As the New Year approaches you'll be looking to make sure that your wellness programme has paid dividends over the last 12-months and you'll want to be sure that what you have in place for the coming year is going to make a real, positive difference to your organisation.
So this month we've put together an article that will both help you look at the numbers you can work with to establish the desired ROI for your wellness programme and we've also included some results that it's hard to put a price on.
Calculating ROI of a Wellness Programme
At first glance, calculating an acceptable return on investment from a wellness programme would appear to be a fundamental requirement for getting the programme off the ground. If you intend to invest time and money into designing and delivering a programme, you’ll need to justify this investment by establishing precisely what you’ll get back in return for your efforts.
The only drawback is that quantifying the benefits of wellness programmes can be quite difficult. It’s a bit like spending money on advertising or marketing – you know that investment in these key areas of business brings in new revenue, but it can be hard to tell which elements of this budget are most successful. Similarly, when it comes to wellness, it may be clear that initiatives are contributing towards an improvement in your business success, but it may be difficult to isolate which ones are making the biggest contribution.
It can be fairly straightforward to establish the ROI for some initiatives. For example, if you know that you lose a specific number of staff days, and therefore a related financial amount in lost productivity or reduced profitability due to musculo-skeletal issues, you can introduce workstation assessments or manual handling education to reduce the risk of such injuries. You could consolidate this with physiotherapy, chiropractic or osteopathy interventions for when these injuries do arise. You will then be able to very accurately calculate the relationship between how much you spend on these initiatives and the reduction in the amount of money lost due to musculo-skeletal related absence issues.
For other interventions such as health screenings, wellness workshops, individual lifestyle coaching, and team activity sessions it can be more difficult to see a direct return for your money and you may have to look at the wider issues within the business, and take account of general trends over time.
These indicators can include tangible factors such as productivity, profitability, staff absence and staff turnover, but remember, when using these measurements to judge the success of a wellness programme you need to be sure of the statistics before the programme begins and at specific and agreed review points for as long as the initiatives are in place. You also need to be sure that you can extract the relevant information from the right people or departments when you need it, and always be aware of any other variables occurring in the business during the period of assessment.
Other factors that can be assessed to establish the value to the business of specific wellness interventions are results with staff surveys and customer satisfaction surveys. One of our clients did exactly this and discovered improvements in selected customer satisfaction ratings increasing from 8.3 to 9.1 in one area and 8.1 to 8.6 in another during a 12 month period during which staff were given access to one to one wellness coaching.
Less quantifiable returns on your wellness investment include increased staff engagement, culture change and renewed levels of motivation throughout the business and for every company that demands clear figures relating to the ROI for their wellness initiatives, there’s another company for whom the most important return they are looking for is the opportunity for staff to feel as though the business is proactive when it comes to looking after their health, wellness and life balance, and the chance to develop the perception that the business is a great place to work.
To assess the full ROI of your wellness initiatives you need to be clear in advance what you want to achieve with your programme:
- Decide which financials you are able to measure and what would be an acceptable improvement in these figures
- Understand every element – quantitative and qualitative – of what you would like your wellness programme to achieve for you, for your staff and for your business so that you can make informed decisions in the future
- Choose your time frames carefully giving each initiative a chance to prove itself on all levels without running the risk of leaving initiatives in place that haven’t proved their worth to the business as a whole
Looking purely at financials can be limiting and sometimes, even if the financial return on investment of an initiative looks marginal, it’s worth maintaining if it helps foster an environment of positive, motivated, energetic people.
Considering financial returns alongside specific benefits to individuals within your company will ensure that you are able to develop the most effective range of wellness initiatives for the long-term.
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