What’s your wellness ROI?

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The effect of improved employee health on productivity, absenteeism and health care costs are well documented. Most organizations now value wellness programs as a means to lowering their health care spend. A recent Sun Life Financial study found that 76% of organizations offer at least one wellness program, however the same study found only 26% take strategic approach, including calculating ROI.

Warren Shapell, president of EAP Specialists, says putting more emphasis on ROI is important for HR to win support for programs from senior management.

“Most of the time senior management are going to look at cost and when you talk about cost you have to talk about return. If HR goes equipped with ROI estimates and a plan for how they will measure the return they’ll have a higher success rate and be able to get the senior management to support the concepts.”

The effect of wellness programs to the bottom line can be difficult to measure, not least because wellness programs can be wide reaching- anything from simply offering healthy snacks in meetings to a targeted smoking cessation program.  A Harvard University Meta study estimates an ROI of $3.36 to every dollar spent, while a Canadian study puts it at $4 to $5.

Shapell says cause and effect is the bane of quality data on ROI.

 “It’s really difficult to show it conclusively,” he says. “For example we could measure absenteeism before and after a wellness program is implemented but the cause and effect is not necessarily the wellness program, it could be a change in management, it could be economic conditions, it could be all sorts of reasons – it’s difficult but it’s also very important to show.”

It may be beneficial for HR to measure data for other reasons. Many insurance companies now guarantee a lower rate if an organization has a wellness program in place. But they have to be able to show improvement to the health of their employees.

An intelligent diagnostic will evaluate organizational health, organization and management factors, as well as the effect of wellness programs (through biometrics, absenteeism, participation and others) on employee health. Shapell says it’s also important to look at engagement as well as participation.

“HR often concentrates on participation because it’s easy to measure, but the thing that’s often overlooked is the measure of satisfaction with the wellness program – if a company listens carefully employees will give valuable feedback on program design that will lead to further success.”

He also warns against relying on data from corporate wellness consultants.

“If you hire a consultant to implement wellness programs for you they’re going to bias their responses,” he says. “If they do measurements or surveys they are going to bias their responses to support the programs they have implemented.  You should hire yet another party to do the measures or you can collect the data yourself.”



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