U.S. Corporate Wellness Market - Industry Outlook & Forecast 2023-2028

MARKET OVERVIEW

The U.S. corporate wellness market size was valued at USD 12.12 billion in 2022 and is expected to reach USD 25.00 billion by 2028, growing at a CAGR of 12.83%. Corporate wellness programs promote employees' physical, mental, and emotional health. These programs can include a variety of initiatives, ranging from simple resources like health education materials to more comprehensive offerings like fitness centers and mental health counseling. One common component of corporate wellness programs is health screenings and assessments. These may include basic physical exams, blood tests, and other diagnostic tests to identify potential health issues or risk factors. Based on the results of these assessments, companies may offer support and resources to help employees manage their health, such as fitness programs, nutrition education, or smoking cessation programs.

Vendors in the U.S. corporate wellness market are also looking at new ways to deliver corporate wellness programs using the potential of digital technology to host virtual screenings and offer information via company portals. Moreover, it is increasingly being guided by the roots of CRM as employers look to dynamically tailor their programs and provide an experience that is personal and individualized. For instance, targeting offerings based on employee health risks and conducting feedback surveys.

VENDOR & EMPLOYER RIGHTS, OBLIGATIONS, & PRICING MODELS

It is common for employers to associate with third-party vendors to plan and implement their wellness programs despite having the resources to hold these programs, a simple reason being certain fringe benefits. Vendors in the U.S. corporate wellness market offering and implementing these programs for large employers receive a program management fee that is structured based on the type of wellness program segments, such as the following:

• Each member has a price/month fee depending on the number of participants.
• A tiered monthly fee is based on the number of employees in a group. For instance, USD 5,000 for under 50 employees.
• Fee-for-service payments (e.g., for flu shots, biometric examinations).

Vendors must maintain the back-end aspects of wellness program services, including technical, administrative, IT resources, and data analytics. The front-end aspects include offering educational programs and doling out newsletters. Vendors in the U.S. corporate wellness market need to assemble a team that includes licensed healthcare practitioners, paraprofessionals, support staff, administrators, vendors for diagnostics and clinical lab tests, and delegated third-party vendors for digital applications, among others, to facilitate these programs. Employers further add to this complicated system by offering easy access to healthcare services through health clinics instead of wellness programs to solve high deductible health plan choices. These health clinics include wellness programs as part of a more all-inclusive set of healthcare services ranging from first aid to special care to auxiliary services.

WORKPLACE MENTAL HEALTH & WELLBEING

Workplace mental health & wellbeing acts as one of the critical priorities for public health. It consists of various impacts on the health of individual workers and their families, organizational productivity, and bottom-line for businesses and the economy. In the US, more than 160 million people are a part of the workforce. Usually, people succeed by contributing positively to the workplace and maintaining their overall physical and mental well-being. This creates a huge responsibility and an opportunity for organizations or leaders to support the health and well-being of their workers.

The pandemic has accelerated the evolution of workplace health and well-being with a broad recognition, appreciation, and strong relationship across the work environment, community, culture, and health. With this, the US Public Health Services initiated the Surgeon General’s Framework for Workplace Mental Health & Wellbeing, an initiative to change the well-being of the organizational workplace. This includes some essential components to address workplace mental health and well-being based on human needs; such factors are projected to support the U.S. corporate wellness market during the forecast period.

MARKET TRENDS & OPPORTUNITIES

Mental & Physical Health Awareness on Social Media
The way social media has evolved over the last couple of years and subsequently deepened its roots in various sectors is commendable. Social media is now synonymous with wide reach and spreading awareness regarding various issues. It has become a widely used platform for a wide and varied population due to its popularity and ease of use. It is one of the fastest ways to reach the masses and spread the word.

Several social media platforms fit various purposes and people. If Snapchat is widely popular amongst youngsters, LinkedIn can connect to a clan of professionals. Nevertheless, certain topics are relevant to the entire population irrespective of profession, background, interests, or culture, such as wellness, be it mental, physical, or both. Given the popularity amassed and the amount of time an average individual spends in a day scrolling through social media, it has perhaps become the best and the fastest way to spread awareness regarding mental and physical wellness. Using relevant hashtags can turn a discussion into a trending topic, thus gaining popularity and the necessary attention from corporate wellness vendors.

