Here’s how to get the best ROI on a wellness program
How many hours do your employees work per year? According to the International Labour Organization, Americans work nearly 500 more hours per year than French workers and 260 more hours per year than British workers. Continue reading to learn how employers can get the best ROI on a wellness program.
U.S. employees are working harder than ever and need more support from their employers as a result.
In fact, according to the International Labour Organization, Americans work 137 more hours per year than Japanese workers, 260 more hours per year than British workers, and nearly 500 more hours per year than French workers.
With that growing burden — along with more individuals of all ages recognizing how important their health is — comes an increased need for companies to invest in well-designed health and wellness programs. Rolling out these programs can lead to better employee morale and engagement, a healthier and more inclusive culture and fewer absences due to illness, according to research — all of which are especially important in today’s fast-paced work atmosphere.
In addition, the rise of social media means that businesses are being held accountable by their employees in a way that was not the case for previous generations. According to the British Standards Institution, employees trusting their employers’ commitments is now an increased focus. Health and well-being are becoming a significant part of that workforce trust agenda.
With these points in mind, it’s important to recognize that your organization needs to make and keep commitments to investing in and executing successful health and wellness programs for your workforce. These programs must keep trust momentum going to ensure healthier and happier workers, and it is proven that happier and healthier workers are more productive. This can lead to overall company success.
For example, a recent employee wellness study from the U.S. Chamber of Commerce showed that effective wellness programs have good return on investment of $1.50 to $3.00 per wellness dollar spent over a two to nine year timeframe. Another study from the Australian-based Black Dog Institute concluded that thriving and healthy workforces typically perform more than two times above average, compared with organizations that do not invest at all in their employees’ health and well-being.
BSI recommends a three-pronged approach for successfully investing in your employees’ health and wellness. First, it’s important to define your health and well-being initiative and what it means for your company. While there are many definitions, BSI recommends considering one that recognizes the need to manage workplace occupational health and safety, in addition to the promotion and support of managing healthy behavior, such as stress management, work-life balance and an ever-changing work environment.
Next, employers should define what their health and wellness program for workers should include. In particular, BSI suggests a good model to follow: the U.S. federal government’s recommended approach for workplace health and well-being programs. Created by the Center for Disease Control’s National Institute for Occupational Safety and Health, the program is called Total Worker Health.
TWH is a holistic approach to occupational health and safety and worker well-being. It recognizes that work has an important function in the social determinants for health and is defined as “policies, programs, and practices that integrate protection from work-related safety and health hazards with promotion of injury and illness prevention efforts to advance worker well-being.”
However, this program also goes much further than other wellness programs and reflects the nature and challenges of the changing workplace, from new forms of employment to new technologies. It also reflects that non-work-related illness and stress can be adversely impacted by work, can have health and safety implications within the workplace, and the way an organization manages absence and rehabilitation policies can have hugely positive or negative impacts on the individual and the business.
Once you know what health and well-being means to your business and what kind of program your organization wants to execute, it’s time to move forward. For step three, BSI recommends companies review and implement ISO 45001, the new global management system standard on occupational health and safety. This standard has physical, mental and cognitive well-being and health at its core, while continuing to drive high safety standards for companies.
ISO 45001 also recognizes that the most successful and productive organizations take a holistic approach and therefore, good occupational health and safety management can be integrated with employee well-being initiatives. Related to this, holistic employee wellness programs can be used as a recruitment tool. Evidence from WhenIWork.com suggests that employees want their employers to take an active role in their health, so if you can show potential employees that you are invested in their well-being, you will gain an advantage over companies offering only bare-bones benefits.
As a global standard, ISO 45001 also enables a consistent worldwide approach. With its focus on culture and employee participation, it also provides businesses a best practice model for developing an effective health and well-being program. And employee participation will happen. For example, experts from the Johns Hopkins Bloomberg School of Public Health recently analyzed surveys to determine the overall perceptions of wellness programs from employee and employer perspectives. Its data analysis revealed that nearly 60% of employees think employers should attempt to improve the health of their workers.
Overall, seeking accredited certification of the standard not only builds trust within the organization, but also provides external assurance to customers, shareholders and the wider community. Investing in employee health and wellness programs increases healthy behavior and curbs the risk of lifestyle-related disease, leading to happier workers, more productivity and overall company success.
SOURCE: Field, K. (4 June 2019) "Here’s how to get the best ROI on a wellness program: (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/how-to-get-the-best-roi-for-your-wellness-program
Employers Save Big on Wellness Programs
Source: benefitspro.com
Employers betting on wellness programs seem to be making the right call. They’re seeing $1 to $3 decreases in their overall health care costs for every dollar spent, finds a report from the International Foundation of Employee Benefit Plans.
