Is there a return on investment for wellness programs? Some say yes, some say no.
Lately there has been a growing controversy as to if and how workplace wellness programs produce a return on investment. There have been some claims that state a return of $25 for every $1 spend on wellness. Others have said that there is no return on investment. In order to put this controversy into perspective it is important to define some key items.
First what does return on investment (ROI) mean? According to Wikipedia
“ROI is the concept of an investment of some resource yielding a benefit to the investor”. In this discussion the investor is the corporation or sponsor of the wellness program, the resource is money and employee time.
Second what is workplace wellness? I could write paragraphs on that but from my perspective it is providing an organization’s employees with the tools, resources and direction to lead a healthier lifestyle. According to the Chapman Institute
, “A worksite wellness program is an organized program in the worksite that is intended to assist employees and their family members (and/or retirees) in making voluntary behavior changes which reduce their health and injury risks, improve their health consumer skills and enhance their individual productivity and well-being”.
Ok so now we know what an ROI is and we know what workplace wellness is. So how do we prove an ROI for workplace wellness? One method is to compare what is spent on medical claims year over year to look at the (hopefully) reduced costs of claims. This has been the traditional way of evaluating wellness. If you conduct a wellness program your organization’s medical costs will go down.
The problem with this method is that sometimes claims go up even with the most comprehensive workplace wellness program. That can happen because bad things happen to good people. Traffic accidents, premature birth of a baby, inherited disease (breast cancer for instance), etc., all drive up medical claims. Workplace wellness will not prevent these types of events. Further, medical claims for domestic partners and dependents who are not part of the wellness program can also drive up medical costs. Also with a workplace wellness program in place that includes blood tests, health risk assessments, health education information, more folks will tend to take better care of themselves. That is good, but it may mean employees will use more health care services and medications and hence higher cost for medical.
The real payback is how talent contributes to the overall success of the organization. The first step in capitalizing on employee talent is to make sure that they are engaged. Having high levels of employee engagement is key to success for both the individual and the corporation. But this can be a challenge. According to an article in the Wall Street Journal
, “52% of all full-time workers in America aren't involved in, enthusiastic about or committed to their work”.
What to make of this? The real ROI for workplace wellness is in driving engagement corporate wide. Wellness is one of the few things that all employees can share. And share at the same level. From the CEO to the most junior employee they can all participate in the wellness program. Workplace wellness programs that are shared by all communicate to employees that their employer cares about their health. Additionally being part of something is important to most employees. When employees feel that they are valued members of the team then higher levels of engagement will result.
The cost of workplace wellness as compared to the total cost of talent is very small. Moving the needle in a positive direction on employee engagement is where the big ROI comes in. The bottom line is workplace wellness is one of the few programs that delivers the message that the organization cares about the employee as an individual, is willing to invest to improve their lifestyle but needs your cooperation and engagement to make it happen.
When organizations get this message across clearly to their employee’s, workplace wellness ROI will go through the roof!