Broad Shift in Wellness Perspectives
Employees in the U.S. have changed the way they think about wellness. As new generations enter the workforce and technology advances, a new perspective is evolving wherein making healthy choices is not restricted outside work hours. Incorporating workplaces' gyms, games, and nap rooms reflects the changing attitude. The office has changed from a traditional utilitarian space to an environment where employees thrive and bring out their best. Once constricted to the home environment, wellness is increasingly a part of the workspace that promotes long-term health solutions as people spend a good portion of their day at work. Employees are growing more aware of what work does to them regarding burnout and are looking within the workspace to control stress levels. Many employees look for inspiration at work to stay fit, make new healthy habits, and alter old unhealthy ones. The office provides structural support that is more difficult to attain at home, so wellness programs have good scope for growth.

MARKET RESTRAINTS

Remote Work and Increased Surveillance by Employers
As the pandemic rolled around and remote working became commonplace, most wellness programs usually built around employee presence in the office began to fail. Since a lot of the wellness culture is built on-site, wellness programs for remote employees did not succeed during the pandemic and impacted the growth of the U.S. corporate wellness market. Many employers were unprepared to manage their remote workforce. Another issue has been that many programs are casual and ad hoc, allowing employees to engage with them to varying degrees. Since organizational culture is tied to morale, flexibility, cooperation, and collaboration, this has increased the lack of trust among employers. This, in turn, keeps employees from setting work boundaries for themselves and prioritizing self-care.

SEGMENTATION INSIGHTS

INSIGHTS BY PROGRAM
The U.S. corporate HRA wellness market accounts for the largest share of the program segment. HRAs constitute questionnaires that are used to identify high-risk behaviors. With preventive care gaining more importance due to the rapid increase in healthcare costs and more organizations focusing on creating a culture of health, the market is expected to grow at a stable pace. HRAs use cases have increased, particularly among large employers offering health benefits, with over 60% providing employees with HRAs and pairing them with financial incentives to encourage health information disclosures. The U.S. corporate wellness market is marked by diverse players that hinge on data to pave the way for employees. For instance, Know Your Number offers a multi-dimensional HRA-patented technology that edifies individuals on how risk factors influence their overall health. It provides personalized resources and tools for risk reduction, prevention, and goal setting to achieve healthier outcomes.

INSIGHTS BY REVENUE MODEL
The U.S. corporate wellness market by revenue model is segmented into recurring and seasonal revenue. Despite the recurring revenue segment having the largest market share, the seasonal revenue is expected to project the highest CAGR during the forecast period. Seasonal and recurring revenues vary with how programs are being implemented and their time of participation. They are interdependent as programs implemented seasonally affect/lay the ground for seasonal ones. The recurring revenue segment is served by nutrition and weight management programs, tobacco cessation, employee coaching, and online wellness portals billed on an employee basis. Since dropout is common in this market, vendors focus on rotation or the creation of initiatives throughout the year to keep employee interests soaring and participation intact, thus driving the growth of this segment. Another factor fueling the growth of this market is the integration of corporate wellness programs into facility operations to make it a more permanent, ongoing fragment of the workplace culture.

INSIGHTS BY DELIVERY
The on-site segment accounted for the highest U.S. corporate wellness market share in 2022. Typically, on-site services include nutrition, fitness, recreation, health education, personal health coaching, immunization services, and clinics via the employer or partnership with a third-party vendor. Larger companies are more likely to offer on-site services as they have access to more resources in terms of budgets, space, and personnel, unlike smaller companies that typically outsource them. Making healthy foods available at the workplace, offering physical activity areas, and walking trails are popular programs in this segment. Another major driver is the employer's intention to create a culture of health by integrating wellness with employees' lives at the workplace. It elevates affinity and can drive loyalty as personal satisfaction intensifies.

