Understanding ROI and VOI
With so many companies investing in workplace wellness, it’s surprising that few assess the health needs of their employees before deciding on wellness services. Even more surprising is that only about a third of companies evaluate and measure how their programs impact employee health, wellness, or the organization’s bottom line. While Return-On-Investment (ROI) focuses on the financial returns from wellness programs, Value-On-Investment (VOI) considers broader benefits like improved employee morale, job satisfaction, and productivity. Understanding ROI and VOI is crucial for maximizing the effectiveness and value of your wellness initiatives.
10 Questions to assess how your workplace wellness program stands up:
- Does your organization have an overall health policy stating your intent to protect and promote the health of all employees?
- Does your organization have a strategic plan to developing and sustaining a healthy workplace and is it based on employee needs?
- Have you trained your leaders in healthy workplace principles and strategies?
- Do your leaders demonstrate through their comments and actions, a commitment to the development of a healthy workplace?
- Do you have a formal assessment process to determine employee needs, attitudes and preferences in regard to healthy workplace programs?
- Are the workplace health assessment results analyzed and are goals set out in a Healthy Workplace Plan?
- Do you have methods in place that make it easy for people to provide ongoing input on healthy workplace and organizational issues?
- Do you measure employee satisfaction levels in order to improve the workplace?
- Do you have a dedicated budget and committee to properly implement your Healthy Workplace Plan?
- Do you evaluate the outcomes and impact of your programs and make adjustments as necessary?
Addressing The Reasons For An Employee Wellness Program Through Evaluation:
From the assessment above, measuring and evaluating are important and essential components of a comprehensive workplace wellness plan. Developing a comprehensive employee wellness program that delivers sound and measurable returns is not as difficult as some may think. A productive employee wellness program assesses the health issues (including the direct and indirect costs of these health issues), wants, and needs of your employees and then addresses these issues, wants, and needs in a meaningful and measurable way that the employer can track over time.
If you are looking to manage or reduce health care costs, reduce the number of sick days, or manage/reduce disability claims, then Return-On-Investment (ROI) measurements make sense. However, if you are looking to reduce employee health risks, improve employee job satisfaction, safety, productivity, and morale, or attract and retain talented employees, then you may want to evaluate the Value-On-Investment (VOI).
ROI vs. VOI: Understanding the Differences
ROI focuses on tangible financial returns from wellness programs, such as decreased healthcare costs and reduced absenteeism. VOI, on the other hand, encompasses a broader range of benefits that might not be directly tied to financial metrics but significantly impact the organization. These include improved employee morale, enhanced job satisfaction, better recruitment and retention, and higher productivity levels.
The Broader Impact of VOI
Studies show that many large employers with an effective corporate wellness program may have started a wellness program because they wanted to save healthcare cost dollars or improve employee health, but as the program went on, they realized that their workplace wellness program added considerable value to the organization and ROI was not as important. Workplace wellness can have a significant return on investment. However, if you only look at reducing healthcare costs, you may miss an even more significant value from your programs. The biggest impact may be on productivity, presenteeism, turnover, and recruitment. When employees are healthy and working in a healthy environment, they are engaged, creative, and productive. They tell others, who will be attracted to your company. In an aim to be an employer of choice, isn’t this what you want?
Participation is the key to effectiveness.
Simply offering a wellness program, no matter how well-intentioned, provides no guarantee of improving employees’ well-being or having any value or return on investment. Workers must be aware the program exists and be persuaded to use it. Engaging company managers is key. They are uniquely positioned to ensure that each of their employees knows about the company’s wellness program, to encourage team members to take part, and to create accountability for results.
Research by Gallup found that managers account for at least 70% of team variation in employee engagement. Managers that engaged their workers were 28% more likely to participate in a wellness program offered by their company than were average employees. But before managers can talk to employees one-on-one about their well-being, they must first build trusting relationships with their direct reports so team members feel comfortable discussing sensitive topics and setting health-related goals with them.
Wellness is a commitment. It is a commitment by the individual, their manager and by the company.
Wellness requires a commitment from individuals, managers, and the company as a whole. Studies show that employers are often divided on whether the primary goal of workplace wellness programs is to save costs or enhance productivity, with 40% focusing on cost savings (ROI) and 38% on improving productivity and overall employee well-being (VOI).
Determining whether your focus is on ROI or VOI is crucial. Measuring these outcomes begins with benchmarking to establish a starting point and track progress. This clarity helps tailor your wellness strategies to meet specific organizational goals.
Workplace wellness is a long-term investment that can take years to fully realize, but it is ultimately a win-win for both employees and employers. A healthy workplace fosters engagement, productivity, and overall satisfaction, making the investment well worth it.
Questions How do you feel about ROI and VOI?
Which is important to your decision makers and your stakeholders?
Are you measuring VOI?
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Contact Beverly about hosting a mental health workshop for your teams on how to set up your workplace wellness programs and provide mental health training to your leaders and teams. Discover tips to deal with build engagement and encourage positive well-being!
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If you have some strategies to share – comment on this posting!
Additional Reading:
Building A Well Workplace – Four Reasons Why Health Promotion Makes Good Business Sense
Corporate Wellness Programs – A Business Case
Workplace Wellness: Critical Questions In Putting Wellness Programs Together
Workplace Wellness: Measuring Wellness Outcomes
Workplace Wellness: 5 Reasons Why Excellent Programs Fail
Workplace Wellness: Moving From Health Promotion To A Healthy Organization
Boosting Your Wellness Programs To The Next Level