How To Measure The ROI Of Wellness In The Workplace

Henry Albrecht

Here’s a simple truth: Measuring ROI is hard.

Measuring ROI for workplace wellness is even harder. Why? It’s a complicated science that takes time and money. Here are a few of the barriers:

  • Money: Most employers can’t handle analyzing health data, insurance claims, health risks, and other factors for all their employees on their own. They need the help of analytics companies and software ─ and that gets expensive.
  • Time: The results of initiatives aren’t always immediate. For example, employers may see a reduction in the number of employees who smoke right after they implement a smoking cessation initiative. But the health benefits associated with the program, like reduced risk for lung cancer, could take years to manifest.
  • Outside factors: Analytics aren’t cut-and-dry. And correlation and causation are different things. Employers can’t look at data and definitively say one initiative caused a change in health outcomes. Common sense and causal certainty occupy different realms in the business world. Outside factors like inflation, health plan choices, a few high-cost claims, industry demographic shifts, hiring, and firing can all confound your bean counters.
  • Multiple correlations: Measuring wellness involves multiple outcomes, and in most cases, they’re all statistically correlated. In other words, analytics typically show that health, well-being, productivity, and profits are closely related. But it’s hard to determine what influenced what, and what the relationships mean.

Measuring the ROI of workplace wellness may not be easy. But insights pulled from analytics can improve your wellness program and help you get the most from it.

How do you make the process easier and more effective? Start here:

Choose the right metrics

Measuring ROI starts with deciding what you want to measure. Which metrics are most important to you? What do you want the program to achieve? What’s most valuable to your company?

There’s no right answer. We recommend looking at the overall company goal, the goals of the HR department and the specific goals of the wellness program itself. Align all three for maximum impact.

You might want to track engagement and employee satisfaction. My company, Limeade, found that 73 percent of surveyed organizations measure the success of their workplace wellness program by employee participation, employee results, and program satisfaction.

If you’re more concerned with the impact wellness has on business outcomes, you might measure productivity and customer satisfaction.

Whatever you decide to measure, be specific and stay focused. It’s easy to get caught up on the multiple factors and outcomes in play.

Use data to make strategic decisions

Once you know what you’re looking for, measure it. Then use the results to make the program better. Let’s say your results show that your program isn’t improving stress levels as you hoped. Does that mean the program is worthless and you should scrap the whole thing? No.

Instead, dig deeper to find the source of the problem. Use data to make strategic decisions that improve workplace wellness and save you money. For example, you may be spending your money on initiatives that address diabetes and diabetes prevention. But maybe that money would be better spent on financial well-being and stress. Or maybe team-building and work-life balance initiatives are better suited for your employees and your goals.

Don’t just measure the ROI to determine if workplace wellness is effective or not. Use analytics and metrics to continually improve the program.

Focus on the human side

Wellness programs exist to support and benefit your most important asset: your people. So don’t focus on reducing costs ─ a health-cost-centric worldview misses the point. Focus on how to make employees happy, healthy, and full of energy rather than reducing your insurance premium.

When employees feel like their employers actually care about their well-being, they’re 38 percent more engaged and 18 percent more likely to go the extra mile, according to a 2015 survey by Quantum Workplace and my company, Limeade.

Keep your employees at the center of ROI measurements. Are the programs really addressing their needs? Do they show employees you care? What can they do better?

When taking on the difficult task of tracking the ROI of wellness programs, don’t lose sight of their true value. Focus on how initiatives improve employees’ well-being and in turn, how that impacts business outcomes.

How do you measure the ROI of your wellness program? What metrics do you focus on?

For more employee wellness strategies, see Is Your Wellness Program Actually Stressful? How To Make It Better.

 


Henry Albrecht

About Henry Albrecht

Henry Albrecht is the CEO of Limeade, the corporate wellness technology company that measurably improves employee health, well-being and performance. Connect with Henry and the Limeade team on Twitter, Facebook and LinkedIn.