Employers Cutting Back on Money for Employee Wellness, Gym Benefits

Much like office snacks and flashy holiday parties, corporate wellness programs have always struck me as a bit of a scam — nice to have, but not at the expense of my job, salary, or a decent healthcare plan. Maybe that makes me a cynic, but in the zero-sum world of corporate budgets, if it comes down to layoffs vs. avocados, I’m fine skipping the avocados. Unfortunately (or fortunately), I’m not the one making those decisions.

Workplace wellness programs have exploded over the past decade or so, with companies rolling out a suite of subsidized perks, such as gym discounts, mental health apps, and other benefits aimed at attracting and retaining workers. The pandemic upped the ante even more — in the face of a tight labor market and a hyper-stressed workforce, plenty of business leaders looked around and thought, “Well, a Zoom meditation session can’t hurt, right?”

Now, the ground is shifting. Corporations aren’t cutting their wellness programs altogether, but they are taking a hard look at what they’re paying for. They’re cutting excessive, underutilized benefits, scrutinizing ROI, and shifting to more cost-effective, targeted products. They’re trying to support employee well-being amid economic uncertainty and rising healthcare costs — without breaking the company piggybank.

Your job still wants to help you out with the gym, but it would rather you hit up Planet Fitness than Equinox. And, if it figures you’ve given up on your New Year’s resolution to exercise already, it doesn’t want to waste money on a benefit you’ll never use.

In the 2010s, the millennial-driven flurry of “work-life balance” chatter nudged companies to invest more in the life end of things. A low-interest-rate environment made such spending easy to justify. Perhaps a smaller player couldn’t compete with the tech giants’ lavish perks, but many of them did pour money into products and services they hoped might support employee health and morale, to varying degrees of success.

“I don’t know that anybody’s told me that it’s paid off. I mean, I don’t hear companies saying, ‘Our well-being program has been our secret to success,” says Josh Bersin, global industry analyst and CEO of The Josh Bersin Company, a consultancy. “So it does not surprise me that this got really overbuilt and overhyped.”

Returns are hard to track, employee uptake is limited, and costs often balloon.

Now that companies are tightening their belts again, many of these ancillary perks are on the chopping block. Wellness is a fairly straightforward place to make spending reductions, as it falls in the optional category. Returns are hard to track, employee uptake is limited, and costs often balloon.

Data Ramp Capital shows companies using its expense management platform have reduced wellness benefits for employees to $1,103 a year per worker in 2025 from $1,366 in 2023, a 20% decline. In turn, employees have upped their usage of budget-friendly apps such as Classpass and Wellhub and shifted toward lower-cost gyms.

“Benefits are being cut, and then as those benefits are being cut, people are spending at cheaper places on average,” says Ara Kharazian, an economist at Ramp.

The cuts to these side benefits come as the cost of companies’ major healthcare expenditure — the insurance they provide for their employees — continues to rise. Annual family premiums for employer insurance coverage increased by 6% to nearly $27,000 in 2025, per the Kaiser Family Foundation, and are expected to hit $30,000 this year. Employers say that controlling healthcare costs is their primary benefits objective, according to a recent MetLife survey, outweighing productivity, loyalty, and attracting talent.

“What they’re doing in light of really large increases is they are going through every benefit,” says Todd Katz, head of US group benefits at MetLife.

Cesar Carvalho, the CEO of Wellhub, which gives employees access to a network of gyms, studios, and classes, says one of the main appeals of his business is its price point, especially in this environment. “The value proposition of the company is very simple, they pay $2-$5 per employee per month, and that’s it,” he says.

If I had to make a bet, I would guess that you, the reader, do not fully understand the various wellness-related perks your job offers. That’s OK! Neither do I! Companies have been spending a lot of money on corporate wellness — by one estimate, nearly $95 billion worldwide this year — without always checking whether it’s effective.

One 2023 Deloitte survey found that 68% of workers don’t use the full value of their company’s well-being resources because the programs are too “time-consuming, confusing, or cumbersome” to access. A separate 2025 survey from Sapients Insights Group, a research and advisory firm, found that under a third of workers access their company’s digital wellness platform monthly. Much of this stuff hasn’t proven very impactful anyway: A 2024 study out of Oxford University in the UK found that employer offerings such as well-being apps, relaxation classes, and financial coaching generally didn’t make workers better off. The exception: providing opportunities to volunteer. (Resilience and stress management training actually had a negative impact.)

The way to build a healthy workplace culture is for the workplace to be holistically healthy

Zachary Chertok, a senior research manager for employee experience at IDC, a market-intelligence firm, tells me that spending on physical and mental well-being is growing more strategic. Decisions around these products and services have historically been “top down and driven by internal company initiatives,” he says. Essentially, someone in the C-suite or in HR decides there’s going to be a wellness push, picks out whatever app(s) to implement it, and everyone moves on. Now, companies are getting smarter at identifying and spending on what’s actually being used rather than what isn’t. What this looks like in practice is businesses enlisting vendors that offer a potential suite of services or a central hub to manage a set of offerings, rather than contracting with a bunch of ad hoc programs. The model lets them choose which options they do and don’t want to include and, over time, decipher what employees are using to refine the offer.

“As wellness spend matures, companies are thinking more about individual use and engagement cases and how spend can be mapped to it,” Chertok says. New platforms that collect data on what people are using and what they aren’t, he adds, helps “connect the dots on what is actually having an impact and working.”

Essentially, if my work wellness platform realizes I’m never going to download the mental health app, it will stop bugging me about it, and if enough people do the same, it will alert my employer to drop the benefit.

Employers don’t do all of this extra investing out of the kindness of their hearts. They do it because they think healthier employees will reduce their healthcare costs, take fewer sick days, and be more productive. That, in turn, saves the company money on their end of the insurance bill. From the employee perspective, it results in an awkward arrangement. For people who use the perks, the benefits are a plus, but workers can also feel like their bosses are simply trying to slap a band-aid-sized app onto a much larger problem of stress, burnout, and overwork.

A mindfulness workshop scheduled in the middle of the workday doesn’t help an employee who’s so overwhelmed they don’t have 20 minutes for lunch. It also fosters animosity, as they wonder exactly who among the ranks actually has time for that. The way to build a healthy workplace culture is for the workplace to be holistically healthy: a financial health app doesn’t do much if you’re severely underpaid, a gym membership is useless if you’re working 11-hour day, a video about stress management doesn’t help you figure out how you’re going to manage your new, sky-high insurance premiums.

“I think most people would rather have it go into their medical benefits because that’s the big cost,” Bersin says.

Business Insider is giving us ClassPass this year, and I am excited to use it — assuming I don’t forget, which, TBD. We lost the reimbursement fitness benefit that came with our health insurance last year, which was more financially advantageous. I remind myself this benefit is an extra, not a requirement, and I hope my bosses know I’m OK if they cut it. I can learn to run outside.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.