“Without question, employers are beginning to understand the direct connection that wellness initiatives can have on both employee health and health care plan cost savings,” says Michael Wilson, Foundation CEO. “While the primary goal is reducing health costs, we’re also seeing other advantages from wellness initiatives, such as higher employee morale, increased productivity and reduced disability.”
The report also finds that wellness program incentives—such as insurance premium reductions and communications tools like web links and social networks—are used more by organizations that are achieving positive returns on their wellness investment.
Still, only 19 percent of organizations are measuring return on ROI on wellness programs, Wilson says.
IFEBP divided the respondents of the survey into two groups, the ROI group and the non-ROI group based on whether they measured and achieved positive returns.
Insurance premium reductions for participation in wellness programs accounted for the biggest difference between the two groups, with 49 percent of the ROI group providing this incentive as opposed to just 29 percent of the non-ROI group.
Other popular incentives included gift cards and non-cash incentives/prizes/raffles. Those in the ROI group were also more likely than their counterparts to attach incentives to specific types of initiatives such as health screenings (65 percent to 43 percent), health risk assessments (74 percent to 51 percent) and health care coaches/advocates (43 percent to 22 percent).
Participation among members of organizations in the ROI group increased dramatically when incentives are tied to health screenings and health risk assessments, the report shows.
Communication was another factor in achieving positive ROI. And, most organizations (74 percent) experiencing ROI are more likely to have a broader value-based health care strategy that offers initiatives such as health screenings, stress management programs, health risk assessments, and fitness and nutrition programs compared to just 45 percent of the non-ROI group.
“Determining ROI can be of great benefit for employers—leading to increased buy-in from organizational leaders and workers,” says Julie Stich, IFEBP’s director of research.
But she says it’s still not an easy process, as ROI can be “difficult to measure since health improvement may be influenced by a combination of factors and because it can take anywhere from three to five years to see cost-saving results.”
Roughly 650 people from the United States and Canada were surveyed in February.
Employers Lack Social Technology Education
By Amanda McGrory
Source: Benefits Pro
Although 80 percent of employers report using social technologies, 49 percent of employers say they are not taking advantage of the full potential, and only 12 percent of employer say they have improved their daily activities, according to a recent survey by Teradata, an analytic data solutions company, and Mzinga, a provider of social intelligence solutions, along with the Center for Complexity in Business at the University of Maryland.
Social technologies are used for marketing, employee collaboration, customer service, and support and sales, and the survey finds that the top areas that affect trust and influence are customer experience, service or support; marketing or brand experience; employee collaboration and knowledge sharing; and sales.
Another 75 percent of respondents fail to measure the return on investment regarding their social technologies. Instead, most do this on a case-by-case basis. Among those not measuring ROI, 31 percent are unsure whether their vendors provide analytics, 14 percent have vendors that do not provide analytics, and 44 percent do not work with vendors for analytics.
“The survey results indicate that a wide variety of industries are interested in analytics and the power that analytics can provide them in making business decisions,” says William Rand, assistant professor and director at the Center for Complexity in Business. “However, there seems to be a lack of knowledge of how to best implement analytics and a lack of consistent support for analytics across different platforms. This indicates a strong market need for education and consistent implementation of world-class analytic systems.”
In fact, some respondents report being unaware as to what information analytics can provide, and many say they have been influential since their companies have implemented social technologies but do not know how to successfully measure their use or believe the analytics were too difficult to process.
IS IT WORKING?
Having trouble figuring the return on investment (ROI) from your wellness program? A report by HRmorning suggests examining these five factors:
- Sick days
- Stress
- Presenteeism
- Health care utilization
- Employee satisfaction
A solid program will decrease the first four of the above items and bump up the last, the report noted. The report noted that a $3 to $4 return for every $1 spent on wellness is a common benchmark for wellness ROI.
Employers fail at measuring wellness program ROI
BY AMANDA MCGRORY
As health care costs continue to rise, employers are on the lookout for ways to reduce spending, and wellness programs are becoming an increasingly popular solution. While research has shown that wellness programs can reduce costs, many employers are failing to measure their return on investment to get an accurate picture of how these programs impact the bottom line, says LuAnn Heinen, vice president at the National Business Group on Health, a nonprofit dedicated to representing large employers’ perspectives on national health policy issues in Washington, D.C.
