It is no secret that Return on Investment (ROI) is a difficult metric to track in any sort of wellness initiative. We know through research, though, that workplace wellness initiatives generally deliver a strong ROI. The corporate environment laser-focuses on ROI. This makes sense, given that ROI is one of the biggest metrics by which to measure the success of any given program. The question, then, is how your organization can go about tracking it. Here are three steps to follow:
- Start by segmenting the entire population.Take the whole community that is participating in the wellness program and separate it into cohorts, or groups. These groups should be based on things like participation in or abstinence from your company’s various wellness efforts. This separation process should provide a control group, as well as an active group that engages actively with your company’s wellness efforts.
2. Define and track metrics.
Once you’ve segmented the participating population, it’s time to define and track metrics for the next twelve months. The parameters should be as follows:
- Total health claims. These may include medical and pharmacy costs for each population, and whether they rise or fall.
- Amount of change. The change you track should be either positive or negative and should relate to things like health claims, the cost for each population, and more.
- Increase or decrease in health claims. For each participant in a cohort, track the percentage of increases or decreases in the cost of health claims. Once you’ve gathered these metrics, you can monitor the percentage of change between the control group and the cohort (subtracting the control group from the cohort percentage) to determine your ROI.
- Define Why ROI Matters to Your Business.Tracking the ROI of an employee wellness program is critical for many reasons. For one, a good wellness program has far-reaching effects throughout your organization. In addition to increasing employee productivity and reducing absenteeism, employee wellness programs save your company money on health claims and ensure a more engaged employee base. One study found that effective corporate wellness programs led to a 25% reduction in absenteeism and sick leave. This saves companies money and helps create more reliable outcomes.
Finally, effective wellness programs that deliver high ROI decrease turnover rates and promote retention throughout a company. When employees feel a company invests in them, they’re more likely to return the favor.
It’s clear that having a high-ROI employee wellness plan is essential. Learning to measure the ROI of said plan, however, is the first step to getting there. SW HR Consulting can help you find the right way to plan, initiate, and measure wellness programs across the spectrum of your business functions. Contact us to find out more about our unique services and see how our expertise can benefit you.