Five Key Factors to Measuring Wellness ROI
As we discussed in our last post, those tasked with the job of overseeing company wellness programs often find it difficult to quantify the success of those programs in a definable way. The problems facing HR departments when tasked with establishing the ROI on wellness are many, from program structures that don’t provide enough trackable data, to the difficulties of measuring intangible successes in terms of money, to the simple fact of limited time, resources, and manpower. These issues are often compounded by unrealistic expectations and a desire for quick results.
Since there are so many difficulties involved in measuring the ROI of wellness programs, it would be easy to just give up on trying to get an accurate read of a program’s success. But measuring ROI isn’t just a useful extra: understanding what is and isn’t working in any wellness program is crucial to its long-term success. Measuring progress and collecting data in the following five broad categories will give HR departments and upper management a better view of what is really being accomplished by their wellness programs.
1) Level of Engagement
The perfect wellness program is useless if employees are not participating in it. There must be clear and definable reasons for employees to become participants. Incentives must be defined and deployed. Strong leadership from management and an active wellness committee will drive participation for all employees and encourage healthy behaviors throughout the organization. The percentage of employee participants is a metric that must be included in an accurate ROI calculation.
2) Health Trends
Once benchmarks have been gathered at the start of the wellness plan, it is imperative to measure your company's rates of smoking, obesity, hypertension, high cholesterol, depression, diabetes, heart disease, and other key health factors. Are they better than before? If so, that is a good indicator that your wellness program will have a positive ROI. While these results may not directly translate into immediate material profit for your business, they will result in cost savings over the long term.
3) How Your Employees Use Health Care Services
A primary goal of an employer-driven wellness program is the reduction of unnecessary use of health care services. For instance, if your employees increase their use of primary care physician visits for preventive and non-urgent care, they’re far less likely to need an expensive hospital stay later on. This will drive down health care costs, which should result in lower insurance costs for the company.
4) Performance Trends
Another indicator of the success of your wellness program is a lower employee absentee rate, lower short-term disability costs, and even positive employee performance metrics. While all these factors can be influenced by things other than your wellness program, there’s no doubt that wellness initiatives contribute to improved outcomes in these areas.
5) Employee Satisfaction
Like employee performance, employee satisfaction can be attributed to a variety of factors. However, quality wellness initiatives should drive employee satisfaction rates up. Promoting a culture of health and well-being makes employees happy, especially when the company makes a concerted effort to help them achieve their health goals. Happy employees are more productive overall, and less likely to leave, lowering hiring costs.
The measurement of wellness ROI is not an exact science, but measuring these five indicators can provide an excellent starting point for calculating real results. Working to craft, implement, and maintain a well-supported wellness program may be difficult, and it will almost certainly take a few years to see tangible savings. Nevertheless, it is worth the investment if it has a measurable impact on the health of your workers and the profitability of your enterprise.
For additional information about crafting a wellness plan that works for your company, please contact us. As benefits specialists, we can assist you throughout the process, from plan development to implementation and monitoring.