Why and how does Vacation Wellness™ work to lower employee healthcare costs, improve retention, and increase productivity?

There’s a tremendous body of research and information linking vacations with improved employee productivity, reduced healthcare costs, and lower turnover costs. We have compiled a partial list of salient facts and figures for convenient reference. These factoids appear on other pages in our site, in our blog, or in our white papers, but we’ve listed some of the research results below for those with a strong affinity for raw data.

Stress, Wellness, and Healthcare Costs

• Employers and staff in the United States spend approximately 16% of the nation’s gross domestic product paying for healthcare, 63% more than the world’s next highest spender.
• Health plan premiums have increased an average of 12% annually for each of the past five years, and a recent survey reveals that 100 insurers covering over 78 million Americans expect cost increases to accelerate this year.
• If the current trend continues, total healthcare costs per employee will double within six years.
• Hewitt Associates reports that on the current track, businesses will bear an average annual cost of $28,530 per employee by 2019.
• Wellness programs in the U.S., estimated to be available to employees in 58% of large companies and up to 85% of all businesses, are the most popular and prolific healthcare and insurance cost mitigation measures.
• Perhaps the best indicator of the potential value of wellness programs is that 22 of Fortune magazine’s “100 Best Companies to Work For” – businesses that enjoy national recognition for their desirable benefit packages, including wellness programs – plan to add a total of 87,750 jobs this year.
• Fewer than 10% of smokers, obese workers, and chronic ailment sufferers (diabetes, heart disease, asthma, etc.) participate in available health programs designed to alleviate their symptoms or modify their unhealthy lifestyle habits.
• Traditional wellness programs aimed at modifying blood sugar, obesity, smoking, blood pressure, and sedentary lifestyle fail to target the two costliest causes of healthcare expenditure: depression and stress.
• Over half of surveyed employees claim that they work under a great deal of stress, and 77% indicate that they feel “burnout” on the job.
• Over 40% of American workers describe their job as “very stressful,” and three out of four believe that workplace stress is problematic.
• The Centers for Disease Control link stress to increased risk of cardiovascular disease, musculoskeletal disorders, depression, and workplace injury.
• Studies also correlate stress with suicide, cancer, ulcers, and impaired immune function.
• WebMD reports that stressed employees generate 46% more healthcare costs annually, and depressed staff members cost 70% more to insure and care for than non-sufferers.
• The University of Maryland reports that in a study of more than 46,000 employees, stressed and depressed staff members generated 147% higher healthcare costs than their coworkers.
• A Thomas Reuters study revealed that depression sufferers were more than twice as likely to use short-term disability leave than their healthier counterparts; further, when depressed employees took disability leave, their mean short-term disability cost was three times higher than the control group.
• Corporate Wellness Today reports that severely depressed employees generated five times higher short-term disability costs.
• In contrast, obesity, smoking, high blood pressure, and lack of exercise each only raise costs by 21% or less.

Vacations Improve Health and Productivity

• Three out of four executives regard regular vacations as an essential tool to prevent burnout and improve job performance, and two out of three believe that vacations improve creativity and innovation.
• A Duke Occupational Mental Health report cites destination vacations as an important strategy to reduce stress and prevent burnout.
• Lower stress levels correlate strongly to lower disease risk: men who vacation regularly are 32% less likely to develop heart disease, and women enjoy a 53% reduction in heart attack risk.
• A Framingham study shows that women who vacation more than once every two to five years are eight times less likely to suffer heart attack and premature morbidity than those who vacation only once every six years.
• The Mayo Clinic reports that lower stress correlates with reduced risk of depression.
• Those who take regular destination vacations are two to three times less likely to suffer from costly depression than their non-vacationing coworkers.
• “staycationing” employees reap few of the positive health benefits enjoyed by their vacationing counterparts.
• Traveling to a vacation destination is an important method of generating the necessary distance from work and home stressors to facilitate reflection, foster effective coping, restore primary relationships, and mitigate the physical and mental effects of stress.
• It’s not enough just to enforce vacation time use – your business benefits most when your employees take regular destination vacations.
• Because the concept targets stress and depression directly, and functions as a high-value employee wellness benefit, it is not uncommon for businesses to achieve a 6 to 1 return on a Vacation Wellness™ program investment.

