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Justification for Investing In Wellness Programs Term Paper

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Updated: Apr 30th, 2019


Financial investment plays a significant role in determining the success of every organization. Investment decisions can either lead an organisation to success or dip it into losses. In order to achieve positive results from financial investment, an organization must consider the implication of such decisions on its financial status.

Some investment may even lead an organization to total failure. Therefore, it is always necessary to consider the return on investment before making the final decision on investment. The returns on investment are the major criteria that determine whether it is justifiable to take a particular course of action or not.

One of the main areas where an organization needs to invest on is on its employees. The human resource is one of the most important assets in an organisation. The profitability of an organisation is significantly determined by employees’ productivity. The performance of other resources within an organization is also determined by the human resources. For instance, the machines are controlled by the human resources.

This implies that poor performance of human resources will affect the performance of the entire organisation. Therefore, an organization must consider investing on its employees in order to promote its overall productivity. In the modern world, the competitive advantage in many companies is attributed to their ability to invest effectively on their human resources; the fact that has led to an increase in their productivity.


As already noted, many organizations are gaining more awareness on the importance of investing on employees. One of the main areas where an organization can invest on its employees is on fitness or wellness programs. These are programs that are aimed at improving the physical fitness among the employees.

In the contemporary world, many organizations have recognized the importance of investing on wellness programs in its operations. This comes as a result of realization of the importance of the human resources in determining the organization’s productivity. In the contemporary world, the need for healthy human resources has significantly increased as many organizations seek to develop their competitive advantage.

This is more so in the modern business world that has been characterized by a very high level of competition. Wellness programs as a way of reducing costs therefore becomes a critical source of organization’s competitive advantage. The following discussion seeks to find out whether the wellness programs are reasonable for an organisation bearing in the mind that any financial investment must add value to an organisation.

In the modern world, many companies have been calculating the losses they have incurred through medical costs and other costs associated with employees’ health complications. Recent studies indicates that majority of organizations are spending approximately 50 percent of their profits compared to 7 percent about 30 years ago (Sullivan, 2011). This indicates that companies are losing a lot from health costs on employees.

In connection to this, many organisations are making all the efforts to come up with the most effective measures through which they can cut down these costs without necessarily having to fire employees. Employers are more concerned about implementing a strategy that will help realize these goals without threatening their ability to attract and retain employees’ within the organisation. This is one of the factor that has led many organizations seek for measures of increasing employees’ health within an organization.

Employers today are seeking for the ways to conserve their resources. This follows a significant increase in the overall production costs. For instance, the oil prices have been escalating over the recent past. This has significantly increased the overall production costs hence reducing the profit margins. As a result, many organisations have been seeking for alternative ways to increase their profit margins. Wellness programs are one of the strategies that many organizations has been employing to mitigate the increasing operational costs.

Several studies have been conducted over the past in an effort to gauge the impact of wellness programs on an organization’s performance. However, it is not really possible to estimate the exact impact of wellness programs because they are not quantifiable.

However, several studies have revealed that the exercise has led to a drastic fall in operational costs in many organizations that has fully integrated the program in their operations. Wellness programs are aimed at improving employees’ health consequently reducing the costs associated with employees’ health issues.

Wellness Programs and Returns on Investment

In every investment made by an organisation, it is expected to yield positive returns. Over the past, the issue of investment on wellness programs has been a critical one within organizations. Some people have argued against the idea on the ground that it will only increase organization’s costs. However, many people have realized the importance of wellness programs in the organization.

Over the past years, several studies have revealed that the number of companies investing on wellness programs has significantly increased. Research reveals that companies offering wellness has recorded a continued financial stability. This can be attributed to the reduction in heath costs when an organisation adapts wellness programs.

Wellness Improves Employees’ Productivity

Increase in the employees’ productivity is one of the advantages associated with wellness programs within an organization. The more productive the employees are the higher will be the organization’s returns on investment. Wellness will lead to more energetic employees who are capable of carrying out operations efficiently. This is more so on employers who are usually involved in operations that require more physical strength.

This exercise also leads to increased mental strength hence increasing the overall level of productivity. Through exercising, employees increase the level of oxygen absorption into their bodies. This makes employees to feel vibrant hence increasing the employees’ ability to think. Without wellness programs, employees may tend to work for a few minutes and then get tired. This lowers employees’ productivity.

Wellness programs also help an organisation to reduce the expenses incurred in health care on employees. Current studies reveal that cost on health is the main obstacle to growth, profitability, and competitiveness within an organisation (Mathis and Jackson, 2011). Due to the rising costs on health care on employees, the fraction of financial resources assigned for growth strategies in many organizations has significantly reduced in the past.

High operational costs within an organisation are also associated with poor levels of competitiveness. For instance, an organisation with higher costs will be under priced by the organisation incurring a relatively lower cost. Therefore, health employees help both an individual and an organisation to save on the money spent on health insurance.

Through wellness programs, the employees’ health conditions increases significantly and therefore the chances of falling ill are limited. In other words, wellness programs leads to a significant cut on the costs incurred on employees’ illnesses. In the contemporary world, health care and premium costs has significantly increased. Therefore, wellness programs can be adapted as one of the measures to mitigate this risk within an organisation.

It will help both employees and organizations to decrease their expenses on health care significantly. Past studies has indicated that company’s expenses on medical costs falls by more than three times the amount invested in the wellness programs (Bernardin, 2010). This is enough reason to prove that every organisation must consider investing on wellness programs. The main goal in every organisation is to maximize profits and minimize costs.

