C-suite executives are used to thinking in terms of return on investment, so it should be no surprise that they want to know the hard return on employee wellness programs. But ROI isn’t always the best metric when it comes to measuring corporate wellness programs.
“ROI takes a long time to be realized,” says John Golden, president of product at EXOS. “For example, if you start eating better tomorrow, you may start to feel better in a few months or sooner, but you may not see the true health implications of that dietary change until many years down the road.”
Or maybe that change will help you avoid or delay problems such as cancer, diabetes, or heart disease. That’s how it works with wellness programming. Your insurance premiums may go down or not rise as quickly, but it takes time.
There have been numerous studies looking at the ROI on employee wellness programs, and the general consensus is they do pay off in a measurable way. According to a 2016 report from the U.S. Chamber of Commerce, the ROI for wellness programs is often in the $1.50 to $3 per-dollar-spent range, over a time frame of two to nine years. “It’s possible to quantify it, if that’s what your company wants, but more and more executives are stepping away from the ROI standpoint,” says Golden.
VOI: Where the benefits really are
Instead of ROI, executives are looking for value of investment from wellness programs. That’s where corporate wellness programs have more immediate and significant impact. Are your employees more engaged and productive? Are they staying with the company longer? Are you recruiting better talent? Are absenteeism and presenteeism reduced? Are there fewer accidents? All this, and more, is your wellness program VOI.
“Typically, you don’t put a score on VOI,” Golden says. “The value of your investment is partially ROI, but it’s also engaged employees who feel more in control. It’s possible to put a number on it, if that’s what the boss wants. Surveys are an easy way to do that, and they give you more ammunition in those conversations with the chief financial officer.”
The International Foundation of Employee Benefit Plans’ 2017 Workplace Wellness Survey found that 75 percent of employers offer wellness plans primarily to improve their employees’ overall health and well-being. Only a quarter indicated they did it to reduce health care costs.
Combining VOI and ROI
An integrated, well-structured wellness program that delivers VOI will also eventually show positive ROI, Golden says. “Overall, these metrics are just ways to judge whether your corporate wellness programs are moving in the right direction,” he explains. “They go hand in hand, but they’re not absolutes.”
Before you make any decision on an employee wellness program, consider your overall company goals, culture, and employees.
“You can put the same solution in two different organizations and get very different ROI and VOI,” Golden says. “You need to understand the characteristics of your culture, how the program will play in it, and whether it will truly engage employees. Don’t just look at what’s trendy. Think about whether you can see yourself participating in the program.”
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