Employee wellness programs were once more of a nice-to-have perk than a necessity. However, today, well-run, comprehensive initiatives can be highly effective in driving morale, promoting employee well-being, increasing productivity, and improving brand reputation. They also have the potential to offer substantial ROI — in some cases, the return can be as high as 6 to 1.
The rise in remote work, escalating healthcare costs, and an increasing emphasis on employee mental and physical health mean wellness programs are a must if you want to stay competitive and keep operations running smoothly. They’re not just good for employees, though. A comprehensive corporate wellness program can save you money.
Learn about the ROI of employee wellness programs here, as we explore how investing in employee well-being can save you money and offer your organization a host of benefits.
The average ROI of investing in employee wellness
Positive ROI on wellness programs is proven, and investing in them is a strategic business decision that can yield substantial returns. Whether you focus on components of employee wellness programs like mental health support or physical wellness, these initiatives can result in significant cost savings.
Some research suggests that for every dollar companies invest in employee wellness initiatives and intervention programs, they can see approximately $6 in healthcare cost savings. Other studies show that employees who participate in wellness programs for five years have lower healthcare costs and reduced healthcare use.
There’s more than just direct financial savings, though (which is compelling enough on its own). It’s also important to consider the broader benefits of employee wellness programs. Enhanced morale, reduced turnover, and improved brand reputation are some of the intangible employee well-being benefits that are more difficult to quantify but can significantly contribute to the overall ROI of employee wellness programs and initiatives.
Key benefits of investing in employee wellness programs
Companies can realize numerous advantages from investing in employee wellness programs. These initiatives can foster a healthier, more engaged, and more productive workforce, especially when they include employee wellness ideas that resonate with your team. Looking at some of the common benefits helps you understand the importance and impact that a tailored employee wellness program can offer.
Improved employee health and reduced absenteeism
Prioritizing employee well-being can drastically improve mental and physical health—a big contributor to the causes of absenteeism at work. According to research, 70% of people who engage in online therapy find their symptoms of anxiety or depression improve within 3 months. After just 12 weeks of treatment, studies suggest that 50% fewer work hours are missed, and 39% of workers say their work-life balance has improved.
Enhanced productivity and performance
Access to employee health and wellness programs enhances productivity and performance. Research conducted by Talkspace found that employees who engage in therapy see a 36% jump in productivity. The boost might be attributed to better physical or mental health, which leads to increased focus and energy at work. Other positive impacts of wellness programs, including reduced stress and anxiety, can further enhance job performance and address the various causes of low productivity at work.
Lower healthcare costs and insurance premiums
Workplace wellness ROI is compelling. A comprehensive corporate health program can lead to substantial savings and a reduction in healthcare costs and insurance premiums. In short, promoting healthy lifestyles and offering access to preventative care and physical or mental healthcare can reduce the incidence of expensive medical conditions and treatments.
Increased employee engagement and retention
Wellness programs can help boost employee engagement and retention rates. When employees are engaged, they’re more likely to be satisfied with their jobs and feel like valued team members, which means they’re more likely to be loyal to their company.
Measuring the ROI of your wellness program
Being able to demonstrate positive ROI on employee wellness programs will help you justify the implementation and garner ongoing support. To measure ROI accurately, though, you need to know which key metrics to look for and understand which tools and methods to use.
Key metrics to measure ROI & VOI
When evaluating Return on Investment (ROI) and Value on Investment (VOI), you can track metrics like:
- Healthcare costs: The most direct metric, tracking healthcare costs, means analyzing expenses related to hospital visits, medical claims, or overall healthcare usage. Effective wellness programs can significantly reduce each of these costs.
- Absenteeism rates: Monitor rates before and after you implement a wellness program. The insights you gain will help determine if your initiative is worth the investment. A decrease in absenteeism indicates improved employee health and likely means reduced productivity loss due to sickness.
- Employee satisfaction: Use surveys and feedback mechanisms to gauge employee satisfaction and usage. High satisfaction levels generally mean increased participation and better ROI.
- Productivity levels: To accurately measure productivity, you need to assess output levels, efficiency, and work quality. Improved health, stress levels, and engagement are often linked to productivity gains.
- Employee retention rates: High retention rates signal employees feel valued, supported, and satisfied with their company. Effective wellness programs can enhance job satisfaction and loyalty and reduce turnover.
