Human Capital & Careers

Throw Away Your ROI Calculator for Wellness Programs

Standard approaches to measuring returns on wellness initiatives are worthless, as the analysis must be customized to a company's particular needs.
Hal RosenbluthJune 6, 2017
Throw Away Your ROI Calculator for Wellness Programs

I have long been skeptical about claims that a high rate of employee engagement in health and well-being programs has a corresponding positive effect on the programs’ return on investment.

Hal Rosenbluth

Hal Rosenbluth

ROI does partly depend on the percentage of a population engaged in these programs, which are designed to improve workers’ health and thereby lower the costs of care. But at what engagement rate does that needle begin to meaningfully move? 10%? 20%? 30%?

Simple programs that don’t change behavior have minimal value, and rewarding employees simply for participating is a waste of money. Measuring engagement as a purely employee-dependent metric is also problematic. Engagement is the result of several factors, including a company’s efforts to communicate the benefits of its program, the rewards offered, and the ease and simplicity of a health risk assessment (even though most employees believe the assessment will not be confidential and could be used against them).

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The steep cost of health care is driving many employers to define health and well-being more broadly, adding programs that focus on things like sleep, gratitude, debt management, and unplugging from technology. The question remains: Are they worth a company’s investment?

A related question: while financial incentives for employee participation in health and well-being programs remain on the rise, do these dollars benefit the company as well as their recipients?

If the intent is to simply pump up participation and so-called engagement in the hope that it lowers costs, it could be a huge waste of money without clearly defined goals and a strategic plan that includes innovation and agility to seize the opportunities of the turbulent health-care climate.

So, can a company realistically measure its return on the investment in its programs? While ROI calculators exist, they’re only as good as one’s understanding of the components of a health and well-being offering, and how the components are utilized and measured. In fact, today’s ROI calculators miss the point completely, as a company’s culture is of paramount importance when it comes to employees’ participation, the desire to modify their behavior, and the resulting effect on productivity, absenteeism, turnover, costs of care, and other crucial corporate variables.

Those in the health and well-being space might consider what I’m about to say almost sacrilegious: The current standardized approaches to measuring engagement rates and ROI are well-meaning but completely unrealistic. To be successful, programs need to do a much deeper dive into a company’s unique needs and the factors that need to be measured.

Where to begin? Surprisingly enough, begin with your employees. A one-size-fits-all program will not only fail to engage them, it also won’t produce any meaningful, lasting behavior change. Instead, allow them to customize the program to suit their needs so that each user can choose the activity, its frequency and duration, and a tracking schedule. This empowers employees as they form a commitment to a health goal and become more active participants in their health.

Next, when it comes to their goals, it’s important not to ask too much. That’s the fastest way to get them to give up. Make sure the goals in your health and well-being program are:

  • Regular, repeatable behaviors that establish ongoing engagement and behavior change.
  • Small and incremental, requiring ongoing minor improvements (rather than one final, daunting result they must work toward).
  • Easy to achieve at first — these early wins foster trust, build confidence, and ensure future participation.

Finally, to avoid the kind of engagement that has no impact on behaviors or costs, what types of goals and programs should be offered?

Here is where I can’t stress enough how necessary it is to customize the offering based on the specific needs of the company’s work force and culture. Take, for instance, a company that has a mostly young and healthy — but very stressed — workforce. A program centered around chronic conditions and weight management would have very little impact in this case. However, one tailored to improving sleep habits, mental well-being, and stress management would do wonders for the productivity, engagement, and overall happiness within this firm.

Here’s another example. Let’s say a company is tasked with covering health care for an aging work force where many employees, health permitting, would like to stay in their top positions for as long as possible before trusting the firm with the next generation. Given their age and heightened health risk, knowing which chronic conditions these senior employees have and might develop can inform a highly personalized program that fosters better disease management and prevention.

For this company, such a program could make a world of difference in costs and employee retention. The point is, you never see these results unless you take a well-researched and customized approach from the beginning.

So, if you’re using a typical ROI calculator for your health and well-being program, throw it out. Seriously. You will never show real ROI or engagement unless you know what you need to be measuring and customize your approach based on what you’re trying to achieve.

Dig deep and find out what your employees’ and corporate needs are — whether it’s better nutrition, sleep and exercise, or access to mental and behavioral health resources — and address the root of the problem. You’ll be surprised what you find out and delighted by how these insights maximize the impact of your corporate wellness program.

Hal Rosenbluth is chairman and CEO of New Ocean Health Solutions and co-author of “The Customer Comes Second: Put Your People First and Watch ’Em Kick Butt.