As an employer, you may have started a wellness program to save on healthcare costs or improve employee health. In a best-case scenario, you may realize that the program adds considerable value beyond its original goals to the organization.
But you may also be looking at your wellness program and wondering if it has been worth the investment. Before ending the program, you will want to consider the total value on investment (VOI), not just the return on investment (ROI).
In the following, we’ll discuss the differences between these two metrics, how to take a big-picture look at the effects of your employee wellness program, and how to make more informed decisions about health and wellness initiatives at your business.
The Differences Between Return on Investment and Value on Investment
Many employers evaluate their wellness program’s effectiveness using financial outcomes like monetized claims savings. This is known as return on investment. But there are other ways to evaluate if your wellness programs are effective. Value on investment is a financial analysis that better reflects the broader financial impact that wellness programs can have on an organization.
For example, a wellness program can result in fewer sick days taken by employees. It can cause people to be happier and more engaged at work — and more productive. Supporting your employees with health and wellness initiatives can also help you attract and retain top talent for your organization, which reduces churn and increases innovation.
If you only calculate and attribute medical cost savings to a wellness program, you’re missing out on the big picture of how physical, mental, and emotional health are intertwined with day-to-day employee performance. And you’re missing out on a growing trend in employment best practices: a recent report from Optum states that 91% of employers offer health and well-being programs for reasons beyond medical cost savings.
How Do You Measure VOI?
VOI measures how a wellness program affects qualitative business attributes such as:
- Morale
- Recruiting
- Retention
- Employee Engagement
- Productivity
- Presenteeism
- Positivity
Some of these measurements require special surveys, and some may not produce a specific dollar value outcome like ROI does. But they do state facts; e.g., the wellness program improved job satisfaction by X amount. The most successful businesses focus on VOI or a balanced combination of ROI and VOI.
There are additional metrics you can use to determine if your wellness initiatives are effective as well. Examples include:
- Percentage who enroll and participate
- Employee and employer satisfaction
- Organization support (the number and quality of programs, policies, and procedures implemented)
Reference
Marlo, K., Serxner, S., Kichlu, R., & Ratelis, E. (2015). Beyond ROI: Building employee health & wellness value of investment[Whitepaper]. Retrieved from https://www.wellsteps.com/images/stories/webinars/other%20webinar%20attachments/2.%20Beyond_ROI.pdf
