Most US employers say they are prioritizing improving their employees’ mental health.
Popular interventions like partnering with companies that promise resilience training and mindfulness practices may not help employees as much as advertised. A new study published in the Industrial Relations Journal found that employee wellness initiatives lead to no reliable difference in mental well-being.
The study analyzed data from 2017 and 2018 cross-sectional surveys of data collected at employee and organizational levels in UK workplaces. Its findings suggest no reliable difference in mental well-being between individuals who participated in programs like relaxation practices, coaching and well-being apps.
Employee wellness programs like HealthFirst, FitMind and Vitality promise cost savings for employers through coaching programs and digital tools.
Volunteering was the only type of intervention that actually impacted workers’ well-being.
“Volunteering opportunities initially appear distinct from the other interventions, but are found to improve workers’ well-being through increased sense of purpose, accomplishment, social resources and recovery,” the study’s authors wrote.
The rising cost of health benefits may be spurring the popularity of employee wellness programs among American employers. Health benefit costs rose 5.2% in 2023 and expanding or enhancing employee assistance programs (EAPs) was employers’ most common action item in 2023.
As employers seek to increase ROI, companies try to find niches within the employee benefits industry.
For example, “human support” company LifeGuides claims to be different from an EAP or mental health platform because of its one-to-one telehealth session with “empathetic guides who have been through the same life event ahead of you.”
The company recently raised $16.5 million, according to SEC documents.
A report by Mercer found that about 60% of employers who took action to improve their EAPs said they found the changes to be effective or very effective, data that is at odds with the study published in the Industrial Relations Journal.
“The results in this article pose a challenge to the popularity and legitimacy of individual-level mental well-being interventions like mindfulness, resilience and stress management, relaxation classes and well-being apps,” the study’s authors wrote.
Employee wellness programs have scored significant funds, notably in the cases of unicorn mental health care benefits companies Lyra Health and BetterUp.
Burlingame, California-based Lyra raised $187 million in a Series E funding round in 2021. The company’s site promises that its workshops and online tools will address stigma and employee burnout while embracing diversity, equity and inclusion.
Lyra reports that 88% of its members improve with care and that companies save $2,300 per member, per year in health care claims costs. The company differentiates itself from traditional EAPs by providing fast access to high-quality care and a great member experience.
BetterUp, headquartered in San Francisco, raised $125 million in a Series D funding round in 2021. The company claims to be “the inventor of virtual coaching and the largest mental health and coaching startup in the world.” Its customers include Chipotle, Salesforce and Chevron.
BetterUp reports that 90% of its members experience reduced stress, along with a 149% increase in resilience, a 181% improvement in focus, and a 222% increase in team agility.
Despite the increased popularity of employee wellness programs, employers are growing wary of per-member per-month contracting. Organizations instead want clear returns on investment.
“Employers have become much more interested in this space and want to provide solutions that bring value,” Jason Richmond, vice president of sales solutions at Headspace, told Behavioral Health Business in Feb. 2023. “It’s no longer good enough to just have a benefit that people want to access or that you can see the utilization of, and you can even say that people are satisfied with.”
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