Not a Member?  Become One Today!

Five Paths for Achieving Wellness Program ROI
 

By Henry Albrecht, Limeade  9/12/2011
 

Real returns on workplace wellness investments have proven difficult to achieve—and even harder to define—than they need to be. There are more exaggerated or downright misleading claims than there are real ones about wellness program return on investment (ROI). Yet all HR has to do is answer a simple question: is it worth the investment? While the simplest questions are often the most contentious, we can scuttle the bogus, anecdotal, feel-good, and “just-a-little-too-theoretical” approaches to answering this question and look at true returns in a rational way. To accomplish this, it’s critical to be strategic about what you want to accomplish, by when and for whom. Companies that take a strategic approach to their wellness investments will reap strategic return on those investments.

The accompanying table outlines five distinct wellness “paths,” including the anticipated time to and magnitude of results to expect, and the primary and secondary beneficiaries. Most importantly, it includes the relative ease of measurement of each approach.  

Path

Comments

Time to Results

Magnitude of Results

Ease of Measurement

1.
“Good driver discounts”
(also known as “bad driver penalties”).

This is cost-shifting at its simplest, fairest and most effective—not from the employer to the employees, but from the engaged to the disengaged. It carries some communications risk but it appeals to a basic sense of human fairness; i.e., “If health benefits are something we all get at this company, let’s reward those who protect our shared financial resources.”

Short

Large

Easy

2.
Replace short-term, high-cost solutions with long-term, low-cost solutions.

Build programs on a modern technology platform that can adapt quickly and grow. This should bring automatic savings by replacing time-eating tasks. Also, social programs can provide peer support at low cost.

Short

Medium

Medium

(Build accountability into vendor contracts.)

3.
Business intelligence: a picture of employee health, well-being and productivity.

Organizations can’t manage what they can’t measure, and a fresh look at data always carries surprises. Knowing where you stand establishes a base line and can help shape 3- and 5-year strategies.

Short

Medium

Easy

(Define and track health improvement goals.)

4.
Behavior change leading to improved job performance, productivity and retention.

Having a broad view of well-being, productivity and health is a better way to get people involved. A high-energy culture drives innovation, competitive advantage and profits. Look broadly at ergonomics, training, wellness, prevention and performance management initiatives. They are related activities with related (and measurable) outcomes.

Medium

Large

Medium-Hard

(Single causality is difficult to identify.)

5.
Behavior change and prevention leading to better health.

The holy grail, and the hardest and longest-term to achieve. This cannot be done without a strategic, social and financial approach. Some employees helped this year may work elsewhere by the time they avoid lung cancer, but they will know you care and will perform better with that knowledge. And you will be enabling the workforce to get healthier in 3-5 years.

Long

Large

Easy

With a path or two—or more—in mind, consider the following recommendations for implementing an ROI-winning wellness program.

Create a long-term strategy. Rank each path according to the goal the organization wants to achieve and place it in sequence. It is not necessary to do all of these at once, but having a master plan is a way to set high expectations for success. Include these paths in three- and five-year planning exercises. Every wellness tactic should serve this long-term strategy. For example, the decision to include spouses in wellness makes sense in almost every case.

Get executive buy-in. Having an executive buy in to the strategy means that later, when HR wants a killer video for the program launch, or an irreverent challenge featuring the CEO, or the program execution hits a snag, the exec will be there for you, committed and with sleeves rolled up.

Check the strategy quarterly. Review accounts with key vendor partners. Stay on course by checking back in on the three- and five-year strategy. Share progress with participants and executive sponsors.

Make sure the goals and programs make sense to employees. Do they match the tone, language and general vibe of the organization? Every time wellness is made more locally—and strategically—relevant, people understand how their participation helps lower the barriers to overall success. Low barriers and high expectations are a great combination.

Get some quick wins. Do anything in the accompanying table with a short “Time to Results” score. The wellness paths connect to and build on each other. A short “Time to Results” activity in the context of a longer term strategy can build a snowball of success.

Henry Albrecht is the CEO of Limeade, an online wellness company focused on building happy, healthy, high-performance workforces.

Related Articles:

Using Behavioral-Based Design to Encourage Healthy Behavior, SHRM Online Benefits Discipline, August 2011

Uncommon Knowledge: Using Health Assessment Data, SHRM Online Benefits Discipline, July 2011

Declining Health of U.S. Workers Is Driving Up Employer Costs, SHRM Online Benefits Discipline, April 2011

Controlling Health Costs: Success Tips Shared, SHRM Online Benefits Discipline, July 2010

Finding Wellness's Return on Investment, HR Magazine, June 2008

The ROI of Wellness Programs: From Perk to Priority Investment, SHRM Online Benefits Discipline, January 2007

Quick Links:

SHRM Online Benefits Discipline

SHRM Online Health Care Reform Resource Page

Sign up for SHRM’s free Compensation & Benefits e-newsletter

Copyright Image Obtain reuse/copying permission