When proposing a wellness program in a company, the request inevitably comes down to one question: What is this going to add to the bottom line? Return on investment is the very basis of commerce. Anything you spend money on needs to (ideally) contribute to an increase in profit.
Measuring the ROI of wellness is tricky. In 2010 Harvard University meta-analysis research into suggested an “ROI of $3.27 for every dollar invested in wellness programs, with $2.37 related to a decrease in absence alone.” This information was drawn from 32 peer-reviewed studies conducted at the time. Harvard University concluded that “employer-based wellness initiatives may not only improve health, but may also result in substantial savings over even shortrun horizons.”
Since wellness initiatives tend to focus on changes in lifestyle, the tracking of their ultimate financial benefit is challenged with a tremendous number of variables.
For instance, a smoking cessation program can take weeks, months, even years, depending on the individual. People with fitness goals will have to deal with progress plateaus. Plans addressing financial stress can be interrupted by major family events.
Personal wellbeing is always subject to setbacks and achievements influenced by uncontrolled events, so time frames related to the impact of wellness programs can range from immediate to indefinite.
Wellness greatly affected absence rates
Sun Life Financial, along with the Ivey Business School at Western University, conducted a two-year Canadian Wellness Return on Investment Study to measure the ROI of wellness programs. They found the relatively short time frame of the study was not significant enough to provide an accurate overall ROI calculation. The benefits of wellness are measured (and can increase) over many years, affecting numerous business areas in tangible and intangible ways. “What the study did reveal, however, was the significant and measurable value that wellness programs provide…” Sun Life-Ivey stated in their summary, referring specifically to absence rates, physical activity and a correlation between awareness and behaviours.
Absence rates decreased by 4% in the study’s program group versus an increase in absence of up to 23% in the control groups. The Conference Board of Canada estimated that absenteeism costs businesses over $16 billion per year, so a 4% reduction could see a savings of $640 million to businesses – a significant benefit.
Physical activity in the study’s program group rose more than 25% versus just over 3% for control groups. Physical activity is directly linked to improved physical and mental health.
A correlation between awareness and behaviours was identified. This was one of the more surprising observations in the study. People who had lower awareness of the risk factors associated with cardiovascular disease reported fewer optimal health behaviours.
Individuals who didn’t know at least one of their risk factors were significantly:
-less likely to report achieving recommended levels of weekly physical activity;
-less likely to report consuming at least three servings of fruits and vegetables per day;
-more likely to report consuming fast food meals at least once a week.
The Sun Life-Ivey study also revealed factors that make conducting useful wellness program research challenging, such as the cost of doing so over a long enough period to see the long term results, generating a large enough sample size, and controlling the many variables that can affect health data.
Wellness ROI is also difficult to quantify because of its compounding effects. A person who quits smoking not only will likely use fewer sick days, but they will use less health care benefits, which may lead to a reduction in insurance premiums. Their improved health might encourage them to try new activities that further improve their wellbeing. Their improved wellbeing might increase their productivity and generate more revenues. Their success might then influence others to try to stop smoking, compounding the effect even further.
Perhaps the clearest value of the wellness program was the general impact on the participants. “74% of program participants reported positive lifestyle effects as a result of the program. 92% wanted their organizations to implement more wellness programs.”
