The Controversy of Wellness Incentives

Aug 29, 2016

This is Part 6 of a 10-part Must Have blog series on: Incentive Tracking.


As a wellness professional, you understand that employee participation in a comprehensive wellness program will give you a return on investment (ROI) in terms of lower healthcare costs, less absenteeism and a more productive workforce. However, the million dollar question is:

 


Will an incentive program give enough return to merit the investment? 


THE CONTROVERSY OF WELLNESS INCENTIVES

Incentive tracking is somewhat of a controversial topic because it requires you to answer some big questions that you may not be sure the answer to (or want to know the answer to) plus, everyone seems to have an opinion.

  • How (if any) do incentives impact employee morale?
  • Can your company afford to maintain the program in perpetuity?
  • Should the incentive be open to some employees or everyone?

and so on...

These are just some of the questions to consider when it comes to this complex topic. A good wellness coordinator will consider many factors when deciding if and how to structure their incentive program. Fortunately, there is some good research available to determine the efficacy of wellness incentives.

THE STATS ON WELLNESS INCENTIVES

Incentive program effect on participation rates

The Rand Corporation published research on the Incentives for Workplace Wellness Programs. They looked at many variables within a large organization offering incentives.

Some of the key findings were:

  • Incentives did increase wellness program participation by about 20%
  • Larger incentives don’t work better
  • Penalties are more powerful than rewards
  • Comprehensive incentive programs have the highest participation rates

PARTICIPATION BENCHMARK

When we look at participation rates of employees on the CoreHealth corporate wellness platform, 30% participation is a successful benchmark. A 20% increase should be thought of as a very significant improvement.


For example: if your workforce participation rate is at a measly 10% then adding an incentive program could be the boost you need to consider your wellness program a success – and ROI.


Interestingly, programs with no incentives had a median participation of 20% whereas those with an incentive program had a median participation rate of 40%.

PENALTIES VS. INCENTIVES

Somewhat intuitively, when incentives were presented as penalties (for example, higher insurance rates for smokers), the median participation rate jumped up to 73%.

So what can we take out of this? Are the best incentive programs those with penalties? Perhaps. But one should also consider the impact to employee morale.

  • How are the smokers going to feel if they are being isolated?
  • Will such a program encourage positive behavior change?

The study showed that a $600 penalty (via increased insurance rates) only increased participation in a smoking cessation program by 8.5%.

HOW MUCH IS ENOUGH FOR INCENTIVES?

To further complicate things, we should also consider the value of incentives offered. Rewards valued over $100 showed a 51% participation rate compared to a 36% participation rate for lesser reward values. Hardly a significant increase when factoring the reward costs versus ROI.

SUSTAINABLE INCENTIVE PROGRAMS

We should also consider if the company can continue to fund an incentive program for any extended period of time. Behaviors tend to revert when an incentive program is offered and then taken away.

INCENTIVES - BIG AND SMALL

The good news is, more expensive rewards are not always what boosts participation. Something as simple as a better parking space, an employee lunch buffet, or a half-day off work can usually be fit into the budget and still offer plenty of motivation to participate in a wellness program.

OTHER THINGS TO CONSIDER

As you can see, there are many factors to consider with any incentive program. If you choose to venture into the world of incentive programs, here are some additional things to consider:

  • Do you have a technology solution that will allow flexibility and convenience for your incentive tracking? The last thing you need is a desk full of paper and a bunch of confusing Excel formulas to figure out. Incentive tracking has to be simple and efficient.
  • Is your incentive tracking and program easy to understand? If employees don’t see a benefit or can’t figure the program out, it’s going to be a bust.
  • What is your budget going to allow? We know that more money doesn’t mean more participation (necessarily), but ultimately there will be a cost. What can you realistically afford to maintain participation momentum?
  • Will your incentive program have penalties? Factor in the effectiveness of this method against potential morale factors such as isolating certain groups.
  • Are there any laws relevant to your location that should be considered?

Whatever you decide, remember that the end goal is always a happy, healthy, and ultimately productive, workforce. It’s up to you to create that culture. 

TAKE THE HEADACHE OUT OF INCENTIVE TRACKING

The CoreHealth platform has an incentive engine that works as a central hub to track rewards for all aspects of wellness programs and external third-party programs with seamless integration. Use points, dollars and badges with a unique gamification experience to make it fun and exciting. Request a demo to see it in action.

Request a Demo

Additional Resources You May Like

Check out these other great resources to help you grow your wellness revenue.

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ABOUT COREHEALTH TECHNOLOGIES

CoreHealth Technologies Inc. is the leading corporate wellness platform trusted by more than 1000 organizations, ranging from medium-sized businesses to Fortune 500 enterprises. At CoreHealth, we believe that developing the best employee wellness programs is all about giving wellness companies the right code, design and access to the latest innovations. With the most customization, integrations and reliability of any software in its class, CoreHealth’s powerful platform lets users focus on growing great companies. For more information, explore the CoreHealth website

Cindy Danielson

Written by Cindy Danielson

Cindy Danielson is CoreHealth's Marketing Maverick and team leader with a passion for connecting people and technology. In addition to marketing, she has experience as a Benefits Brokers, HR Professional and Project Manager.