US Corporate Wellness Market - Industry Outlook and Forecast 2021-2026

INDUSTRY INSIGHTS

The US corporate wellness market size is expected to reach close to USD 19 billion by 2026, growing at a CAGR of  9% during the forecast period. The outbreak of the COVID-19 pandemic in the US has infused high stimulus into the US corporate wellness market. With the workforce population largely affected by one or more chronic diseases or other comorbidities, it warranted supporting their health and wellbeing. It set high expectations from employers, driving companies to proactively manage population health with their programs. While businesses have found ways to protect their employees physically - providing tech support to aid with the social distancing to introducing new leave policies - the disruption caused by the virus in terms of mental health is expected to continue. From helping employees adjust to the new normal and be nimble to reducing health risks, employers are focused on preventively and proactively managing the same. This is expected to increase access to wellness and expand or improve the quality of already existing programs.

SNIPPETS

• The fitness services segment is expected to grow at an impressive CAGR of over 9.4% during 2020­–2026 due to the introduction of high-intensity interval training, tree workouts, and P.E-style lessons.
• The large private sector business segment is projected to observe an incremental growth of over $3 billion by 2026 on account of the increased integration of technology with data to create personalized experiences.
• The recurring revenue segment is likely to reach a revenue share of over $15 billion by 2026 as wellness programs are becoming more outcome and patient-based, driving participation efficiency, and increasing recurrent revenues.
• The onsite segment is expected to observe an incremental growth of over $7 billion by 2026 as onsite services not only help employers to keep the cost in check but also offer convenience to employees.
• Participatory programs are likely to achieve a revenue share of over $12 billion by 2026 driven by the level of flexibility and preclude incentivizing outcomes.

US CORPORATE WELLNESS MARKET SEGMENTATION

This research report includes a detailed segmentation by

• Program
• End-user
• Revenue Model
• Delivery Model
• Incentive Program
• Type
• Industry
• Geography

INSIGHTS BY PROGRAM

The HRA segment is growing at a stable pace with preventive care gaining importance due to the increased healthcare costs and focus of organizations to inculcate healthy habits among employees. Vendors are working on making HRA programs more effective by integrating them with other programs, which provide the opportunity to address workplace ergonomic concerns. The use of biometric screening is increasingly becoming a large part of HRA processes, thereby improving the delivery of wellness programs.

In wake of the COVID-19 pandemic, there has been a renewed focus on weight and nutrition, bringing to light the link between the consumption of diets high in sugars, saturated fats, and refined carbohydrates. While 85% of the population is putting efforts to lose weight in the US, large scale organizations offer nutrition and weight management programs, with over 75% of employers providing lifestyle management programs. Vendors are increasingly offering services online with web-based nutrition and weight-loss programs and seminars via healthcare professionals and nutritionists. The use of pedometers and telehealth weight loss programs is gaining traction. However, employers are increasingly covering smoke cessations, stress management, and alcohol & drug rehab services under their wellness programs.  

INSIGHTS BY END-USER

The rise in corporate profits is increasing discretionary incomes for employers, thereby driving up their spending on corporate wellness programs. A major trend gaining momentum is being inclusive. While diversity is a hallmark of workplaces, providing diverse employee wellness programs is a natural choice. Revenues for this segment are expected to come from the integration of technology with data to develop personalized experiences.

The increasing healthcare cost is primarily driving medium-sized private businesses to implement wellness programs. HRAs, personalized health management, and biometric screenings are the most popular offerings in this segment. Financial management programs are expected to grow at a rapid rate during the forecast period. With more employees looking for help to navigate personal and financial challenges, causing employers productivity losses, the demand for these programs is growing.

INSIGHTS BY REVENUE MODEL 

While wellness programs associated with recurring revenues require a strong connection and constant motivation, those that are associated with seasonal warrant a one-time incentive that ramps up participation. However, recurring revenue programs are more predictable and work on a long-term strategy that warrants consistent investment. The recurring revenue segment is served by nutrition and weight management programs, tobacco cessation, employee coaching, and online wellness portals. Since dropout is common in this market, vendors focus on rotation or creation of initiatives throughout the year to keep employee interests soaring and participation intact, driving the growth of this segment. Nearly three-fourths of the revenue from the season revenue segment comes in the second half of the year. With nearly 20% of US nationals catching the flu on an annual basis, costing a business up to $90 billion, employers have raked up their onsite clinic support. The use of medical self-help programs increases during the second half of the year owing to the onset of cold-related illnesses and allergies.

