When does wellness work?
Effective programs move beyond ROI to look at value on investment.
Employee wellness programs burst onto the scene with a promise that was too good to pass up:
Healthier employees = reduced insurance costs, greater productivity and higher profits.
The good news is a well-executed wellness program can deliver on this lofty objective, says Hans Hage, vice president of product development for StayWell in St. Paul, Minnesota.
“Every indication we have supports the conclusion that employee well-being programs can have a positive financial impact on a company, when implemented in a comprehensive way, using best practices,” he says. “Most studies report break-even returns or better after two or more years of program implementation, and several studies suggest a $3 return for every $1 invested in the program after three-and-a-half years.
”However, some employers become discouraged if they don't see an immediate, quantifiable return on their investment. This is why many industry leaders now recommend a new paradigm that looks beyond just dollars and cents.
“More and more, employers are focused on outcomes, but those outcomes are increasingly expanding beyond reduction in wellness costs,” Hage says. “With the aging boomer workforce and the need to attract and retain top millennial talent, more employers are looking for structured choices with their program offering. What this equates to is an emphasis on total well-being—increasing productivity and retention, decreasing absenteeism, and looking at employees as valuable investments that they want to see learn and grow."
This means a broader focus not only on ROI, but also on what Hage calls VOI—value on investment. These metrics can be difficult to measure in the short run, but can have a significant impact on a company's fortunes over the long haul. Wellness programs can:
Build employee loyalty and retention
Improve job satisfaction
Reduce costs related to absenteeism and on-the-job productivity loss
Improve individual and organizational performance
Jared Smith, national partnership manager for Interactive Health Inc. in Chicago, cautions against simplistic models that attempt to correlate wellness initiatives with specific dollar figures.“There are many wellness vendors out there that claim to show ROI,” he says. “However, many of their models and methodologies are complex, based upon assumptions that do not provide sufficient quantitative evidence to substantiate their claims. The best way to address the conversation and concerns around ROI is to shift the focus of the discussion to cost avoidance and risk migration, concentrating on key conditions.” Read more here, https://buff.ly/2uVDU5e