One of the most frequently asked questions is the specific benefits of wellness programs. There is ongoing debate as to whether this is just a temporary trend. There is some data that suggests such programs actually contribute to both company profits and employee health, but it is not substantial enough.
As interest and investment in employee wellness programs increases, discussions about their return on investment (ROI) are gaining momentum. However, while the program is ongoing, it is difficult to accurately quantify the financial impact. Research from the University of Texas MD Anderson Cancer Center shows that well-designed and efficiently implemented employee wellness programs can deliver a significant and profitable ROI of up to six to one.
Common success factors for a positive ROI
Wellness programs have different results. However, there are common success factors that make them more effective and ROI-oriented. A study from the Center for Studying Health System Change (HSC) shows that tailored wellness programs are effective.
A good work environment is essential for any wellness plan to work. A strong plan and long-term strategy must support the programs. For a company committed to the well-being of its employees, the result of a wellness plan leads to an improved satisfaction index. However, it is not an easy task to combine this intangible quantity with measurable key figures.
Effective wellness plans have a few things in common:
1. Integrated into organizational needs,
2. You must be comprehensive but detail-oriented
3. They must respond to diverse needs
4. Align with the organization’s business strategy
5. Endorsed by leaders and managers.
To measure improved ROI, organizations most often use healthcare costs, productivity or absenteeism. Furthermore, there is no universal standard for measuring ROI. Therefore, it may be difficult to quantify the results achieved in monetary terms. An alternative approach called Value on Investment (VOI) is sometimes used. Here it can be measured whether a non-financial key figure has increased after the implementation of the program.
Increase employee engagement and well-being with a comprehensive corporate wellness program that goes beyond the usual
Common methods for measuring ROI
Some common methods of measuring ROI or VOI
1. Productivity
An employee wellness program can have measurable results such as more high performers at work. Sustained positive initiatives such as proper nutrition and planned activity levels are likely to improve employee health. However, to determine whether a wellness program has increased employee productivity, a company must have a way to measure productivity. For example, it can measure the increase in working hours and customer satisfaction. However, the metrics can be different and have an indirect connection to employee well-being. This area is gray and it is sometimes difficult to achieve directly measurable impact.
2. Commitment
Wellness programs can lead to improved employee engagement. This results in employees having higher job satisfaction. An engaged employee is more likely to stay loyal to their work and be more task-oriented. This can lead to metrics such as higher goal achievement, faster turnaround times, innovative thinking and reduced absenteeism.
3. Health Expenditures
One of the easiest ways to measure ROI is by calculating healthcare spending and insurance claims. Effective wellness programs can eliminate common causes that lead to lifestyle diseases such as high blood pressure, diabetes and cancer. Since lifestyle diseases account for the highest healthcare expenditure, reducing these risk factors can dramatically reduce the organization’s investment in healthcare.
4. Employee turnover and retention
Lower employee turnover and higher retention rates are a byproduct of an effective wellness program. When employees make positive changes to their health, they become more productive and engaged, leading to greater job satisfaction.
One of the main factors driving employee turnover is poor mental wellbeing. According to the American Psychological Association, burned-out employees are more than 2.5 times more likely to leave their jobs. As a result, employers that offer wellness programs that support better physical and emotional health may see higher retention rates.
5. Talent acquisition
Growing companies are always looking for new talent to join their team. Attractive benefits and a positive culture are becoming more important to job seekers than mere compensation. Wellness programs help improve an organization’s ability to attract and retain talent. Robust wellness programs give companies a competitive advantage in the job market and enable them to achieve return on investment through better talent recruitment strategies.
6. Health Metrics
Effective employee wellness programs are designed to improve the health and well-being of participants. When your employees keep track of key health metrics, managers can gain insight into the effectiveness of wellness measures.
Inspiring behavior changes
Wellness programs play a critical role in encouraging healthy habits among employees and highlight the importance of investing in health.
Decrease in absenteeism
Healthier employees are less likely to miss work due to minor illnesses, resulting in longer overall working hours. Additionally, workplaces that utilize wellness programs see a decrease in absenteeism, which leads to higher productivity.
Positive health benefits
Comprehensive wellness programs that cover various dimensions lead to improved productivity, efficiency and increased company profits. Organizations that focus on holistic wellness report positive health outcomes and create a nurturing work environment.
Key measurable health metrics include:
- weight loss
- Blood pressure
- Level of physical activity
- Smoking and drinking habits
- Sleep quality
Improvements in any of these areas indicate that the employee wellness program is worthwhile.
How to increase the ROI of corporate wellness programs
Regardless of how your company measures ROI or VOI, there are certain ways to implement a wellness program to ensure its effectiveness.
Below are some tips on how to achieve higher ROI with wellness programs:
1. Maximize Participation: The aim is for at least half of the staff to be registered and take part. The more employees enroll and participate, the lower the average cost of running the program. This produces more tangible results.
2. Incentives and Recognition: When designing a wellness program, consider the incentive or reward structure that will motivate employees to stay engaged. When employees are highly motivated by certain types of incentives or rewards, it increases their chances of achieving desired results.
3. Make participation seamless: Make wellness a part of your regular workday. Create an appropriate flow of information to communicate the wellness program and enrollment and participation. Promote it as part of your company culture. Appoint dedicated wellness champions who can help your employees stay motivated.
Implementing an effective employee wellness program
It’s entirely possible to achieve ROI with workplace wellness programs. Even a small win is a starting point because it shows that the program is helping employees improve their health. However, changing mindsets and creating healthy habits is a long-term process.
The last word
Success in employee well-being is a gradual process. The focus must be on the importance of investing in a tailored, results-oriented program tailored to your company’s workforce, goals and needs. Clear and consistent communication about the program is critical to long-term success. Over time, you can expect a decrease in costs associated with health and absenteeism, as well as a decrease in health benefit expenses. At the same time, there should be an increase in engagement, productivity and retention of the workforce. This holistic approach also promotes the motivation of the workforce and has a positive impact on both employee and customer relationships.
Research sources
1. Employer wellness initiatives are growing rapidly, but effectiveness varies widely