ROI – Driven Wellness Designs

Companies implement wellness programs as a cost-saving tactic so it only makes sense to design yours to deliver a solid return on investment (ROI). Data-driven results give senior management the bottom-line evidence they need to continually invest in workplace wellness programs. Start by designing your wellness program with clear expectations for measurable outcomes. Include input from all program stakeholders as you consider:

  • What are the measurable benefits we need our workplace wellness program to provide to our employees and the organization?
  • To what extent will all participants benefit from the program? • How can we tell whether a program has more impact on direct benefits or indirect benefits?
  • Do the program components have the ability to impact productivity measures such as absenteeism, presenteeism, on-the-job injury, and short-term disability?
  • What types of programs are most cost-effective in a company with a demographic profile similar to our workforce?
  • How long does it take for a program to break even? Before you can determine success, know ALL components that contribute to a wellness program’s ROI.

So how do you determine ROI? Two of the most common economic-based evaluations are cost-effectiveness analysis (CEA) and cost-benefit analysis (CBA). The two work in conjunction to determine program effectiveness and the true ROI.

Cost effectiveness analysis

Cost-effectiveness analysis (CEA) is a form of economic analysis that compares the relative costs and outcomes (effects) of two or more courses of action. Cost-effectiveness analysis is distinct from cost-benefit analysis, because it does not consider money as a part of the equation. Instead, CEA reviews evidence-based results (i.e., lower numbers of premature births, lower number of smokers, etc.) stemming from the wellness program’s initiatives. In some cases, CEA measures the monetary investment of wellness programs and is a separate exercise from a complete analysis for ROI.

Cost benefit analysis

Cost Benefit Analysis (CBA) is another form of economic analysis that expresses benefits and benefit costs in monetary terms. CBA is distinct from CEA’s because it only considers monetary values rather than wellness activities that produce positive health outcomes. For example, CVA looks at lower premature births as a cost rather than prevalence factor, lower number of smokers not as relevant as the reduction of lung cancer claims, etc.

The bottom line

It is possible to get a positive return on investment from your wellness program. What that ROI is depends on the results that are most important for your company. Crafting a program that fits your culture, employee health and cost goals is the key. Many organizations rely on the expertise of a benefits consultant to identify goals and then design a wellness program that will meet them.