When evaluating the need to implement workplace wellness, a large hesitation that employers typically face is the cost. Evaluating the ROI of an intangible item, like wellness, can seem tricky. You can’t prove what you prevented, because it never happened. But, there are several metrics that can be studied to assess how wellness programs drive savings and return the value on investment.
Potential Savings: Dollar Figures
The first way to measure the ROI of workplace wellness is to look at the dollars and metrics of potential savings. Most wellness programs have an ROI of $3 for every $1 spent. Undiagnosed chronic diseases and condition management are typically what drive up annual healthcare claims costs. Seven of the top ten causes of death in the United States are due to chronic disease, and a little over 50% of all adults have at least one chronic health problem. For example, more than 1 in 3 adults are obese, and obesity costs about $3,841 per occurrence. 1 in 3 adults is pre-diabetic, and an uncontrolled diabetic can cost an employer $16,082 per occurrence. Even smoking costs about $2,674 an occurrence. Hypertension costs about $1,164 per occurrence and is present in about half of all adults.
What most employers don’t recognize is not only the cost of each occurrence of the chronic disease, but how it affects the workplace. For example, each employee costs about $1,685 per year in annual productivity losses linked to missed work for health-related issues. An employer loses $341 per day, each time an employee calls in sick.
Other healthcare-related costs also contribute to the potential costs of doing nothing in terms of wellness. An onsite health clinic can replace primary care provider acute care visits, lifestyle management appointments, disease management appointments, and personal health consults. The average cost for a lifestyle management appointment is $65, for disease management it’s $100, for acute care it’s $140, and for a personal health consult it’s $65. If in one year an employer had about 1,500 visits to their onsite clinic with a variety of appointment types, they could be saving upwards of $100,000.
ROI of Productivity, Presenteeism & Absenteeism
Costs related to the workplace, such as presenteeism and absenteeism, can be saved with the implementation of a well-executed wellness program. Absenteeism costs relate to the known productivity losses associated with specific chronic conditions. When absenteeism is managed, meaning chronic conditions are monitored or eliminated, savings ensue. If in one year an employer has 50 absences due to chronic condition induced illness, the productivity losses amount to almost $20,000. This calculator is based on an average wage of $20/hour with a 30% benefit load.
Presenteeism can also cost employers. This refers to the loss in personal productivity associated with an employee who is at work, but unable to perform at full capacity due to an underlying condition. This employee may be slower-moving or may take more breaks on the job. If an employer has just 50 occurrences of presenteeism (with the same average wage and benefit load), they can be looking at losses of upwards of $150,000 a year.
Morale, Retention, and Cultural Impact on ROI
Beyond the metrics and dollar figures, workplace wellness programs can see an ROI in the impact made on each employee. Implementing wellness into the workplace shows employees that you care about their wellbeing. It serves as a benefit offering to boost hiring and retention. 89% of workers at companies that support well-being initiatives are more likely to recommend their company as a good place to work. In addition, a workplace that enhances employee health and wellbeing would encourage 7 out of 10 employees to stay at their current job.
Workplace wellness also aligns with the belief that healthier employees are more productive. 91% of employees at companies that support well-being initiatives say they feel motivated to do their best. Sick workers, who improve their health from one annual screening to the next, see a 10.8% increase in productivity. Any other employee who participates in an employer-sponsored health program increases their productivity by 4% each year.
The ROI of workplace wellness can be measured by projected savings and avoided costs relating to lab fees, acute care treatment, and chronic condition management. But more importantly, it can be measured in employee satisfaction, productivity, and effort stemming from onsite wellness options.