Insights | Insights

CitiBike & Corporate Wellness

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Michael Brown

April 13, 2015
Bowery Capital

CitiBike has officially launched 6,000 bicycles and 330 docking stations in parts of Manhattan and Brooklyn. These efforts have garnered mixed responses varying from dismay at the lack of stations in many neighborhoods and alarm over traffic hazards, to full support from residents who see an opportunity for New York City to become more environmentally friendly. While the $95-per-year membership is geared towards individuals, 30 or more companies including ‘Wichcraft, Forest City Ratner, Regional Plan Association, The Municipal Art Society, RXR Realty, and Hearst have expressed interest in adding CitiBike to their corporate offerings. Percolate, a 47 person SoHo based tech company, went ahead and purchased memberships for all its employees even without a corporate program in place.

Co-founder James Gross stressed the potentially high ROI of investing in employees’ health: “The goal of all these things is to be very mindful of the fact that we’re working with talented people in a high-intensity startup culture, and more than anything we want to make sure we’re keeping them healthy. That’s not just making sure they don’t have diabetes or heart attacks — we mean are they mentally healthy, clearing their minds and getting out and doing active things.” Corporate wellness has become an important topic for companies whose greatest assets are ultimately their employees.

IBISWorld reports that the corporate wellness industry is slated to grow at an average annual rate of 9.8% to $2.9bn in 2016 as companies seek to improve margins by reducing healthcare costs. According to a study prepared by the RAND Corporation, 92% of employers with 200 or more employees reported offering wellness solutions in 2009. These programs are yielding measurable impact for those employees that use them, however engagement remains low and often must be encouraged through incentive programs. An OptumHealth study found a 30% boost in participation when incentives were offered. Health insurance isn’t the only concern for employers— corporate wellness providers also attempt to boost employee engagement, which suffers when employees are anxious, unhappy, sleep deprived, or otherwise in poor health.

The industry’s major incumbent is HealthFitness, but a number of startups are trying to make a splash in the crowded market. While most notable health and fitness startups are consumer facing wearables like Jawbone, FitBit, Nike+ FuelBand, and Lark, or apps like RunKeeper, Lift, and Fitocracy, a few companies are trying to take a bite out of the enterprise market. Keas and ShapeUp offer social platforms centered on gamification, progress tracking, and support. Both companies have seen success based on improved health, teamwork and collaboration, and more positive feelings towards employers. Incentive based gamification appears to be most effective and results driven enterprise solution.

One of the significant barriers to entry for external corporate wellness programs is that it’s notoriously difficult to sell into HR, the department that is often responsible for wellness programs. Of the HR professionals interviewed for the OptumHealth study, 74% share responsibility for wellness programs and 26% self-identified as decision makers. A Forrester survey revealed that large employers with 1,000 employees or more are leading the pack in terms of wellness investment, whereas many smaller companies with under 250 employees don’t have the resources to offer programs beyond gym reimbursement. Demonstrating return through measurable quantitative metrics can be tricky, especially when recruiting almost always takes precedent over retention. Nonetheless, as programs like CitiBike mature it’s clear that HR managers will have to scrutinize their current wellness offerings.

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