Importance of accurately measuring wellness programs’ ROI

Employee well-being is essential for the success of any organization. If your employees aren’t happy and healthy, both physically and mentally, it affects productivity, engagement, turnover rates and a company’s bottom line.

It makes perfect sense when you think about it. A workforce that is positive, healthy and feels supported by its organization is less stressed and feels more empowered to do their best work.

A Gallup poll found that 23% of workers felt burned out at work very often, while 44% felt it sometimes. And employees who feel burned-out are 63% more likely to take a sick day and almost three times as likely to look for a different job.

One way to make sure your employees aren’t burned out and, instead, are happy and healthy, is by implementing wellness programs.

And here’s a vital point: The pandemic has brought the importance of mental health and well-being into the spotlight, along with physical health and well-being which has been the focus of most employee wellness programs. Now that both sides of well-being – mental and physical – are the focus for employees, they must be the focus for wellness programs, too.

Reason: Employees are now aware of the important of their physical health and well-being to the success of an organization and are looking to work for companies who make it a priority to help them.

Offering employee wellness programs and perks also improves your workforce’s overall health, reducing the number of days your employees are out sick. It can encourage employees to think more consciously about their health and wellbeing, further reducing health risks and healthcare costs.

What is an employee wellness program?

Employee wellness programs are health benefits employers offer, other than the traditional medical insurance benefits, according to Eden Health, a primary care and insurance navigation company for employers. The programs help employees on ways they can improve well-being and stay healthy.

They’re elective programs for employees that can run once and done or be ongoing. But the issues at the heart of any employee wellness programs are:

• Helping employees adopt healthier practices in the hopes that they’ll experience less health problems.
• Decreasing adverse-health behaviors to result in fewer insurance claims for chronic and avoidable diseases.
• Lowering the number of medical claims to reduce future claims costs, resulting in cheaper benefit renewal costs for employers and employees.
• Increasing employee engagement to produce a stronger company culture.

At one time, wellness programs were looked at by organizations as a fad, but the pandemic has demonstrated to the world how important they truly are. However, which programs are the best for your employees?

You don’t want to sink a lot of money into programs employees aren’t going to use and don’t benefit them.

The only way to figure out which wellness programs are best for your employees is to calculate their ROI on morale, engagement, productivity, presenteeism, positivity, recruiting and retention.

What’s a good ROI?

“It can be difficult to break down the ROI on wellness programs as there are numerous plans and various factors within each one,” says Eden Health’s The Top Ways to Measure ROI on Wellness Programs. “However, according to employee wellness programs statistics, reductions in healthcare-related costs are the most well-documented benefits of corporate wellness initiatives.”

Some experts say if the program helps improve your employees’ health and well-being, it’s money well spent. Others have higher expectations.

But what employers must remember is wellness program ROI doesn’t happen overnight. They’re more long-term investments.

Employees don’t just take part in a walking program and have a healthier heart the next month. It takes time. But that walking program may get them moving and following a new healthy habit. This then helps them lose weight and lowers their cholesterol, which leads to a healthier heart and employee down the line.

If it’s difficult, why should employers invest in such programs?

There are a number of reasons:

• Healthier employee habits
• Stress reduction
• Reduction in healthcare fees, and
• Enhanced teamwork.

How to measure ROI

When measuring ROI make sure you:

• Do your homework first. Figure out specifically what you want to measure before and after the program is implemented.
• Don’t just focus on money-in vs. money-out. An effective program may increase dollar out before seeing the ROI on money-in. Make sure you’re measuring the correct long-term objective.
• Realize that today’s programs incorporate mental and physical well-being, thus adding addition layers to the program and complexity of measuring the ROI.
• Try to analyze as much of a 360-degree view of all the data sources you have available to you.
• Select a realistic timeframe. Typically, 12-18 months is an optimal window, especially if you are looking at medical claims.

Remember, assessing wellness program ROI is based on changing behaviors. And you want to target those who are most at risk for adverse health events and would benefit the most from your programs. It can be a challenging task, but there are companies that can help make the process easier on employers and HR/benefits professionals.