Tools and methods for measuring ROI
Knowing you need to measure workplace wellness ROI and knowing how to do it are 2 crucial things. To effectively measure the ROI of your wellness programs, use the following:
- Health risk assessments (HRAs): HRAs are simple surveys that help evaluate employees’ health behaviors and risks. They offer baseline data to measure improvements over time and identify areas where wellness programs have the most impact.
- Biometric screenings: Health screenings, such as blood pressure, cholesterol, and glucose level tests, can track physical health improvements and identify early signs of possible issues.
- Employee surveys and feedback: Gathering feedback through surveys helps you understand what your employees think about wellness programs.
- Cost-benefit analysis tools: Without the right cost-benefit analysis tools, it can be difficult to quantify the financial savings you’re gaining from reduced healthcare costs and absenteeism. They provide a clear picture of the ROI you’re getting out of a wellness program.
- Productivity tracking software: Productivity tracking tools monitor output, efficiency, and performance. Software like this provides concrete data on improvements.
- Data analytics platforms: Advanced analytics platforms integrate various data points — like health metrics, absenteeism and productivity rates, and cost — to offer comprehensive insight into the ROI of your wellness program.
Strategies for maximizing ROI
Maximizing workplace wellness ROI takes strategic planning, continuous review, and optimization. The right strategies can help ensure you get the most out of your program.
Customizing programs to fit employee needs and preferences
To be the most effective, wellness programs should be tailored to your workforce’s needs and preferences. Customizing as much as possible will result in higher engagement and participation, which will lead to better health outcomes and increased ROI.
How to do it:
- Conduct needs assessments
- Offer flexible programs
- Personalize health plans
Promoting a culture of wellness within the organization
Normalizing and prioritizing a culture of wellness is vital to the success of your program. If wellness is an integral part of your organizational culture, your employees are more likely to be willing to embrace it and participate in initiatives and offerings.
How to do it:
- Leadership support, buy-in, and engagement
- Communication and education
- Integrating wellness into policies
Leveraging technology & data analytics for program optimization
Today, data analytics and technology make it easy to assess and enhance the efficiency and effectiveness of everything you do, including the wellness programs you implement. Leveraging tools will help you understand potential ROI on your wellness program so you can make data-driven decisions instead of just hoping something will work
How to do it:
- Wearable devices and apps
- Data analytics platforms
- Use feedback mechanisms and tools to collect input
Offering incentives to encourage participation
Incentivizing participation can significantly boost usage and motivate employees to consistently engage in wellness activities and initiatives. The more employees use your program, the better their health outcomes and the higher your ROI will be.
How to do it:
- Financial rewards
- Non-monetary incentives
- Tiered incentive programs
Invest in employee and company health
Investing in employee wellness programs is a strategic move that does more than just improve the health of your workforce. When you prioritize employee well-being by following workplace wellness trends and implementing customized initiatives, you can see significant financial returns through enhanced productivity, increased engagement, reduced turnover, and more.
A comprehensive wellness solution should address your employees’ mental and emotional needs. With Talkspace, you can provide your team with access to online therapy for employees, leading to a healthier, more engaged, and more productive workforce. By partnering with Talkspace, you're not just investing in your employees’ health—you're investing in your company’s future.
If you’re ready to take the next step, request a demo today to discover how Talkspace can help you create a thriving workplace and see substantial ROI from employee wellness programs.
Sources:
- “What’s the Hard Return on Employee Wellness Programs?” 2010. PubMed. December 1, 2010. https://pubmed.ncbi.nlm.nih.gov/21188899/. Accessed August 4, 2024.
- “The Real ROI for Employee Wellness Programs.” n.d. Corporate Wellness | Employee Well-Being. https://www.corporatewellnessmagazine.com/article/the-real-roi-for-employee-wellness-programs. Accessed August 4, 2024.
- Mattke, Soeren, Harry H. Liu, John P. Caloyeras, Christina Y. Huang, Van Busum Kristin R, Dmitry Khodyakov, and Victoria Shier. 2013. “Workplace Wellness Programs Study: Final Report.” RAND. May 30, 2013. https://www.rand.org/pubs/research_reports/RR254.html. Accessed August 4, 2024.
- Hull, Thomas D., Matteo Malgaroli, Philippa S. Connolly, Seth Feuerstein, and Naomi M. Simon. 2020. “Two-way Messaging Therapy for Depression and Anxiety: Longitudinal Response Trajectories.” BMC Psychiatry 20 (1). https://doi.org/10.1186/s12888-020-02721-x. Accessed August 4, 2024.