#023 – Why Corporate Gyms Don’t Work


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Podcast Transcript


Welcome to the Working Well Podcast. I’m Tim Borys CEO of FRESH! Wellness Group. This show explores the diverse aspects of workplace health and personal performance. On the Working Well Podcast we dive into the foundations of what makes wellness work in workplaces around the world. We connect with corporate leaders, executives, and industry experts who are helping make life more awesome at work and home.

Join us to learn workplace wellness, best practices, personal performance tips, and access resources to jumpstart your personal and corporate programs.


Today, corporate gyms are pretty common with even small companies following the trend. Unfortunately, most corporate gyms are simply a bad investment in terms of money spent and the results produced.

Now, this may seem like a pretty strange statement coming from someone who’s spent 30 plus years in the health and fitness industry. In today’s episode, it will soon make sense. We’re going to dive into why I believe the current gym model is broken, how it happened, what the implications are and what employees and companies can do to improve the situation.

We may end up slaughtering a few sacred cows in the process, but I guarantee it’s going to open your eyes to many issues with the fitness industry in general and the current model of corporate wellness. Including how company gyms are designed and implemented. Let me start by saying it’s not that gyms can’t work it’s just that the current mindset and model of corporate fitness doesn’t work. Most corporate gyms are modeled after commercial fitness centers, but they’re just restricted to employees of a particular company or tenants and a certain building. On the surface this makes sense. Companies buy or lease lots of fancy equipment they install swanky change rooms, provide towel service, and a wide range of other popular services such as fitness classes on a weekly schedule.

However, the main problem is that commercial health clubs have very little to do, if anything, with actually improving the health of members. Seriously, if you haven’t realized this yet health clubs are not in the business of health, they’re in the business of selling recurring monthly memberships, ideally on a multi-year contract. In order to keep those memberships at an affordable price, they must sell hundreds if not thousands of them, but they can do this because the numbers make it profitable. First of all, only about 20% of the north American population has a gym membership. Yet stats show that over 80% of people who pay for these gym memberships never use them enough to see health benefits.

On the flip side, gyms are amazing for those people who go regularly. The 10 to 15% who regularly attend they get cheap membership rates. They’re subsidized by the 85 to 90% of people who never go. This is the brilliance of the business model, but it’s absolutely atrocious for the health and fitness of gym members and for companies that are disregarding these facts about their employees. We can also look at the numbers. Depending on the study and the source of those numbers only about 15 to 25% of the north American population is benefiting from enough physical activity. The majority of people do some activity, but it’s not enough to improve their health.

There’s also about 15 to 20% of the population that do absolutely zero physical activity. Take a moment to let this sink in. The health wellbeing and personal performance implications of these stats are absolutely enormous. People are unfit and unwell, both mentally and physically. This has a steep toll on personal happiness family function and community vibrancy. Plus it costs companies billions of dollars every year. And our society is facing trillions of dollars in related costs. Whether those costs are through increased healthcare expenses, lost productivity, mental health impacts, disease, or other societal ripple effects. The important stat to comprehend is that the majority of these issues and illnesses are completely preventable or largely preventable.

In fact, five of the six top leading causes of death in north America are largely preventable. This has been consistent for many years. Cancer and heart disease are overwhelmingly dominant as the top two and outside of accidents or the accidents category, which is number three on the list. The rest are classified as quote, lifestyle diseases. That’s because they can be dramatically reduced through healthy lifestyle choices, including physical activity. And this is a huge opportunity for positive change. But only if we start to shift our mindset and our actions around personal health workplace wellness and our responsibilities in each of these areas. People may think I’m picking on workplace wellness or corporate health, but that’s because we spend so much of each day at work.

Now in the past, companies have tended to be pretty hands-off when it comes to employee physical activity and fitness. In general, I say, business has left this aspect of health up to the employees themselves. They have to figure it out on their own and get things done on their own time. I’d say it’s pretty clear. and pretty obvious that the current approach isn’t working, look at it this way. We have more health and fitness information at our fingertips than ever before yet our society is getting increasingly unhealthy and unfair. Sure most companies, these days are going to provide some type of gym subsidy that allows employees somewhere in the ballpark of let’s say 500 to a thousand dollars per year towards a gym membership.

Now, this is another perk that may seem great on the surface, but I feel it’s one of the worst investments a company can make. Here’s why. The stats are pretty consistent. That about 80% of people who purchase a gym membership are rarely going to use it. The stat is likely made worse, but for many people, because it’s not their money, it’s their companies, the company’s paying for them to not go. As many of us intuitively know there’s something to be said about having a bit of skin in the game that increases accountability. Plus employees that do attend the gym regularly, are those who are most active and would likely have a gym membership even without the subsidy. Even further, these regular exercisers and avid gym users are the people who are often the healthiest and less risk to the company.

Paying gym memberships for these employees is a great perk and don’t get me wrong, but it does nothing for overall workplace wellness. Then, of course there’s the financial impact of corporate gym subsidies. Think of it this way. What would your investment advisor say if you made an investment where each year 80% of your investment was erased, yet you kept plowing money into that black hole year after year. This is exactly what happens when companies pay money for gym subsidies. Let’s look at the numbers. Say you have a hundred or a thousand employees, and you just give $500 per year to each employee. That’s $500,000 per year that that company is investing we’ll call it, in employee health and wellbeing.

