How to measure the ROI of a wellbeing program

After the disruption of COVID-19, many companies realized that employee wellbeing and company success are intertwined. And while this has always been true, recent world events shined a light on the need for holistic, impactful employee wellbeing support.

It is now undeniable that employee health and happiness benefits everyone. In fact, research shows that a successful wellbeing program can even benefit company budgets with healthcare cost savings. Today, the most successful organizations are prioritizing their employees’ happiness, satisfaction, and engagement as much as any other strategic goal.

But how do you put a price on employee wellbeing? How do you measure something that seems so multifaceted and nuanced?

Holistic wellbeing programs typically have a great ROI, or return on investment, increasing productivity and delivering valuable cost savings. This guide covers what your employee wellbeing program should achieve, the difference between ROI and VOI, and how to measure the success of your company’s wellbeing program.

Setting goals for your employee wellbeing program

Wellbeing is important in all areas of life, the workplace included. Companies that offer employee wellbeing programs often see benefits like increased productivity and increased employee engagement. Overtime, these benefits can lead to significant company cost savings including a 10% improvement in customer ratings, an 18% increase in sales, and a 14% increase in productivity.¹

Not all wellbeing programs are created equal. What works for one population might not work for another. That's why it's essential to set unique goals based on the traits of your workplace and employee population.

An effective wellbeing program encourages employees to make healthier choices and overcome challenges they encounter across all the areas of wellbeing. This means going beyond physical and mental health initiatives to include financial health, career wellbeing, community connection, and more.

When collaborating with Navigate, each of our clients is assigned a committed account manager who collaborates with them to formulate objectives for their unique employee wellbeing program. Over the course of each year, our team provides expert guidance on how to reach wellbeing goals designed for their specific population.

Common wellbeing program goals could include reducing healthcare costs, increasing awareness of the benefits you already offer, or increasing employee engagement and satisfaction rates.

All of these goals can contribute to a healthier work culture and increased employee happiness.

VOI vs ROI of a wellbeing program

There is a difference between return on investment (ROI) and value on investment (VOI). ROI means the difference between how much you invest in a project, and how much money you saved from that project. For any project you take on, you’ll want to have a high ROI, otherwise, it won’t make good business sense.

Value on investment, or VOI, is a measure of the impact of a project on a company overall. The VOI of a project is more complicated to measure.

The main difference between the ROI and the VOI is that the ROI is a financial measure. VOI is that financial measure plus other metrics. This includes the quality of health, quality of life, and productivity level of employees.

A good VOI will look like low absenteeism, higher morale, more productivity, and less turnover. The VOI of a project is linked to the ROI, since the ROI is a part of the VOI, after all. Generally, the higher the overall VOI, the higher the ROI will be. You cannot have one without the other.

How do you measure the success of an employee wellbeing program?

The main goal of a wellbeing program is quite simple. You're on a mission to improve employee health, increase productivity, increase talent retention, and ultimately save the company money while bettering the lives of your employees.

Smart companies implement effective wellbeing programs for their employees’ benefit. So, how can you tell if your efforts are working or not? The following section covers some things you may see as the result of a successful wellbeing program.

Increased employee participation

One good way to tell if your wellbeing program is working is if employees are participating in it. If most of your employees are participating, that is a clear indication that it is engaging and meeting their needs.

To encourage more employees to participate, consider offering perks and or incentives, like financial benefits or additional paid time off for participating in certain activities. Also, make sure the programs and activities that are offered are ones your employees want; this can go a long way toward increasing employee participation.

Greater cost savings

Another great indication that your wellbeing program is working as intended is if you start seeing savings on health benefits. One of the main ways that wellbeing programs help is by increasing mental and physical health and reducing the cost of chronic conditions. What does this look like in practice?

On average, participants using the Navigate wellbeing program saw the following improvements in their chronic conditions over two years.³

This saves the company money over time on health benefits.

Improving mental and physical health is also a large part of increasing the happiness of your employees, which impacts productivity, too.

Greater employee satisfaction

When your company is focused on improving employee wellbeing, you should see an increase in employee satisfaction. This is an important metric to consider. When employees are satisfied and fulfilled in their work, they are more motivated to do their best. They are also absent less often.

You can track employee satisfaction within your wellbeing program through features like Navigate's Pulse Surveys. These quick hit questionnaires appear within each participants wellbeing platform homepage and are a great way to collect data.

You can also look to metrics like your level of absenteeism to see how often employees show up to work.

Higher employee engagement

High employee engagement leads to a happier, safer, and more successful workplace. On average, companies with highly engaged employees see an 81% decrease in absenteeism and a 14% increase in productivity.¹

Promoting a culture that supports every employees' wellbeing is essential to building a highly engaged workforce.

How you measure employee engagement depends on your individual goals. If one of your goals is to connect employees with a primary care provider, that particular area of engagement is important to measure.

A good wellbeing program can help you accomplish this goal! For example, 84% of Navigate program participants visited their primary care physician in 2022.³

If you're looking for more generalized metrics, try analyzing your wellbeing program and group challenge participation rates. You can even determine what percentage of your population attends work-hosted social events.

More successful employee acquisition efforts

When on the job hunt, employees are looking to wellbeing initiatives as a way to measure a company's culture. In fact, 87% of employees said they consider health and wellness offerings when choosing an employer.²

A high-quality wellbeing program can help turn turn existing employees into active advocates of the employer's brand.

This can be as simple as a positive review on Glassdoor, an engaging social post on LinkedIn, or even recruiting new talent through recommendations.

Employees will always talk about their experiences at work. An employee wellbeing program and strategy will help make sure the conversation is a positive one.

Less employee turnover

The pandemic changed how people live and work. Balance and wellbeing are now top of mind. Instead of squeezing personal priorities in around work—many are now focused on doing the opposite.

If you have high employee turnover, this is a telltale sign that there is a problem in need of attention. Leverage exit interviews to discover why employees are leaving and if there are any trends you can address within a holistic wellbeing strategy.

So, what can employers do to keep their best talent and avoid the cost of employee turnover?

Help employees navigate this new normal with a culture that aligns with their priorities and personal wellbeing. When employees are happy at a company, not only will they stay, but they’ll also recruit new talent, too.

Measure the ROI of employee wellbeing at your company

An effective wellbeing program has the power to introduce significant cost savings through increased employee satisfaction, engagement, retention, acquisition, and more.

Make sure you are getting the most out of your wellbeing program—for your employees and your company's financial bottom line

Download this free report to help you measure the ROI of your employee wellbeing strategy.

Sources:

1. Gallup Workplace: Employee Engagement vs. Employee Satisfaction and Organizational Culture
2. 62 Employee Wellness Statistics Every Employer Should Know in 2023
3. Navigate ROI/VOI reporting analytics 2022