Corporate wellbeing programs deliver a ROI and why you need one.

Dr Graeme Wright and Claire Halliday

The State of the Workplace

Work is making people sick. The health, wellbeing and performance challenges faced by employees today are profound and overwhelming. Data shows employees are currently in poor shape and cost companies a great deal to run.

• In Australia – 27% are obese, 14% report high anxiety, 25% have high blood pressure, 31% are high risk of cardiovascular disease and 35% have a waist girth in the high-risk category.
• In USA – 28% are obese, 11% are depressed and 60% are dissatisfied at work.

If these current trends are to be altered and alleviate the impact on long-term business success, the world at work must change. Introducing a health and wellbeing program to combat these trends is one option. However, the viability of such a program relies on the program offering a return on investment (ROI), as well as achieving an increase in health, wellbeing and performance metrics.

What is on offer to employees in Australia today is struggling to keep pace with workplace health, wellbeing, performance and mental health management demands. Risk reduction models and emphasis on broader meaningful data, however, is helping to make the workforce healthier, as well as perform better.

Historically, programs have been linked to health assessments, biomedical indices and screenings, but for today’s complex workforce, ROI drivers need to adopt a broader, more applicable base. As the health management industry matures so too must the consideration of ROI criteria to include employee engagement and development, loyalty, productivity and performance, risk mitigation and corporate responsibility.

#1 – Employee Engagement

Employee Engagement helps to evaluate employee stress and satisfaction. According to a Gallup Poll (USA), 53% of employees are not engaged at work, while 13% are actively disengaged. The challenge for companies is how to break the disengagement cycle.

If the workplace is not viewed as supportive, possess helpful hierarchy, cater for employees’ needs and have the business displaying a sense of purpose or focus – then both employees and business suffer.

Research from Groov (formerly Mentemia) shows that one in three workers (33%) in New Zealand and Australia consider quitting their job weekly, while 36% consider quitting most days. In addition, one in five workers (20%) don’t feel their employer supports their wellbeing and only 6% feel they are supported at work.

Evidence suggests implementing a health and wellbeing program helps to engage employees with up to 65% of any workforce voluntarily enrolling in a corporate wellbeing program. Employee engagement must be a component when calculating ROI.

57% of employees are inspired by a company culture that offers a health and wellbeing program.

On the other hand, where there is no corporate wellbeing program in place there is only 15% of employees self-motivated to implement changes. Australian data with a health and wellbeing program in place report –

• 64% of employees are inspired to improve health habits
• 65% feel better within themselves
• 99% of employees would recommend the program to their colleague
• 98% of employees overly support the company having a program in place

#2 – Risk Mitigation

‘What gets measured… gets improved.’

Mitigating any risk in the workplace has traditionally and quite rightfully, been driven by safety and prevention of injuries and accidents. A core metric in the health and safety world is total reportable frequency rate (TRIFR). The work Optimum has completed with a large national mining services company has helped to reduce their TRIFR rate from 12.8 to 2.8, demonstrating a direct benefit of having an integrated health and wellbeing program in the organisation and how it impacts a known metric in the industry.

Head Health has a profound impact on the workforce as does Heart Health.

Stanford University report that work is the biggest stressor in the USA. 60% of employees report that they have a poor work/life balance. Data from the UK indicates 50% of workdays lost are related to stress, anxiety and depression. This equates to 26.8 million lost workdays.

In Australia, mental health matters represent 8% of serious workers compensation claims. Compounding this even further, PwC estimate absenteeism associated with mental health conditions costs Australian business $4.7 billion per year.

Optimum’s health and wellbeing program reported a 14% reduction in stress levels across the workforce over two years. 2 lives were saved from suicide and a growing percentage of the workforce moved into the low-risk zone for depression, anxiety and stress.

In addition to Head Health benefits, implementing a health and wellbeing program can greatly reduce the risk of cardiovascular disease across the workforce, the primary killer of Australians. Heart Health data indicates a 36% increase in those moving to the low-risk category for cardiovascular disease, further enhancing the program’s ROI.

Sleep quality and quantity impacts workplace safety.

Mitigating human risks like sleep quality and quantity, impacts individuals and ultimately the business. The most recent Australian data suggests of the 194 fatalities at work, 41% were a result of vehicle collision. It does not take much to conclude that lack of good quality sleep and driving while sleep deprived would have played a role in these tragedies.

Traditionally, sleep (quality or quantity) has not been included in ROI calculations. Improving all aspects of sleep mitigates risks, accidents and poor performance, presenting a substantial saving to the organisation. The ROI bonus of better sleep is individuals perform at a higher and more competent level, resulting in increased productivity.

#3 – Productivity & Performance

Company leaders look to indicators as to how their business is performing. One clear indicator is the measure associated with employee satisfaction. Research indicates that the more satisfied, productive, profitable employee – the better. Employee performance can also be used as a predictor for next year’s profitability and customer satisfaction level.

