their employees – all directly, and indirectly, contributing to greater overall productivity.

Can We Afford It – Especially Now?

Cutting a wellness program may save money in the short run, but spending money on a wellness program saves money in the long run.

#2: Employers that offer wellness programs tend to generate a higher morale in the workplace, and find a greater sense of loyalty from their employees

A city’s investment in its wellness program is even more important during fiscally challenging periods than during fiscally robust periods, according to Chester C. Christie, Human Resources Director for the City of Columbus, Ohio, which sponsors a program called Healthy Columbus for its employees.

“A fitness/wellness focused workplace culture and, ultimately, a healthy workforce equates to a more productive workforce. A more productive workforce leads to increased efficiencies and more cost-effective service delivery,” says Christie. “Both support cost containment efforts and lead to fiscally prudent management and excellent stewardship of taxpayer resources. This is especially important in the public sector environment.”

Approximately 10,000 state employees are eligible to participate in the State of Rhode Island’s Rewards for Wellness Program, currently in its fifth year, says Susan Rodriguez, Deputy Personnel Administrator for the State of Rhode Island. Through the program, employees can earn up to $500 in credits towards their health care premiums.

#3: By focusing on preventive care, organizations can experience significant savings on employee emergency room visits and other serious health care issues.

One of the focuses of the program is encouraging primary care. “Since the inception of the program, we have seen an increase in preventive care visits from 53% of employees to 61.4%. Our emergency room utilization rate has dropped from 226 visits per 1,000 members to 175 visits per 1,000 members. Employees not engaged in the Rewards for Wellness program cost, on average, 1.5 times more than those that are engaged (defined as participating in three or more of the program’s activities).

Aggregate Benefits = A Classic “Win-Win” Scenario

The cost of one employee’s health issues – related to cardiovascular disease, for example – may not amount to much, but if one were to aggregate that cost across all employees, the cost to an employer can be staggering, according to Holt Vaughan, Director, myHealthCheck .

MyHealthCheck is an outcomes-based approach that provides financial incentives for employees who improve their overall health. Employees are given an initial health assessment based on a proprietary algorithm, resulting in a score from 0 (lowest) to 100 (highest). The score takes into account six key risk factors: blood pressure, body fat percentage, LDL/HDL cholesterol, glucose, triglycerides, and nicotine.

At participating companies/organizations, the initial health assessment determines employees’ contributions to their health insurance premiums. When an employee improves his or her healthcare score, they pay less for their health insurance. Simple, but impactful – and highly motivating.

Employees benefit from lower insurance premium payments; employers save lower insurance costs. But they also gain in less tangible ways. “Wellness programs often generate a transformation of culture,” says Vaughan. “When an organization – whether in the public or private sector – invests in its employees, the returns on that investment extend beyond dollars,” he says. “The feeling that your employer cares results in greater productivity, increased loyalty, lower absenteeism, and other intangibles that come together to create a more efficient workplace.”