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March 7, 2019

Workplace Wellness Programs: One Size May Not Fit All

MHT Partners  | Business & Information Services Investment Bank

2019 is well underway, and businesses have had the past few months to acclimate to new legislation, policy updates and operational shifts that constantly disrupt and reshape our corporate climate. Once a foreign, idealized concept, wellness programs have become a staple in the discussion surrounding company culture and workplace health over the past decade. According to a recent Welltok survey, over 60% of respondents rely on their employer for at least one aspect of their health. This responsibility has forced executives and HR professionals to stay abreast of the ever-evolving nature of workplace wellness to ensure that employees reap all of the benefits offered by participation in these programs. While the introduction of broad, firmwide initiatives has created “healthier” workplaces, many of these programs offer minimal value for employees who seek targeted, individualized care for their personal, non-holistic needs.

For decades, the focus of workplace wellness policies was centered on employee physical health and safety, but in recent years, the definition of “wellness” has expanded to include initiatives to promote employee social and emotional wellbeing. The challenge in instituting these programs is customizing the services to meet the objectives of both the organization and the employee. Just as health needs differ from person to person, so does willingness to engage, which can complicate the process of creating an effective program.

The personalization process typically begins with creating a unique medical profile for the employee. Biometric screenings (cholesterol and glucose readings, blood pressure measures, etc.) are regarded as baseline metrics needed to understand an employee’s wellbeing and fitness level. Given the confidential nature of this information, delivering feedback through personalized (and private) modes of communication (in-person meetings, video/phone calls, etc.) is a crucial step in supporting and encouraging employees to continue participation in the program. Plans to establish and maintain healthy lifestyles can be designed and administered by coaches who create and foster relationships with employees based on trust and accountability. Although contingent on employee engagement, implementation of these programs can ultimately yield higher profits, due to increased worker satisfaction and productivity and less lost time due to illness and injury.

With the termination (as of 1/1/19) of the Equal Employment Opportunity Commission’s wellness rule, participation in workplace screenings is now truly voluntary, eliminating employees’ potential financial incentives. Long associated with the generic questionnaires commonly issued at the onset of one’s employment, these traditional programs failed to produce tangible benefits as results were often collected and analyzed in a reactive response by employers who then would institute a one-time, general solution. Employees favor the rule change given the ineffectiveness of prior programs and concerns over confidentiality, pushing wellness programs into an uncharted territory. While privacy and data security are valid concerns, the value proposition of these programs hinge on employee engagement.  Best practices cannot be established without testing critical mass, burnout cannot be avoided without identifying common sources and personalization is just an idea until the employee endorses the program. The “sweet spot” is a resource that offers individualized benefits, rewards, plans, etc., for employees without jeopardizing the security and confidentiality of the collected data. Development of an encrypted and dynamic platform akin to what’s described above will require the integration of the latest advances in the engineering and technology fields which has only recently garnered the support and attention from the private capital community.

As the “one size fits all” approach to wellness is phased out in favor of personalized programs, funding has poured into the space by investors who hope to obtain early positioning in a market expected to reach $85 billion by 2025. Recognizing the opportunity to assist with the evolution of customizable, cutting-edge enterprise wellbeing solutions, many private equity groups have channeled funding into companies positioned at the forefront of this transformation, such as Aduro, Inc. (ABRY Partners), Limeade, Inc. (TVC Capital) and meQuilibrium (Chrysalis Ventures).

MHT Partners, a leading business services investment bank with extensive experience partnering with companies offering employee wellbeing solutions, believes that personalized programs lead to healthier and more productive workplaces. If you would like to learn more about MHT’s business services advisory practice, please e-mail Mike McGill (mmcgill@mhtpartners.com), Kevin Jolley (kjolley@mhtpartners.com), or Briton Burge (bburge@mhtpartners.com).

Sources:
Welltok, New Research Reveals Most Employees Get Generic Wellbeing Support
Benefit Advisors Network, Legal Alert: Court Vacates EEOC’s Wellness Program Incentives Rules Effective January 1, 2019
Grandviewresearch.com
CapitalIQ.com

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