In an ideal scenario, corporate wellness programs will always lower health costs, enhance productivity, boost employee engagement and reduce employee absenteeism and turnover. But this state of workplace nirvana often feels out of reach. A significant barrier is the ability to motivate behavior change, which influences everything from employees’ daily health habits to their adoption of a wellness initiative. Fortunately, the field of behavioral economics offers new insights that can help address this challenge.
Unhealthy behaviors, such as physical inactivity and poor diet, have contributed to a staggering growth in lifestyle-related diseases, which can be particularly costly for employers. Type 2 diabetes, for example, affects about 30 million Americans, and another 84 million have prediabetes, a condition that increases a person’s risk for developing type 2. The total cost of these diseases tops $300 billion, including indirect costs in the form of lost work days and productive capacity.
With medical costs continuing to rise at a rate of 6 percent, and employers bearing much of the financial impact, many companies are implementing programs to reduce health risk factors and insurance premiums. Wellness offerings include weight loss initiatives, on-site screenings and vaccinations, exercise classes and gym membership reimbursement, as well as educational classes on health management, smoking cessation and stress reduction. Businesses are also leveraging technology to streamline and scale programs across their workforce, putting resources like fitness trackers or health management tools directly into their employees’ hands.
There is a veritable healthy buffet of options. So, how do you know which ones to choose? And how do you make them work for you? Organizations vary in terms of their wellness objectives, workplace environments and workforce demographics, but they can generally move employee well-being in the right direction by aiming for a mix of traditional programs and emerging methods and by taking a cue from behavioral economics.
Making workplace wellness work for your teams
The field of behavioral economics combines psychology and economics to explore how individuals actually behave, as opposed to how they would behave if they were perfectly rational, with unlimited willpower, and solely acting out of self-interest. It considers how people are influenced by the framing of information, their emotions, their identity and their environment.
Behavioral economics sheds light on the drivers behind people’s lifestyle choices, such as what to eat and whether to exercise. These insights can inform how we engage and motivate employees to make healthier choices, and in turn, how to make those healthy choices become healthy habits. And since the efficacy of workplace wellness depends largely upon employee participation rates, concepts from behavioral economics can go a long way towards incentivizing the adoption of a wellness program and ensuring its sustainability.
Framing health engagement as a positive experience
The framing of messages has a significant impact on people’s choices. Individuals make decisions in part based on how they perceive that information. Studies have revealed that the value of an objectively neutral experience can be interpreted differently depending on the way it is positioned.
Behavioral economist Dan Ariely conducted an experiment in which he told a class of students he would read poetry aloud to them. Half of the students were asked whether they would be willing to pay $10 to listen to the poetry recitation; the other half were asked whether they would accept compensation of $10 to listen.
The result? Students who received the positive frame were willing to pay, while those who received the negative frame wanted to be paid. Both groups indicated that for a longer reading, a greater sum of money should be paid. But the framing of the experience determined who should be compensated.
We see the impact of framing in lifestyle choices as well. Research suggests that two separate cognitive systems control our judgment. Another behavioral economist, Daniel Kahneman, describes these systems as fast thinking (emotional) and slow thinking (rational). Thought processes in the former system tend to be automatic, intuitive and impulsive. By contrast, thought processes in the latter system tend to be deliberate, reflective and effortful.
Most of our actions, like what we eat, are often governed by fast thinking. The advertising industry adroitly targets fast thinking with emotional appeals and colorful campaigns to sell products like soda and junk food. But many public health messages are framed through a lens of statistics, data, charts and warnings.
In a study, Frederick J. Zimmerman, Ph.D, analyzed how for-profit fitness companies promote healthy behavior through a positive frame (“Get Game! Have Fun”), whereas public health authorities tend to employ a frame of obligation (“Regular physical activity is important for good health”). According to Zimmerman, shifts in message framing may fundamentally alter our understanding of an activity from a burdensome duty to a rewarding experience.
These studies tell us that health messages should emphasize personal achievement, social interaction and fun. Corporate wellness programs should target fast thinking with positive framing and methods such as colorful graphics, humor, stories, games and instant gratification through rewards.
Living for the present
People tend to place a higher value on the present, discounting the impact of future costs and benefits. For example, the fun of enjoying a double cheeseburger is now, while the adverse effects on one’s health come later. This mentality also works against prevention efforts: flossing now might help avoid an unpleasant dentist visit, but not until sometime in the future. When time separates the costs and benefits from a behavior, lifestyle change becomes difficult.
The effects of financial incentives on weight loss were analyzed in one study where participants who met their goals became eligible for daily lottery prizes, with frequent small prizes and occasional large rewards. After four months, the incentive group had lost more than three times more weight than the control group (14 lb vs. 4 lb).
Workplace programs should bring the costs and benefits of lifestyle change closer together to counter the impact of “future discounting.” Providing instant rewards and frequent positive feedback can be helpful, as can highlighting the short-term benefits of healthy behaviors, such as improved energy levels, instead of longer-term benefits, such as reduced risk for diabetes.
Sharing the wellness
Behavioral economics models assume that people are motivated by more than pure self-interest. Altruism is an important motivator behind health-related behaviors, such as blood and organ donation, as well as many group- and peer-based interventions. In addition, incentives benefiting our friends can be several times more effective than standard, individually targeted incentives.
Workplace wellness programs can harness these concepts by enabling interaction and peer support among members in groups. Social network incentives, in which group members benefit from an individual’s efforts, and altruistic rewards, such as rewarding efforts with gifts that benefit a local charity, can motivate participants to continue their engagement in a program. In effect, teamwork, health promotion and corporate social responsibility can mutually reinforce one another to the benefit of an organization, its employees and society.
Adapting to employees
Programs to raise awareness and promote well-being must meet the needs and preferences of the workforce. In particular, wellness programs must take into account potential barriers such as health literacy €“ the ability to make informed decisions based on one’s understanding of health information.
The National Assessment of Adult Literacy found that nearly 90 percent of adults lack proficient health literacy. Low health literacy is associated with higher rates of chronic conditions, more frequent preventable hospital visits, and less use of preventive services. Each of these scenarios contributes to higher health care costs.
Programs that equip people of all health literacy levels with the knowledge and skills to manage their health can help employees change behaviors and avoid costly complications. By removing barriers to engagement in a wellness program, employers can increase participation and efficacy across the workforce.
The returns of wellness initiatives are evident in a healthier and happier workforce and can be measured in a variety of ways. Employers can see direct savings in the form of lower health costs as well as productivity gains. Lowering the risks of lifestyle-related disease and stress-related burnout can reduce absenteeism, presenteeism and, in the most serious cases, employee turnover. With regular evaluation of wellness programs, employers can also identify gaps and plan new strategies or interventions to improve efficiency and effectiveness.
Technology also has a role to play in measuring success. For example, giving employees access to mobile applications and web-based programs can both engage them and let them monitor their progress on the way to wellness. Putting the power of information directly into the hands of the workforce can encourage them to more actively manage and track their health status over time.
Ultimately, corporate wellness starts with your employees, and knowing them is the key to success for any initiative. Applying concepts from behavioral economics can help motivate them towards healthy habits and away from the signs of lifestyle disease and burnout. And with the right programs and tools in place, they can feel empowered on their journey to better health and wellness.