Employees are the most valuable asset of any business. They help produce important
business outcomes, but they also cost money in terms of benefits. While deploying wellness
strategies might sound like a simple solution for your company, you may not be convinced that
it's really worth the investment.
At WellSteps, we've created a series of research-based ROI calculators to help you estimate
the effect of well-designed wellness programs on health care costs, absenteeism,
and presenteeism. Each of the three ROI calculators will examine a different employee
expense and will help you determine whether investing in wellness strategies makes sense
for your company. A well-designed wellness program is one that changes the health behaviors
of employees, spouses, and dependents, thus lowering health risks, reducing chronic disease,
and helping worksites create a culture of health. The design of the WellSteps wellness solution
was based on this body of evidence.
In order to use any of the ROI calculators,
you need just three pieces of information:
- Your company's total health care costs over the past 12 months
- The total number of benefited employees
- The average percent change in health care costs each year for the past 5 years
In cases where you do not have 5 years of data, consider using the national average which has already been
entered for you. It will also be helpful, but not necessary, if you know the percentage of your employee population
who are smokers, obese, and have at least one chronic disease risk.
Once you have entered this information, several projections will be produced. First, you will
see the "Cost of Doing Nothing." In other words, if you continue doing business as usual without implementing
a well-designed wellness program, what will your employee-related expenses look like in the next few
years? Remember that these calculators only look at changes in health care costs, absenteeism, and presenteeism.
The "Cost of Doing Nothing" projections do not include any estimates of worker's compensation, disability,
EAP, or other common employee-related expenses.
Second, the ROI calculator projects an estimate of how much you would save if you decreased the percentage of employees
who are either smokers or obese.
Third, the ROI calculator projects what savings would experience if you implemented a wellness program that helped create
a worksite culture of health. A well-designed program includes: a personal health assessment, useful wellness campaigns and
activities, strong leadership support, smart incentives, and meaningful changes in worksite policies and environments. Engaged
participants adopt and maintain healthy behaviors, lower their health risks, have fewer chronic diseases and increase productivity.
We know that not all companies are created equal, but we designed our ROI calculator to consider these unique differentiators.
It is important to remember that although the calculators are based on the best published research and are as accurate as possible,
they are only capable of producing estimates.
To determine the ROI of wellness programs, we completed an exhaustive search for and systematically reviewed,
reputable, published studies dealing with the economic returns of wellness programs. We incorporated those
studies that provided the financial metrics necessary to be included in our prediction model and that met
research quality standards. These references were updated at the end of 2018, but no additional studies were
published in 2017 or 2018. The studies are listed here.1-38
To project the cost savings of reducing cigarette smoking or obesity, we assumed, unless you knew these figures,
that the rates of smoking and obesity in your company were roughly the same as the national averages (20% and 33%,
respectively). National data also suggest that approximately 60% of employees have at least one risk factor.
For the Presenteeism Calculator, we made several science-based assumptions. First, research indicates that the
value of lost productivity is about 3 times greater than health care costs. 39-43
Thus, we conservatively projected the cost of lost health-related productivity to be 2 times health care costs.
Second, based on the American Productivity Audit, we estimated that 71% of these costs were associated with
reduced performance at work. 44 Third, we used two national datasets
to estimate the impact of reduced smoking 45 and obesity 46
on presenteeism costs. Because there is limited literature on the impact of wellness programs on presenteeism, we
based our projections on the impact of wellness programs on risk reduction 47-48,
the documented presenteeism associated cost differences between high and low risk employees, 49-50
and salary and benefit data from the U.S. Department of Labor.