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What’s the ROI on Employee Wellness Programs?

Nothing in life is free – well most things aren’t. But delivering a comprehensive corporate wellness program does inevitably come at a cost – especially if companies want to ensure their employees health and mental wellbeing are looked after.

So is it worth investing in implementing an employee wellness program? What will employers get out of spending money on corporate wellness? Our 10 experts in this field explain just what employers will get in return for providing a health and wellness program for their staff.

Nick Patel

The concept of value on investment (VOI) is slowing replacing return on investment (ROI) in the employee wellness industry.  This means the value employers look for and realize from employee wellness programs is moving from a strictly financial return on reduced medical costs to one that includes the financial and non-financial benefits from healthy and engaged employees, including higher retention, satisfaction, and productivity.  For many organizations, the areas they are realizing value from employee health are expanding, delivering unanticipated benefits.  For example,  Metro Nashville Public Schools saw their wellness program improve student achievement.

Nick Patel, CEO of Wellable.

Liz Walker

The long-term ROI on investing in the wellness of your employees is tenfold. Long-term, you should see a reduction in costs related to health and presenteeism, number of employee absences, length of time employees are away from work, and the cost of sick pay. You’ll also have a more engaged and productive workforce who knows you care about their overall wellbeing.

Liz Walker, HR Director, Unum UK.

Sammy Courtright

Corporate wellness programs provide tons of benefits to businesses that not only directly impact employees but also provide a high ROI. With the implementation of a wellness program, both employees and companies see health benefits in the short-term. While the savings and overall impact is small at this point, the return on investment begins to quickly emerge. As employee health improves, company healthcare costs begin to drop, and productivity and teamwork rise. Here’s more proof: One study found that healthcare costs decline by $1,421 per participant YOY. Another big-name company saved $250 million over 10 years after implementing a wellness program. Finally, after starting a workplace wellness program, one major hospital saw an 80% reduction of day lost to illness and injury and a 64% decline in modified duty days, resulting in $1.5 millions in savings.

Sammy Courtright, founder and CEO of Fitspot Wellness.

Lucy Tallick

The return on investment to any organisation depends on their goals and their measurements of these goals. Many companies that I work with will be looking for pure VOI, with the importance of positive real life feedback and improvement in lifestyle and or health of individuals being the key driver of the investment. Others are focused around employee retention, or improving absenteeism figures – it really depends on an individual’s pain points and goals. Either way, there is always a positive return on a wellbeing investment, whether this is commercial or the physical health of your employees’. You could say it’s a win : win scenario.

Lucy Tallick,  Head of Wellbeing at Reward Gateway.

Alaana Linney

Nuffield Health data shows our corporate wellbeing clients have saved over £10 million in lost working days. An employee wellness program is essentially a preventative strategy for lowering the risk of costly absences and staff turnover, which can hit small businesses particularly hard. However, if employee engagement is low, it will be difficult to realise a good return on investment. Companies need to make sure they invest time, as well as money, into their wellness program, communicating clearly and regularly about what’s on offer to increase and maintain take-up.

Alaana Linney, Director of Business Development at Nuffield Health.

Joe Gaunt

There’s no ‘one size fits all’ output for an employee programme.  Like people, all businesses are different.  Whilst one business will want to improve staff retention another will want to attract the best talent, and another will want to reduce absenteeism and so one.  Therefore, the ROI or the value of investment (VOI) should and will differ.  A recent study published in the Journal of Occupational and Environmental Medicine showed that companies recognised by the C. Everett Koop National Health Awards for nurturing a culture of health, by specifically focusing on the wellbeing and safety of their workers outperformed the stock market by a factor of 3:1 from 2000-2014.  And companies that rate highly for their employee-focused cultures show similar results. To effectively evaluate any programme you need a clearly defined strategy and regular reporting.

Joe Gaunt, CEO of Hero Wellbeing.

Shaun Bradley

Although it is difficult to exactly quantify the financial impact of a wellness programme, what we do know is that engaged employees generally generate better organisational outcomes. If a wellness programme is effective and employees have tools to proactively manage their wellness that in itself could positively impact engagement. Employees can address issues early, before they get too serious or even proactively prevent issues. The sooner we act upon an issue, the more likely we are to solve it before it turns into something more serious. Other measures that are useful in determining ROI include the number of sick days taken, overall productivity as well as engagement and job satisfaction scores over time.

Shaun Bradley, Director of People at Perkbox.

Ruth Tongue

The ROI on wellbeing programmes is clearly evident, yet we recommend that companies now consider VOI (Value on Investment). This means thinking less about the healthcare or sickness absence costs and looking at benefits of a holistic wellbeing strategy such as improving job satisfaction, motivation, reducing turnover and improving engagement at work. These outcomes are harder to measure but that’s where we can help!

Ruth Tongue, Co-founder of Elevate.

Sam Fromson

It depends on the type of program offered.  Programs targeting specific issues like back pain often deliver a relatively big return over a short period.  But their reach in terms of people is limited.  More holistic approaches which address the mental and physical wellbeing of all a company’s people tend to deliver sustained behavioural change over a longer period. They may also to identify specific areas which require more targeted interventions, increasing overall ROI.  Either way, evidence suggests ROI can vary from £2 for every £1 spent to £34 depending on the type of program.

Sam Fromson, Co-founder of Yulife.

Jill King

The reality is that your return-on investment, or “ROI” equation, is very complex – on both sides. Many elements of wellness/wellbeing programs are complicated and make it difficult to research (executive buy-in, business conditions, vendors, following best practices, etc). On top of that, for wellbeing, the definition of ROI can be as narrow as the reduction in your medical claims. The goals of many wellbeing programs are likely far broader than this, so start by addressing how you define ROI and then adjusting it. Value On Investment (VOI) as a model is more comprehensive, flexible, and adaptable to a company’s specific needs. At Virgin Pulse, we have shown positive impact on business and talent concerns like absenteeism, safety, performance and productivity, turnover, and even customer quality and customer satisfaction.

Jill King, Director of International Markets at VirginPulse.

By Ushma Mistry

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