What to consider when planning a health incentive scheme for your employees

Today, stress, burnout, ageing, and the consequences of the past few years are driving a rethink by many about work, life, health, well-being, and prosperity. So, what do you need to do to bolster your organisation and help your people manage their health and vitality?

Do workplace well-being incentive programs improve health outcomes?

The short answer is yes. Reward programs motivate employees to actively improve their health, from healthy eating and physical exercise to the uptake of preventative health practices, such as going for health screenings and check-ups.

According to the Cigna Healthcare Vitality Study 2023^[1], eight in ten people say they’re interested in joining a reward program to adopt a healthier lifestyle. But here’s the clincher for employers – these programs typically need tangible rewards to ensure their success.

The Vitality Study found that 60% of those interested in such programs expect incentives in return, especially if they’re asked to share their data. Five in ten people want gifts like wearable devices and 45% want membership for fitness clubs or classes.

Having said that, there is evidence that investing in the health your people drives better business outcomes. A study by the McKinsey Health Institute shows that for every $1 invested in employee health, there’s an incremental economic benefit of $2 to $4.^[2]

Therefore, for business owners, the question isn’t just how much you are willing to invest to ensure return of investment, but what activities and behaviours you wish to incentivise.

Understanding the contributing factors of employee health and vitality

Individual employee health and vitality is a complex combination of various forces, including physical, mental, social and other factors. The trick is finding the right balance.

A 2022 analysis from the McKinsey Health Institute^[3] found that when designing workplace well-being schemes, employers must be careful to address the right problem. Toxic workplace behaviour was found to be the biggest predictor of burnout symptoms and intent to leave, while initiatives that directly address inclusivity and belonging, provide a supportive growth environment, sustainable work, and freedom from stigma are conducive to positive outcomes.

You’ll need to be mindful of the cultural elements of workplaces, which are equal drivers of social, intellectual, mental, and occupational health. You’ll need to remember that health incentive programs should go beyond the purely physical, not overlook potential root causes, and keep an open mind about what solution best fits the problem.

Workplace well-being incentive programs are not one-size-fits-all

Having a comprehensive, vitality-focused well-being strategy means taking a holistic approach that addresses physical, emotional, social, spiritual, intellectual, environmental, occupational and financial health. But while barriers to achieving employee well-being are commonly shared - lack of time, management support, insufficient facilitates, workload balance, and culture^[4] – they apply differently depending on the workplace.

Look at office workers who are estimated to spend 70% of their day sitting^[5]. In these scenarios, the need for physical activity is dire and employers might incentivise regular physical exercise inside or outside of working hours.

Healthcare workers, meanwhile, have slightly different needs due to the mental and physical toll^[6] that the job imposes on a daily basis. Incentive programs might therefore address both aspects via activities such as mindfulness exercises or stress management.

Steps to rewarding better employee health

Improving and maintaining positive employee well-being cannot be a fleeting thought or a quick fix. Just like your own health, achieving good health at an organisational level will need commitment and planning.

Here’s a few steps to get you started on incentivising better employee health:

• Involve employees in planning: Include employees in the design and planning of well-being and incentive programs. It is their health that you are trying to improve, after all.

• Lead by example: Secure the commitment of company leadership to demonstrate the importance of employee well-being. When leaders walk the talk by taking part in these activities, employees are more likely to follow.

• Find the right partners: If your strategy relies on outside partners to facilitate or finance programs or services, make sure you find the right partner that shares your vision for long-term vitality.

• Track and evaluate results: Continuously assess and refine well-being programs to ensure they are meeting employee needs and driving desired outcomes.

• Promote, communicate and give credit: Clearly communicate the benefits and availability of well-being programs to employees through various channels. In certain cultures, acknowledgement is a huge motivator, in addition to tangible rewards. Recognising the efforts of individuals in keeping themselves and their teams healthy can go a long way in encouraging those behaviours and spreading a culture of vitality.

There is no one perfect solution to employee health. While employees might be part of a single organisation, it is critically important to remember that they are individuals with their own unique needs and desires and supporting their well-being will need an equally nuanced approach.

Employers must think broadly about health, placing equal priority on all areas of individual vitality – physical, emotional, social, spiritual, intellectual, environmental, occupational, and financial – and introduce what works best for your team. However, don’t try to do it all at once. Start with what’s most urgently needed based on what your employees tell you.

Incentive programs are proven to drive better outcomes, not only for your employees but also for your business. By implementing such programs for the right reasons, organisations can create a positive, nurturing work environment that attracts and retains top talent.