INSIGHTS BY INCENTIVE PROGRAMS
The U.S. corporate wellness market by incentive programs is segmented into participatory and health-contingent. During the forecast period, the participatory segment is projected to witness the highest CAGR of around 13%. Participatory programs have a certain level of flexibility as they are non-conditional and preclude incentivizing outcomes. The positive effects of these incentives are particularly prominent in settings where employees receive preventive care services. Vendors are designing incentive programs that are in sync with the goals and objectives of the company. They are, thus, popular with first-time employers that use them as an entry point into the workplace wellness realm. As more and more employers board the corporate wellness bandwagon, participatory programs are expected to gain traction. They are also specifically witnessing success among small-scale workplaces as they are a low-cost option.

INSIGHTS BY TYPE
The U.S. corporate wellness market by type is segmented into services and technology. The services segment includes health coaches, clinical interventions, and other programs, while technology includes devices, health applications, and software. Services-heavy programs in the corporate wellness market have largely been the norm, fueled by their magic bullet perception that drove businesses to cash in. With safety, wellness, and protection of employees becoming the priorities during COVID-19, workplace wellness is becoming a corporate responsibility, driving the use of services. Further, there has been a proliferation of integration with services and technology. For instance, Terryberry Wellness, a cloud-based employee wellness program, partnered with WellRight, a wellness program company offering biometrics, health assessments, and wellness education, to offer an integrated portal for wellness activities, education, social encouragement, and incentivizing healthy behaviors.

INSIGHTS BY INDUSTRY
The media & technology segment dominated the U.S. corporate wellness market share in 2022. The pandemic has accelerated the need for a digitally connected world, driving the media, technology, and telecommunication sectors at a high-growth pace. The industry is already anticipated to witness long-term increased spending. The need for businesses in every sector to adopt high resilience and innovative strategies is bolstering the sector's growth and, in turn, leaving more profits aside for the wellness of employees. The media and technology industry largely constitute high-profile companies such as Apple, Google, and Microsoft with innumerable wellness offerings.

INSIGHTS BY END USER
The U.S. corporate wellness market by end-user is segmented into large private sector businesses, medium private sector businesses, public sector companies, small private sector businesses, and non-profit organizations. In 2022, the large private sector businesses accounted for the highest U.S. corporate wellness market share. Large corporates have almost unanimously implemented corporate wellness programs. The rise in corporate profits created more discretionary income for employers, driving their spending on corporate wellness programs. About 89% of large businesses offer wellness programs with varying degrees of complexity and are driven by the need to create a long-term impact on employee health and productivity. The most offered programs are health management programs, EAPs, health and wellness websites, HRAs, wellness coaching, health and fitness challenges, disease management programs, biometric screenings, and on-site fitness centers. These companies invest heavily in on-site activities to create an environment guided by the office culture.

COMPETITIVE LANDSCAPE

The U.S. corporate wellness market is highly fragmented, with several top vendors. However, the industry witnesses consolidation, albeit at a slow pace. Some prominent U.S. corporate wellness market players include COMPSYCH, Labcorp, Virgin Pulse, and Quest Diagnostics. Most vendors offer wellness portals, wellness management services, and incentive programs. However, over the past couple of years, the industry has witnessed the entry of many external players, such as in-house services by large businesses and other entities in the health and fitness space that offer membership discounts to drive up their share in the market. Mergers and acquisitions are common within the industry as players look to expand and become more comprehensive in their offerings. A trend witnessed among vendors in a landscape where consolidation occurs is the focus on merging two platforms. As large players join hands, resources are spent on merging rather than innovation.

While large organizations with a considerable budget have pricing, flexibility in approach, and the ability to customize solutions as their top criteria, smaller organizations do not emphasize reporting as much. Pricing is the top criterion, while expertise and testimonials are at the bottom. Vendors compete regarding aftersales services, brand value, customization ability, price, skilled workforce, and technological capability. Most U.S. corporate wellness market vendors offer wellness portals, wellness management services, and incentive programs. They work closely with other players operating in the healthcare space, such as medical labs, health insurers, and the like to provide a rounded corporate wellness program. Vendors also tend to tie up with technology companies to develop wellness programs.