1. SHRM Survey Findings: Employee Benefits in California— Wellness Initiatives April 23, 2014

2. This is part one of a series of SHRM survey findings examining employee benefits in the workplace of California organizations. The following topics are included in the six-part series titled Employee Benefits in California:  Part 1: Wellness initiatives  Part 2: Flexible work arrangements  Part 3: Health care  Part 4: Leveraging benefits to retain employees  Part 5: Leveraging benefits to recruit employees  Part 6: Communicating benefits Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Introduction 2

3. For the purpose of this survey, the term wellness initiative is any type of wellness program, resource or service offered to employees. Financial education initiative is defined as any workplace initiative, program or resource designed to provide employees with information on how to effectively manage their financial resources for a lifetime of financial well-being. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Definitions 3

4. How many organizations offer wellness programs, wellness resources or wellness services to their employees? Sixty-one percent of organizations in California offer some type of wellness program, resource or service to their employees, compared with 72% of overall U.S. organizations. Do organizations conduct analysis on their wellness initiatives? Only 16% of California organizations that have wellness initiatives conduct an analysis to determine the return on investment (ROI), whereas close to one-fifth (23%) of them conduct an analysis to determine cost savings achieved by their wellness initiatives. How effective are wellness initiatives? More than three-fifths (63%) of California organizations that offer wellness initiatives indicated they were “very effective” or “somewhat effective” in reducing the costs of health care. Additionally, roughly three-quarters (76%) of California organizations offering wellness initiatives rated their initiatives as being “very effective” or “somewhat effective” in improving the physical health of their employees. Do organizations offer wellness incentives or rewards? One-half (49%) of California organizations offered wellness incentives or rewards to their employees. Of these organizations, 89% of them indicated these incentives/rewards were “very effective” or “somewhat effective” in increasing employee participation in their organization’s wellness initiatives. Key Findings California Employee Benefits in California—Wellness Initiatives ©SHRM 20144

5. Wellness initiatives could mean a “win-win” for both employees and employers. The majority of organizations (76% in California and nationally) that offer wellness initiatives perceive that they are effective in improving employees’ overall physical health (e.g., initiatives encouraging preventive health). Moreover, wellness programs are often extended to the employees’ dependents, which has further implications for creating a healthy and more productive workforce. Financial wellness is also an area that organizations are finding has an impact on reducing employee stress. Fewer than two out of 10 organizations, however, align their employee wellness initiatives with their financial education initiatives (14% in California, 19% nationally). This may be an area that could be explored further by organizations that are already engaged in wellness initiatives of some kind. More employees are taking advantage of the wellness programs, wellness resources or wellness services that their employers offer. Over one-half of organizations in California and nationally that offer wellness initiatives noted an increase in employee participation in these initiatives last year compared with the year before (54% in California, 56% nationally). Furthermore, organizations reported that offering wellness incentives or rewards was effective in getting employees involved in these programs. The challenge remains in quantifying the impact of wellness programs. Organizations indicated that they would be more likely to invest in wellness initiatives if they could measure the impact. What do these findings mean for the HR profession? Employee Benefits in California—Wellness Initiatives ©SHRM 20145

6. Note: Respondents who answered “not sure” were excluded from this analysis. Does your organization currently offer wellness programs, wellness resources or wellness services to your employees? 6

7. Comparisons by organization staff size 500 to 2,499 employees (75%) 2,500 to 24,999 employees (87%) >1 to 99 employees (46%) 2,500 to 24,999 employees (87%) >100 to 499 employees (53%) Note: Only statistically significant differences are shown. Comparisons by organization staff size Organizations with 500 to 24,999 employees were more likely than organizations with 1 to 99 employees to offer wellness programs, wellness resources or wellness services to their employees. In addition, organizations with 2,500 to 24,999 employees were more likely than organizations with 100 to 499 employees to offer wellness programs, wellness resources or wellness services to their employees. Employee Benefits in California—Wellness Initiatives ©SHRM 20147 Does your organization currently offer wellness programs, wellness resources or wellness services to your employees? (Continued)

8. Comparisons by organization sector Publicly owned for-profit (83%) > Privately owned for-profit (53%) Note: Only statistically significant differences are shown. Comparisons by organization sector Publicly owned for-profit organizations are more likely than privately owned for- profit organizations to offer wellness programs, wellness resources or wellness services to their employees. Employee Benefits in California—Wellness Initiatives ©SHRM 20148 Does your organization currently offer wellness programs, wellness resources or wellness services to your employees? (Continued)

9. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 How did your organization’s investment in employee wellness initiatives change in this fiscal year compared with the last fiscal year? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” were excluded from this analysis. 9

10. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” were excluded from this analysis. Did your organization conduct an analysis to determine the return on investment (ROI) for its wellness initiatives last year? 10

11. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 How effective is your organization at determining the return on investment (ROI) for its wellness initiatives? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services and conducted an analysis to determine the return on investment (ROI) for their wellness initiatives were asked this question. Respondents who answered “not sure” were excluded from this analysis. 11

12. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Did your organization conduct an analysis to determine cost savings for its wellness initiatives last year? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” were excluded from this analysis. 12

13. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 How effective is your organization at determining cost savings for its wellness initiatives? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services and conducted an analysis to determine cost savings for their wellness initiatives were asked this question. Respondents who answered “not sure” were excluded from this analysis. Percentages may not total 100% due to rounding. 13

14. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 How did employee participation in your organization’s wellness initiatives change last year compared with the year before? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” were excluded from this analysis. 14

15. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 How effective are your organization’s wellness initiatives in reducing the costs of health care? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” or “not applicable” were excluded from this analysis. 15

16. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 How effective are your organization’s wellness initiatives in improving the physical health of your employees? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” or “not applicable” were excluded from this analysis. Percentages do not equal 100% due to rounding. 16

17. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Did your organization offer some type of wellness incentive or reward last year? Note: Only respondents whose organizations provided any type of wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” were excluded from this analysis. 17

18. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 How effective were these wellness incentives or rewards in increasing participation in your employee wellness initiatives? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services and offered some type of wellness incentive or reward were asked this question. Respondents who answered “not sure” were excluded from this analysis. Percentages do not equal 100% due to rounding. 18

19. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” were excluded from this analysis. Would your organization increase its investment in employee wellness initiatives if it could better quantify their impact? 19

20. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Are any of your organization’s wellness initiatives extended to dependents? Note: Only respondents whose organizations provided any type of wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” were excluded from this analysis. 20

21. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Please indicate if your organization’s wellness initiatives are extended to any of the following groups: Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services and extended wellness initiatives to employees’ dependents were asked this question. Respondents who answered “not sure” were excluded from this analysis. Percentages do not equal 100% due to multiple response options. 21

22. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Are your organization’s employee wellness initiatives aligned with any financial education initiatives? Note: Only respondents whose organizations provided wellness programs, wellness resources or wellness services were asked this question. Respondents who answered “not sure” were excluded from this analysis. 22

23. Demographics Employee Benefits in California—Wellness Initiatives ©SHRM 201423

24. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Demographics: Organization Staff Size n = 310 24

25. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Demographics: Organization Sector Note: n = 322. Percentages do not equal 100% due to rounding. 25

26. Percentage Professional, scientific and technical services24% Health care and social assistance13% Manufacturing12% Finance and insurance10% Government agencies8% Educational services8% Transportation and warehousing7% Retail trade7% Whole trade6% Real estate and rental and leasing5% Accommodation and food services4% Administrative and support and waste management and remediation services4% Construction4% Information4% Utilities4% Religious, grantmaking, civic, professional and similar organizations3% Mining2% Arts, entertainment and recreation2% Repair and maintenance2% Agriculture, forestry, fishing and hunting2% Personal and laundry services1% Other9% Demographics: Organization Industry Note: n = 328. Percentages do not equal 100% due to multiple response options. Employee Benefits in California—Wellness Initiatives ©SHRM 201426

27. Employee Benefits in California—Wellness Initiatives ©SHRM 2014 Demographics: Other U.S.-based operations only79% Multinational operations21% Single-unit organization: An organization in which the location and the organization are one and the same. 30% Multi-unit organization: An organization that has more than one location. 70% Multi-unit headquarters determines HR policies and practices. 59% Each work location determines HR policies and practices. 5% A combination of both the work location and the multi-unit headquarters determines HR policies and practices. 37% Is your organization a single-unit organization or a multi-unit organization? For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both? Does your organization have U.S.-based operations (business units) only, or does it operate multinationally? n = 324 n = 325 Note: n = 234. Percentages do not equal 100% due to rounding. Corporate (company-wide)78% Business unit/division15% Facility/location16% Note: n = 234. Percentages do not equal 100% due to rounding. What is the HR department/function for which you responded throughout this survey? 27

28. SHRM Survey Findings: Employee Benefits in California—Wellness Initiatives Response rate = 13% 373 HR professional respondents in California organizations from a randomly selected sample of SHRM’s membership participated in this survey Margin of error +/- 5% Survey fielded May 3-June 7, 2013 Survey Methodology Employee Benefits in California—Wellness Initiatives ©SHRM 201428

29. Additional SHRM Resources SHRM Research Findings: Workplace Wellness Initiatives Wellness Benefits Resource Page California Employers Look to Wellness Benefits California Employers Turn to Wellness Programs to Combat Preventable and Chronic IllnessesCalifornia Employers Turn to Wellness Programs to Combat Preventable and Chronic Illnesses Preventive Health and Wellness Benefits in California Designing and Managing Wellness Programs Wellness Initiatives Can Ease the Pain of Rising Benefits Costs What Level of Impact Fits Your Wellness Plan? Federal Tax Implications of Wellness Incentives and Rewards Employee Benefits in California—Wellness Initiatives ©SHRM 201429

30. About SHRM Research Employee Benefits in California—Wellness Initiatives ©SHRM 2014 30 For more survey/poll findings, visit www.shrm.org/surveyswww.shrm.org/surveys For more information about SHRM’s Customized Research Services, visit www.shrm.org/customizedresearchwww.shrm.org/customizedresearch Follow us on Twitter @SHRM_Research@SHRM_Research Project leaders: Christina Lee, researcher, SHRM Research Yan Dong, SHRM Research Project contributors: Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research Evren Esen, director, Survey Research Center, SHRM Research Copy editor: Katya Scanlan, SHRM Knowledge Center

31. About SHRM Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org.shrm.org Employee Benefits in California—Wellness Initiatives ©SHRM 2014 31