How to Maximize the ROI of Your Company’s Wellness Program

July 8, 2015

Business is all about results, and wellness programs are no different. If you’re one of the 90 percent of employers who offer wellness incentives, you probably want to ensure your company’s efforts are actually paying off.

And there’s more to measuring the ROI than just checking the bottom line.

Gauging Effectiveness: Hard ROI vs. Soft ROI

In the world of corporate wellness, there are two equally valid ways to assess the effectiveness of wellness programs. We refer to them as “hard ROI” and “soft ROI.”  The set of metrics you decide to track (or both) depends on your unique company goals.

Hard ROI uses the bottom line for making decisions about wellness programs. Usually, this type of initiative aims to lower healthcare costs and often focuses on high-risk employees, such as those suffering from diabetes, obesity, or smoking addictions. Leaders who focus on hard ROI results want a clear, measurable monetary return on capital.

It’s worth noting that there is serious debate around whether reliably achieving hard ROI is even possible. In one camp, proponents point to research studies like this one: A Harvard University study found that for every dollar spent on wellness programs, medical costs decreased by approximately $3.27. Other studies report that successful wellness programs can increase revenue by 40 percent and shareholder returns by 28 percent.

In contrast, opponents of hard ROI criticize the methods of these studies, suggesting there are too many factors involved to know what causes what. Companies rarely measure hard ROI well, but when they do, it’s a powerful tool.

Meanwhile, soft ROI is a measure of the degree to which employees become more energized and excited to go to work each morning. The focus is on higher productivity and morale along with lower absenteeism and presenteeism. It’s less rigorous, but it may be your best bet out of the gate.

Some proponents of soft ROI believe it’s extremely difficult to measure results financially, but they feel like a high participation rate and a clear change in work culture are proof enough of success. Many others point to correlation studies like the one from Harvard that found that absenteeism costs dropped by about $2.73 per dollar spent during the same year the wellness program was active. Yet an Optum study is cited suggesting the average productivity savings per participant per year is approximately $353 while wellness programs are active.

Soft ROI advocates don’t claim causation, but they link wellness to success nonetheless. To focus on soft ROI, utilize surveys, key observations, and committees to best measure the overall impact.

The 3 Key Elements of a Successful Wellness Program

Because there’s such a wide spectrum of goals and expectations for wellness programs, your decision to measure soft ROI, hard ROI, or both will come down to your unique wellness goals.

Whichever ROI approach you choose, designing programs that actually achieve any kind of results is the hardest part. To get started, here are three key elements that many successful employee wellness programs have:


1. Whole Company Buy-In

Multiple studies have found that a strategic focus is the main characteristic that dictates a program’s overall success. A dedicated leader along with a wellness initiative that coincides with the company’s business strategy can go a long way to achieving success.

When your company’s stakeholders are on board to improve physical, intellectual, emotional, social, and financial well-being, participating employees begin to see wellness as an integral part of their work culture. Top-down encouragement and a company mission is definitely fuel for companywide enthusiasm.


2. Inclusive Initiatives 

When creating a wellness program, it’s tempting to single out specific employees. It’s understandable, but unfortunately, it will likely insult your greatest asset: your people.

Even if you’re targeting high-risk individuals to help your bottom line, you’re better off with a program that targets everyone. If everyone is taking part in wellness, high-risk employees feel like they’re a part of something, not singled out. As a bonus, you won’t have to worry about being sued for discrimination.


3. A Baseline to Measure Against

Whether you’re measuring soft or hard ROI, results are meaningless if you don’t have a snapshot of employee health from the start. By using pre-assessments, you’ll see where employees are on day one. Once wellness programs are over, you’ll want to measure the same items immediately, as well as six, 12, and even 18 months later.

You may want to use health risk assessments or even biometrics, but don’t underestimate the power of a well-designed survey or focus group. If you ask questions related to wellness knowledge, attitudes, and, most importantly, habit goals and success rates, you may get some deep insights into employee health.

We’ve worked with companies with both soft ROI and hard ROI goals and have seen some incredible results. When companies focus their energy, include all employees, and get measurement right, they can achieve impressive results. To explore your own company’s ROI goals, visit our contact page to connect with us for a 15-minute discovery session.

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