The benefits of health and wellbeing programs in Australia

July 04, 2018

Health and Wellbeing programs in Australia

The benefits of health and wellbeing programs in Australia can be measured, although there is much debate on the topic, because ROI in wellness is a bear to measure.

Only 28 percent of organizations surveyed by the International Foundation of Employee Benefit Plans (IFEBP) measure the success of their health and wellbeing programs with traditional ROI. What’s more, only six percent of CFOs surveyed by the Integrated Benefits Institute said that their companies assess the ROI of their health benefits in general.

So why is measuring the ROI of wellness so hard? Here are a few reasons:

It’s expensive
Analyzing health risks, insurance claims, biometric values, sick time, productivity and more is a big undertaking - a project most employers can’t handle themselves. They need the help of analytics companies to make sense of the data and to keep employee health data private. And that help comes at a price. Most companies don’t make the extra room in their budget to get the analytics they need.

It’s complicated

Health and wellbeing programs create a wealth of outcomes. Employees benefit from improved health and employers benefit from fewer sick days and better productivity. And these benefits can be measured in a handful of ways. Employers can look at weight loss, reduction of disease risk factors, sick days, completed work, company profits or customer satisfaction.

And even when they do look at all of these factors, they can’t really pinpoint the actual cause of improvements. Health and wellbeing programs in Australia may be correlated with better well-being, productivity and profits - but correlation and causation are different things. An employer can’t say with certainty that the program caused these benefits, any more than they can say “our new CEO caused our turnaround.” Common sense and causal certainty occupy different realms in the business world. Outside factors like inflation, health plan choices, a few high-cost claims, industry demographic shifts, hiring and firing and more can all confound your bean counters.


It’s difficult to measure specific initiatives
Even if employers could say that health and wellbeing programs caused certain benefits, pointing to which initiatives or challenges specifically caused the positive outcomes may be a challenge. Was it the mix of relevant activities or fun team challenges or even the simple tracking of progress that helped improve an employee’s well-being? What was the role of that tear-jerker story of a life saved or the inspirational (or threatening) message from the CEO? What did a wellness vendor do versus the employer? It’s often hard to say for sure which components of a wellbeing program drove improved outcomes.


It’s not always immediate
Some results take longer than others to see. For example, exercising for 20 minutes every day may give employees an immediate bump in energy and productivity. But other benefits, like improving immune systems and decreasing the chances of certain diseases and conditions, could take years to present themselves. If an employee quite smoking, then quits the company, where is the ROI?

So, can ROI be measured?
Even with all these barriers, the ROI of health and wellbeing programs can still be measured - it just takes more than actuarial science and a health-cost-centric worldview. So how do you find the real benefits of your wellness program? Focus on the benefits that impact your most important asset — your people.


Here are few tips to get you started:

Engagement is the secret sauce
Focusing on employee well-being leads to an engaged workforce. In fact, 51 percent of organizations surveyed by IFEBP said their wellness efforts improved employee satisfaction and engagement. In addition, a 2015 survey published by Quantum Workplace and my company, Limeade found that respondents were 38 percent more engaged and 18 percent more likely to go the extra mile when they felt their employers cared about their well-being.

They were also 17 percent less likely to quit that year. Every company I’ve met with would take a 10 percent reduction in unwanted turnover over a 10 percent reduction in health costs any day.

Instead of focusing on the cost of wellness programs and initiatives, look at employee engagement as a measure of ROI. An engaged workforce brings many other compelling outcomes - which link directly to overall business outcomes.

Powered productivity
When employees are engaged, improved productivity naturally follows. And investing in employee well-being amplifies that effect.

Consider that lack of sleep, financial concerns and caregiving all put a dent in productivity, according to a study published by Rand in 2015.

But when employers invest in the well-being of their employees and support healthy lifestyle changes, employees become high performers. In fact, a recent report from Gallup on well-being and engagement found that those who were engaged and reported good well-being were 27 percent more likely to report that their performance at work was excellent. Now we have all the data to see if the CFO agrees.

The bottom line
What happens when employees feel great, feel valued, are engaged and do their best work? The business wins.

A study published in the January issue of the Journal of Occupational and Environmental Medicine tracked the stock performance of 45 publicly-traded companies that earned top scores on employee health and wellbeing scorecards.The study found the high scorers outperformed the 500 largest U.S. companies listed on the S&P 500 index by 235 percent over a six-year period.

This research suggests that investing in and supporting employee health and wellbeing brings substantial benefits to both employers and employees.

Find out more about offering health and wellbeing programs at your workplace across Australia