Employees Need Help Taking Vacations

• Despite the correlation between workplace stress and adverse health conditions, two out of three surveyed workers did not take all of their allotted vacation time in 2009.
• Americans give back an average of $76B annually in unused paid vacation time.
• Research indicates that the cost in increased healthcare claims, absenteeism, burnout, reduced productivity, and workforce turnover exceeds $7 for each $1 “saved” through unused employee vacation time
• Why don’t employees take all of their allotted time away? Three reasons dominate:

1. 1. staff members don’t feel they can afford a quality vacation;
   2. workers don’t have the time or inclination to plan a quality vacation; and,
   3. most importantly, employees don’t believe that their employers want them to go on vacation.

• Employees often shorten or skip their vacations altogether because of a pervasive belief that business owners and managers expect high-value employees to regularly sacrifice personal time for the good of the company.
• Executives rarely hold this belief, as most employers understand the value of vacations, yet employees often worry that taking a vacation makes them appear to care too little about their work.
• Over the past 25 years, American workers have added enough hours to fill a 13^th work month every year.

Employee Turnover Costs Sap Profits

• Employee turnover costs are likely at least 10% as expensive as your total salary and benefits outlay. And turnover costs might be as high as 50% of your total pay and benefits expenditure.
• Compdata’s figures suggest that the average voluntary turnover rate across all industries is 14.7%.
• Despite the economic downturn and subsequent unemployment spike, 46% of surveyed companies reported that retention rated “high” or “very high” on their list of cost concerns.
• If your business produces high revenue per employee – which usually corresponds to high staff replacement costs – your turnover burden could reach nearly 50% of your total yearly employee pay and benefits outlay.
• Inc.com reports that replacing a customer service representative earning $18K per year can cost $58K or more.
• More businesses are exposed to high turnover losses than most executives realize. Average revenue per employee in 48 industry sectors exceeds $200K per year, suggesting employee replacement costs greater than 300% of the position’s salary and benefits. This group includes millions of employee positions at thousands of companies nationwide.

• One research firm reports that it can cost between $3.5K and $25K to fill a single $8/hr vacancy
• The average professional firm stands to cut turnover losses by $874K with a 20% turnover reduction. Reducing turnover by 1/3 would garner savings in excess of $1.44M.
• Convincing just one professional to remain on staff for ten years can alleviate three or more individual turnover cycles. If her annual salary is $75K per year, keeping that same employee on staff for ten years can save $675K in turnover expenses during her employment tenure.

Vacation Wellness is a Compelling Employee Benefit

• Salary.com reports that 20% of employees will remain with their employer primarily for an attractive benefits package.
• An equally large group of employees – 20% – claim increased pay as their deciding retention factor.
• Employees often perceive greater value in benefits package improvements than in the same amount of additional pay, particularly when the benefit satisfies a perceived need. For that reason, employee benefits often have far greater retention impact per dollar than pay increases.
• According to a recent survey by Salary.com, listed in order of importance, employees asked for:

1. 1. Professional education and development
   2. The flexibility to work from home
   3. Vacations

• A World Economic Forum survey reveals that without an attractive wellness program, your employees are four times less likely to remain on staff.
• In contrast, among those employees who take a favorable view of the wellness offering, 64% plan to stay with their company for more than five years.
• Vacation Wellness™ is designed to mitigate rising healthcare costs and improve retention by reducing employee stress, preventing depression (statistically the costliest employee healthcare issue), and lowering the risk of heart disease and other serious health problems.
• The Vacation Wellness™ membership program offered by Zoescent enjoys an 89% retention rate over the program’s lifetime. Nearly nine out of ten employee participants remain loyal members.

Want to do more research on your own? See our research sources.

Learn how to implement Vacation Wellness™ at your business.