Now, if it’s just a perk and they expect nothing back. Totally fine. That’s the prerogative of, of each company? Well, those are rough numbers. It’s definitely clear that there are many better options for allocating the investment that are going to be better for employee health and wellbeing, or even as a perk that more people can enjoy. Now I’ve had this conversation with many companies, and I typically hear a couple of different perspectives. First people say that gym subsidies are the norm and that people would completely freak out if they were taken away. And while that may be true, the fact is most people aren’t using them. Anyway, the other comment that I often hear is that company leadership believes in providing access to health and fitness resources so people can make positive changes in their life when they’re ready.

Well, both points are understandable in principle I believe the application can definitely be improved. Let’s talk about the gym subsidy norm. Change is hard, but it’s necessary to learn and keep moving forward. If the only people using gym subsidies will use it without the subsidy. There are more effective ways to invest that capital and to make a greater positive impact on people in the organization. If empowering and facilitating employee health through a fitness center is truly the goal then even small companies would be better out building their own facility. This brings us back to the issue with the health club model and where companies commonly missed the boat. When building fitness centers. The goal is not to recreate a local big box gym in your own office.

It’s to be better, much better. Providing a better health, fitness, and wellness experience is going to involve this significant mindset shift. It requires what I call putting the health back in health club and the wellness back in workplace wellness. Bringing your gym in-house has a number of great benefits. First that subsidy investment can be redirected to internal infrastructure. You’re building an asset in the organization instead of paying some other company. Companies also have more control over to the design layout, customization of the space. So it can provide a greater benefit to employees who need it the most, even if we just look at the basic onsite gym, when it’s well-designed and appointed, engagement and usage levels are going to rise dramatically.

A huge part of this increase and a key benefit is simple convenience. When the gyms onsite and only steps away, people are just going to use it more. From personal experience I’ve seen many corporate fitness centers that have 50 or 60% of their employees as members and 30 or 40% of them are using it on a weekly basis. While there still is an ideal, it’s more than double what the norm is for offsite gyms. Remember that 80% or more of people who typically don’t use gym memberships or don’t go regularly, attracting and catering to this group is what will produce the greatest benefits to employees and the organization.

When we make the facility a valuable tool as part of the overall wellness program, it allows employees to benefit from so much more than just a place to work out and sweat. In the perfect world corporate wellness facilities are hubs for information, programs and services that boost engagement, positivity, and performance across the entire organization. When we consider the reallocation of gym subsidy funds, many companies are going to be able to recoup their investment costs within two to three years, while also building a much more effective amenity and resource for everyone in the county. If we use our $500,000 a year example, number a thousand employees at $500 or 500 employees at a thousand dollars, a company can build outfit and staff and onsite facility with customized employee programming.

And after the first couple of years, there’ll be saving money every year. Not to mention the positive return on investment that the programs themselves provide to employees when people are getting healthier, happier, fitter, more engaged. And improving their performance in the organization. You’re going to see tremendous benefit.

Well, each organization is going to have a particular focus based on employee demographics, or workplace culture, the budget they have available, and many more factors. There are a few key components that I believe that have to exist for any corporate wellness program and fitness facility to be successful. In previous episodes, I’ve mentioned the four components that make up the workplace wellness pyramid. The foundation of that pyramid is built on activity and education. When we can seamlessly integrate these components, we’re able to help employees engage, learn, and take action. The education and activity are going to make up the bulk of the program, but they aren’t the most important part.

The importance resides in two other components. Those are strategy and metrics. Whether it’s a fitness facility or an overall wellness program, strategy is critical. See the large majority of corporate gyms and wellness program just simply check a box on some corporate to-do list. Someone in the company decided a gym was a good idea then facilities department gets involved and they get tasked with making it happen. And outside of deciding whether to have it staffed or provide a few various services, very few companies take the time and involve the right stakeholders. To find out what the goals of the facility are, put the benefits and results that we’ll provide and how those goals are best attained. Believe me, I’ve designed, consulted and managed dozens of corporate fitness centers and getting key business stakeholders to chat about the big picture goals and discuss strategy from day one is exceedingly rare because without strategy, everything is random and there’s no path to success. That’s why so many programs and facilities struggle.

Once a strategy is in place, key metrics or KPIs can be established to track progress and measure results. Again, it sounds super basic. You do it in all kinds of other areas of the business, but facilities and wellness programs fail because strategy and metrics are usually missing or poorly implement. So what can leaders and companies do to avoid these mistakes and maximize their chances of success? Well, the first step is to embrace a shift in mindset around workplace wellness. It’s not just a checkbox, it’s an overarching philosophy that runs through the organization. Be open to upending the status quo and exploring opportunities for change so you’re going to benefit your people and the business.

The next step is to get help, reach out to a consultant like myself, that isn’t beholden to keeping the status quo will say there are lots of people and businesses out there that are really committed and determined to keep things how they are because they make a lot of money for it. As far as doing things internally, that can happen but I found that making changes internally can be a lot tougher and outside perspective and insight is going to help you see blind spots, generate some new ideas and make faster progress. I know with wellness, many people are doing it off the side of their desk and very few companies have a dedicated team of people related to employee health and wellbeing. So if someone’s doing that internally, it’s taking away from the other work that they could or should be doing.

Bringing in an outside person or committing to hiring people internally is something that will greatly benefit the organization in the longterm. Now, my goal in life and businesses to help people and companies perform at their best. And there are lots of ways to do that, but I encourage you. Let’s connect, discuss what it looks like for you and your business. Reach out by phone, email, DM, send a messenger pigeon. It doesn’t matter to me. I’d love to connect and chat. We’ll catch up soon and I’ll see you on the next episode.


Thank you for listening to the Working Well Podcast. If you enjoyed the show, don’t forget to rate and review us wherever you get your podcasts. We’d love to hear your experiences and how you’ve applied tips from the show to your daily life.

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We’ll see you on the next episode.

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