INSIGHTS BY DELIVERY MODEL

To provide fully integrated services that ensure maximum participation and engagement, vendors provide a host of both onsite and offsite services. While some programs are exclusively delivered via one model, others are delivered via a combination of the two. The onsite market for corporate wellness is undergoing a radical shift as the coronavirus pandemic has introduced a wave of changes, some of which are expected to stay put even once the pandemic dies down. Larger companies are likely to offer onsite services as they have access to more resources in terms of budgets, space, and personnel, which is driving the demand for onsite services.

Offsite services are more prevalent among small and medium-sized businesses and non-profit organizations. Teambuilding programs, lab and gym membership vouchers, health fairs, at-home sample collection kits, and remote screening are commonly provided offsite services. With a growing number of employees working from home, employers are increasingly looking at offering employees provisions to be screened at home or local clinics. Technology and data collaborations between vendors and specialists in the healthcare sector are increasingly being leveraged to improve decision-making and expand into new areas of wellness.

INSIGHTS BY INCENTIVE PROGRAM

To improve the benefits of wellness plans supported by incentives, some employers are looking at behavioral economics to enhance employee engagement during activities for health management. Vendors are using technology in incentive programs to motivate employers to drive participation rates in wellness programs. Vendors are designing incentive programs that are in sync with the goals and objectives of the company. Hence, they are popular with first-time employers that use them as an entry point into the workplace wellness realm. As a high number of employers get on board the corporate wellness bandwagon, participatory programs are expected to gain traction. They are also specifically witnessing success among small-scale workplaces.

Health-contingent wellness programs have witnessed a lot of momentum among employers over the past couple of years. A major reason for their uptake is that outcome-based incentives bear a strong conceptual resemblance to performance-based pay systems. These programs have the highest influence on vulnerable workers that constitute those with low-wage workers, disabilities, workers from other ethnicities, and senior workers.

INSIGHTS BY TYPE

As the safety, wellness, and protection of employees have become a priority during the COVID-19 pandemic, workplace wellness is becoming a corporate responsibility, driving the use of services. However, the demand has deaccelerated slightly, more so now, as the pandemic shifts focus on creating healthy habits. In 2019, technology solutions witnessed a massive surge as several tools and applications were released and became easier to implement. Further, while reducing healthcare costs has been a high focus for implementing workplace wellness programs, employee engagement is becoming a catch-all and buzzword for corporates. This is shifting the wellness focus on devices and software, further fueled by technology-influenced convenience

INSIGHTS BY INDUSTRY

The pandemic is accelerating the need for a digitally connected world, driving the media, technology, and telecommunication sector into a high-growth pace. The industry is anticipated to witness long-term increased spending. The need for businesses in every sector to adopt high resilience and innovative strategies is bolstering the growth of wellness programs. Media and technology companies are more inclined to offer a cross-section of services and alternative resources for employee wellness. Since media and technology companies are often more heavily digital-oriented, work-life balance programs are highly prioritized in the segment.

In midst of the COVID-19 pandemic, the healthcare industry has been less affected, reducing the inclination to decrease the spending on employees’ wellbeing. The market contributes to large volumes considering it is among the largest employers in the US. Workplace wellness programs in healthcare companies and systems have been going strong in the country. According to the CDC, 83% of hospitals in the US offer these programs. Health screenings are among the most popularly offered programs, followed by stress management, EAPs, mental health services, counseling for smoking cessation, health coaching with hospitals offering these falling in the range of 30–60%.

INSIGHTS BY VENDORS

ComPsych, Wellness Corporate Solutions, Virgin Pulse, and Provant Health Solutions are the major key players in the US wellness program market. Since the Mid-Atlantic, West, and Southwest regions have the maximum number of large businesses, the probability of setting up wellness programs is high. Several vendors are setting up bases in these regions. In addition, areas that have a dense population and house major business centers such as New York, Texas, and California, along with states that have headquarters of large corporations such as Illinois are likely to be more lucrative for market vendors.

The US corporate wellness market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

Programs

• Health and Risk Assessment (HRA)
• Nutrition and Weight Management
• Smoking Cessation
• Fitness Services
• Alcohol and Drug Rehab
• Stress Management
• Health Education Services
• Financial Wellness
• Others

End-user

• Large Private Sector Businesses
• Medium Private Sector Businesses
• Public Sector Companies
• Small Private Sector Businesses
• Non-profit Organizations

Revenue Model

• Recurring
• Seasonal

Delivery Model

• Onsite
• Offsite

Incentive Program

• Participatory Programs
• Health-contingent Programs

Type

• Services
• Technology

Industry

• Media and Technology
• Healthcare
• Financial Services
• Manufacturing
• Retail
• Others

Geography

• US