The leader who implements a well-structured corporate wellbeing program is driving change for their organisation, not just raising awareness of health risks. This means moving beyond the traditional indicators to ways that are meaningful in terms of people and profit. The better integrated the health and wellbeing program to existing programs – the better the outcomes. The impact for example on Occupational Health and Safety and ergonomic programs and policies sees a reduction in injury rate and a better retention rate of staff.

When it comes to measuring productivity and performance outcomes in relation to corporate wellbeing programs, true ROI considerations must include other ‘costs’ and how they impact employees’ performance:

The cost of doing nothing

• USA – $576 billion. $227 billion linked to absenteeism and presenteeism. $117 billion linked to disabilities and leave.
• Australia – $61.8 billion linked to work related injuries and illness. $28 billion for physical injuries with each case costing $75K. And $33.5 billion for nonphysical injuries with each event costing $216K.

Lower employee engagement

• With no inspiration at work only 44% of employees are engaged in their jobs.
• Where there is an engaging health and wellbeing program in place, 80% of employees are engaged in their jobs and satisfied with work and their colleagues.

Attracting and retaining staff

• There is an ever-increasing competitive labour market.
• Rising levels of job stress and burnout mean employees are looking for balance in their life, wellbeing and work.
• Employees are now seeking employers who offer these employee benefits, and more.
• In the WA labour market, recruitment and retention is becoming more expensive. What was once considered “an optional benefit” – such as corporate wellbeing programs, will no longer be the case as businesses strive to present an attractive offer to potential employees.

Attrition is expensive

• Staff costs can be around $100k per year, plus about $1200 per year spent on employee training.
• It will cost any employer up to a multiple of twice the current employee’s salary to replace like for like.

Employer of choice

• Data suggests that “belonging” rates highest on the Act Belong Commit (ABC) mental health profile. Three years of COVID-19 related challenges see people wanting to belong. They want to be part of a workplace who cares, values employees and there is an environment where they can be themselves.
• Having a corporate wellbeing program in place elevates the company to being an employer of choice. This adds value to the company and what can be offered to employees.
• 64% of employees will stay for at least 5 years if satisfied with their company’s wellbeing program.
• Promoting health and wellbeing in the workplace – means the company is 2.5X more likely to be viewed as a top performing organisation.

#4 – Corporate Social Responsibility

In Western Australia, decision makers now have an increased responsibility to ensure workers’ health and safety under recent changes to the WA Work Health & Safety Act, released late March 2022. Anyone who engages a WA worker, now has a duty to protect their health and safety, including psychological wellbeing.

Aligning a health and wellbeing program with other performance related programs within an organisation helps to ensure compliance by business leaders to meet the social obligation and responsibility now expected of them.

#5 – Employee Development & Training

The investment in training and development that a company makes shows employees they are valued and creates a supportive workplace, therefore enhancing the employee’s overall performance and that of the business. Integrated programs such as executive/leadership coaching, peer support programs, psychological and professional development are viewed as additional company benefits, boosting staff morale, productivity and efficiency.

A Gallup Poll (USA) states that companies that engage in employee development reported a sales increase and profit doubling compared with those who did not offer any employee development. Ensuring such opportunities are made available to all employees through an integrated health and wellbeing program, further enhances the ROI of introducing a corporate wellbeing program.

The Final Word

Among those employees who have access to a corporate wellbeing program, 60% say they are inspired by their company culture to make healthy choices (USA). Australian data indicates that 57% of employees are inspired to make healthy choices.

Using a broader based approach to ROI drivers – savings identified as a result of a health and wellbeing program within Australia were up to $54.70 per employee per month. This saving occurred due to reduced non-scheduled days off and regular personal and online contact via a tailored education program over two years. The ROI in the USA is between $2-$47 per employee per month. This was assessed within a small band of assessment points.

In the USA (companies with 400 employees) find for every $1 invested in health and wellbeing, there is $2 returned to the employer. Germany finds for every $1 invested there is a $2.20 return. Both these calculations were linked to one metric – Ergonomics at work.

The risk reduction model for ROI emphasises the relationship between the benefits obtained to money expenditure. It is expressed as a multiple. In the UK this multiple is 2.6, while in the USA it is 1.6-2.9.  In Australia, data indicates this can be as high a 4.0 – and that was using just one metric.

Increasing the number of elements in the calculations of ROI can only enhance the return and make it more compelling to include a health and wellbeing program as an essential element in the workplace.

It’s important to consider that one size does not fill all in corporate health and wellbeing. Depending on the industry, workforce size, geographic location and workplace demographics, leaders should build their program and accompanying metrics around relevant and sustainable health, wellbeing and performance profiles that will deliver the greatest ROI.

Optimum Health and Management Services can work with you and your business to quickly identify what is best fit for your organisation. Find out more at www.optimumhms.com.au or contact +61 08 9321 9677.