“It’s important for everyone to look at what they’re spending on wellness per employee and look at that as a percentage of what they’re spending on health care,” Heinen says. “Most employers keep their wellness program investments small – only 2 percent of less of claim costs. There’s a body of evidence in different employer settings and over a number of years that suggests there is a return on investment of $2-3 per every dollar invested. When looking at these figures, a lot of companies might find that they’re underinvesting in wellness and prevention.”
Despite the importance of measuring ROI on wellness programs, it can be a struggle for employers because of the various components, Heinen says. Employees are coming and going, coverage policies could change, new insurance carriers take over – there are so many revolving factors in an employer’s reality that getting a real read of wellness programs can be difficult.
“We have a messy real world,” Heinen says. “The bottom line is you can try to collect and study a lot of data to determine the return on investment, but for all kinds of reasons out of your control, you don’t end up with valid information.”
Although measuring ROI is challenging, that’s not a reason for employers to give up, Heinen says. Instead, Heinen recommends that an employer divides its employee population into two groups: participants and nonparticipants. Between those two groups, an employer can look at the difference in claims over time. However, there are some problems with that approach.
“It’s easier to participate in wellness if you’re healthy, so maybe that person would have cost less anyway,” Heinen says. “Just because you participated in wellness doesn’t mean it was because of the wellness program that those people cost less, but at least you know there’s an association between people in the wellness program who tend to be lower cost, and it can give you that confidence that the more people participating in wellness, the better for your trend.”
An employer can also measure ROI by matching a participating employee to a nonparticipating employee who both represent similar demographics, Heinen says. For instance, an employer can take a nonsmoking 35-year-old woman following the wellness program and compare her claims to another nonsmoking 35-year-old woman who is not participating. These similar demographics do a better job of painting the true claims picture.
“It wouldn’t be a good comparison if all the employees participating were 25 and all the employees not participating were 45,” Heinen says “You want to match based on key demographics that drive costs and then you have a better chance of seeing the differences in the cost profiles is the wellness program and not their age or their smoking status or something else.”
Employers should keep in mind that calculating the success or failures of a wellness program takes time, Heinen adds. Considering the revolving workplace and the time and effort it takes for implementation, employers should give their wellness programs two to three years before they relying on the data.
“It takes a while to get enough people to participate, and then it also takes time to get information on their experiences and make changes,” Heinen says. “You really need at least two years.”
3 simple programs to incorporate wellness into the workplace
The biggest challenge facing HR professionals looking to devote resources to wellness initiatives in their organizations is responding to the question, “What’s the ROI?” It seems intuitive that if you create a healthier workforce, your cost for health insurance should go down. But intuition only goes so far these days when it comes to expending corporate resources, and quantifying ROI continues to be a somewhat elusive target.
Sure, there is lots of evidence to support the notion that health management programs do pay off. Mercer's National Survey of Employer-Sponsored Health Plans has found that employers that demonstrated a greater commitment to wellness and health management experienced annual cost increases that were two percentage points lower, on average, than those of other employers. But, as compelling as that data is, it still doesn’t constitute scientific proof.
A recent study published in the American Journal of Health Promotion did provide some hard data on the ROI of a “comprehensive” health and productivity management program. Start-up costs led to negative ROI for the first year, but strong ROI in years two and three produced a combined 2.45:1 ROI for all three program years of the study.
The study represented the results of over 20,000 program participants each year and identified the following components for what researchers considered a “comprehensive” program: comprehensive program design, management support, integrated incentives, comprehensive communications, dedicated onsite staff, multiple program modalities, health awareness programs, biometric health screenings and vendor integration.
Whew!
Clearly, the study benefitted from the law of large numbers. When you have 20,000 participants, virtually any health management program you install is going to benefit somebody. But not every company has that luxury. Also, not every company will have the resources to incorporate every single aspect of a comprehensive program as outlined above.
Does that mean you shouldn’t even start down that road? No, absolutely not. Wellness and health management programs can be scaled to fit the needs of companies of almost any size, as long as you have the data to help identify what the needs are. But even without a lot of data or a lot of money to spend, a walking program, a healthy eating campaign or a “know your numbers” program will not only heighten awareness of health issues, it will send employees a message that their employer’s concern for them extends beyond what’s included in their job description. A healthier, more engaged workforce should be a more productive workforce, and everyone benefits from that.
Many clients may think that all this wellness stuff is a bunch of “hooey”; but with health costs continuing to escalate faster than wages, and employees’ increasing difficulty to afford cost shifts, savvy advisers will be prepared to discuss the many advantages of a well-designed health management program.
By George Lane