It can be hard to determine value and return on investment (ROI) on wellness programs. This can sometimes lead corporations to think that they’re too expensive or don’t deliver positive ROI. However, they do more than just spruce up a benefits package. Having a wellness program shows your employees that you care, which can actually save your company a lot of money in recruitment and retention.


Wellness Programs Improve Employee Engagement

Employee engagement is the key to receiving the best performance from your staff and it turns out wellness programs are a great way to boost it. In a 2015 survey conducted by Quantum Workplace, employees stated when their employers offered a wellness program, they were 38% more engaged and 18% more likely to make an extra effort at work. They were also 17% less likely to quit. 51% of of organizations surveyed by the International Foundation of Employee Benefit Plans (IFEBP) said that wellness programs has led to an increase in employee satisfaction. Furthermore, in a 2015 report from Gallup, more engaged employees were 27% more likely to have an ‘excellent’ performance rating by their companies. Also, a 2012 study found that wellness programs reduced sick leave by 25%.

The Cost of Disengagement

The costs of turnover and disengaged employees is high, but just how high? The Center for American Progress estimates that cost of replacing an employee that has a midrange salary, (making in between 30k and 50k) is 20%. That means replacing someone who makes 50,000 a year will cost your company just over $10k. According to the Society for Human Resource Management, the costs are even higher, costing corporations between 6 months to 9 months of the yearly salary of the employee needing to be replaced.

Unscheduled absences due to poor health can cost the company $2,650 a year for salaried employees. While this number seems pretty high, ‘preseentism’ can cost companies more. This is when disengaged employees show up to work to receive a paycheck, but don’t do much. According to the World Health Organization, disengaged employees claimed that they were unproductive for 57.5 days out of the year. WHO predicts that ‘preseentism’ costs companies ten times more than absences.

A Quick Summary

Let’s say that we just invest 0.5% of an employees average salary into a corporate wellness program. That’s just $250 dollars if your employees average $50,000 per year. Using the statistcs that we mentioned, that $250 will:

  • Increase retention rates by 10%
  • Increase engagement by 38%
  • Reduce sick leave by 25% (25% of the cost of unscheduled absences is $662.50. The wellness program will have already paid for itself more than twice!)

Even if the program only affects 10% of employees (the average IncentFit program gets over 55% monthly engagement) but pushes that 10% to make meaningful changes in their productivity (from retention, engagement, energy-levels, etc…), you will already see a positive return on investment. Assuming that we make the affected subset of employees 10% more productive, that will lead to a 1% increase in overall productivity of your workforce (10% of employees * 10% more productive = 1% overall workforce productivity gain). Since you’ve only invested half that, you immediately get a 2x return on your investment…and that’s the worst case scenario! That’s why engaging wellness programs like IncentFit have a guaranteed return on investment.

This article was originally published on the IncentFit Blog