The importance of ROI reporting on your corporate wellness program
In recent years, corporate wellness programs have moved on from being a “good to have” employee benefit to an actual strategic investment that can positively impact bottom line. Corporate wellness companies such as WellteQ strive to address core business goals while improving employee heath, well-being, and performance.
But are these types of programs effective? HR managers need to consider what type of wellness program is worth their time and is best suited to the needs of their organization. There are a few main points that HR managers need to consider when deciding whether a wellness plan is worth carrying through:
- What key objectives are you trying to achieve with a corporate wellness program? Reduction in healthcare costs and sick days?
- Will your program generate soft returns are such as increasing employee morale and reduction in turnover rates?
Reducing healthcare costs and unplanned absenteeism
Since the early 2000s, studies have repeatedly proven that employee wellness programs directly impact company profits by reducing healthcare costs and lost work days. In 2001 MD Anderson Cancer Center’s introduced their employee wellness that included a well-being department staffed by a doctor and a manager. The astonishing results included a lost work days decline of 80% and modified-duty days by 64%. Cost savings, calculated by multiplying the reduction in lost work days by average pay rates, totaled $1.5 million; workers’ compensation insurance premiums declined by 50%.
World leading consumer goods company Johnson & estimates their wellness programs have cumulatively saved the company $250 million on health care costs over the past decade; from 2002 to 2008, the return was $2.71 for every dollar spent.
The many soft returns of a well executed corporate wellness program have also been well documented over the years. Vicki Banks, Biltmore’s director of benefits and compensation, “Employees who participate in our wellness programs do not leave.” Nelnet, an education finance firm, also report that outgoing employees in exit interviews consistently state the wellness program of the company is what they will miss the most.
HR Managers’ biggest challenge
WellteQ consistently speaks to HR leaders about what their biggest challenge is when preparing to launch a wellness program for their company and the one common problem emerges constantly – Convincing management of the hard returns that comes with the program. Soft returns of effective workplace wellness programs such as higher employee motivation and positivity are a given, but the hard returns such as health care costs savings and productivity increases can be harder to measure. The good news is that it can and is already being done.
What are the metrics you should be reporting?
- DIRECT COSTS – The total price of running your corporate wellness initiative
- INDIRECT COSTS – Any non-financial contributions enabling delivery of the wellness initiative – ie lost work hours due to employees attending a wellness seminar
- LOST DAYS DUE TO INJURY/ILLNESS – The number of work days lost due to an employee injury or illness
- MEDICAL COSTS – Any medical costs arising from treatment or assessment of injury or illness
- ENGAGEMENT & COMPLETION RATES – Total number of employees who start, consistently participate and complete any wellness initiative
There are many other metrics that you can measure but the above are the most essential ones that should be part of any wellness ROI Report.
WellteQ has published a great report named “Calculating Real ROI On Corporate Wellness”. In the report you will find more detailed information about the following:
- The importance of calculating ROI on your corporate wellness program
- Easy to follow simple ROI calculation method
- Making a solid business case to your leadership justifying the need for corporate wellness
- The Absenteeism crisis in Australia, UK and USA