Wellness programs are also associated with creativity. Healthy employees tend to be active both physically and mentally. Mental activity implies that employees will be able to come up with new ideas that can help in improving the organization’s performance. In other words, wellness programs can help in improving innovativeness within an organisation. This help in developing the organization’s competitive advantage.


Wellness programs within an organisation can also help in reducing the level of employees’ absenteeism (Heneman, Judge, and Mueller, 2011). Many organizations have been experiencing a substantial decrease in their profits margins from increased number of sick days and employees’ turnover. The fact that the costs of recruitment has significantly increased only makes the matter worse.

However, by promoting participation in wellness programs, an organization is able to reduce the level of absenteeism. Those employees who are engaged in wellness programs manage to improve their immune systems. As a result, such employees will have less sick days. Employees’ absenteeism is one of the ways through which many organizations are incurring a high level of costs. This is because employees will be paid for the days they have not worked.

The organisation may take a long period to recover such losses. By investment in wellness programs, an organisation can therefore be able to mitigate the rate of absenteeism related to health issues. In the modern world, many organizations are losing a substantial amount of money through employees’ absenteeism. This has gone to an extent of dipping some of organizations into total losses.

Therefore, it is advisable for an organisation to invest on wellness programs in order to avoid such losses. By investing on wellness programs, an organisation is able to reduce their sick days and therefore will be present most of the time. Wellness programs will also help in reducing the work strains. Investment on wellness programs is negligible compared to the costs mitigated by reducing sick days and work strains.

In the past years, several studies have been conducted on the importance of investing on wellness programs within an organisation. However, it is not yet clear on which aspects of wellness programs are best for an organisation. However, this cannot be easily generalized because every employer has their own culture and demographics that determines their most feasible aspects of wellness program. The returns on investment on wellness programs is however positive.

Recruitment and Retention

Another importance of investment in wellness programs in an organization is promotion of employees’ retention. By providing wellness programs, the level of employees’ satisfaction can be increased significantly. This promotes employees’ retention by providing disincentives to leave.

Employees’ retention helps an organisation to retain the top performing employees within an organisation (Mathis and Jackson, 2011). This helps in improving the organization’s overall performance. This helps an organisation to develop its competitive advantage over its competitors. For instance, an organisation with more productive employees has lower production costs per unit.

Reduced Work Place Injuries

Another important contribution of wellness programs within an organization is the reduction in injuries that usually takes place within an organization. In some cases, an organization may incur a significant amount of money in compensating employees’ injured within the organisation (Walsh, 2010).

Several occurrences of such issues can therefore threaten the financial stability within an organizing. However, injuries within an organisation can be mitigated through wellness programs. In order to avoid such charges, it is advisable for an organization to adopt wellness programs in its operations.

Increased Morale

In the contemporary world, the need for human resources satisfaction has significantly increased. This is because the human resources have become an important component in determining the organization’s profitability. Therefore, many organizations are putting more emphasis on those programs that leads to an increase in employees’ satisfaction.

One of the ways through which an organization can increase employees’ satisfaction is offering services like wellness programs. This helps in increasing employees’ morale consequently increasing their performance. Motivating employees increases their productivity to a greater extent.


From this discussion, it is evident that an organisation can significantly reduce its operational costs by investment in wellness programs. Although it requires an organisation to invest a substantial amount in wellness programs, these costs are less than the costs incurred by an organization in the absence of such programs.

This implies that investment in wellness programs is justifiable. It leads to the overall reduction in its operational costs. For instance, it leads to reduction in insurance expenses. Therefore, it is advisable for every organisation to invest on wellness programs in order to maximize their profits.

It has become clear that health costs are one of the major obstacles to organization’s growth and profitability. This implies that all strategies directed towards the reduction in health costs should not be an option but a requirement in efforts to reduce such costs. Therefore, an organization’s investment on wellness programs cannot be questionable.

This is because it is directed towards the reduction on health costs. In order for the wellness program to be effective, it must satisfy both the management and the personnel’s goals. In this case, employees must be in a position to identify their current status and the need for having fitness and being healthy.


The above discussion has clearly shown that investment in wellness programs is really a good financial investment program. By investing in wellness programs, an organization is able to achieve optimum benefits from employees. Through wellness programs, an organization can reduce the rates of employees’ absenteeism significantly. This is because employees’ resistance to diseases will be improved through such programs.

Wellness programs also lead to a notable reduction in insurance costs. By maintaining a healthy population, an organisation will be in a position to reduce the costs incurred in covering employees’ health issues. This helps in reducing costs hence maximizing the organization’s profits.

In addition, an organization can increase the overall productivity of employees through wellness programs. Healthy employees tend to be more productive and hence contribute more to the organization. Therefore, it is advisable for an organisation to invest on wellness programs.

Reference List

Bernardin, H.J. (2010). Human Resource Management: An Experiential Approach. New York: McGraw-Hill.

Heneman, H.G., Judge, T. and Mueller, J.D. (2011). Staffing Organizations. 7th ed. Middleton, WI: Mendota House.

Mathis, R.L., and Jackson, J.H. (2011). Human Resource Management. (13th Ed). Mason, OH: South-Western Cengage Learning.

Sullivan, S. 2011. Wellness Programs. Web.

Walsh, D.J. (2010). Employment Law for Human Resource Practice.(3rd Ed). Mission: OH: South-Western Cengage Learning

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