A 2013 study by nonprofit global policy think tank Rand Corp. showed that wellness program participants spent on average $2.38 less per month on health care costs than nonparticipants in the first year of the program and $3.46 less per month in the fifth year.
But to bolster the ROI in wellness programs, employers should also measure their effect on engagement and productivity, said Owen Tripp, CEO of San Francisco-based Grand Rounds, an online service that connects patients and clinical experts.
According to a March study by Grand Rounds, 88 percent of benefits managers said they did not track costs incurred from employee absenteeism because of health reasons. “I think vendors are afraid that if they found out that they didn’t save any days, then their ROI tool for their clients gets thrown into question,” Tripp said.
Meanwhile, the C-suite is stepping up pressure on HR to demonstrate stronger return metrics for wellness programs, with engagement and productivity measures increasingly in demand, according to Thomas Parry, president of the Integrated Benefits Institute, a nonprofit that provides measurement tools for benefits programs.
In a recent IBI survey of 700 chief financial officers, nearly all said it was not enough for HR leaders to rely on academic research demonstrating connections between participation in wellness programs and increased productivity. As a result, some vendors are trying to distinguish themselves by including engagement and productivity metrics.
David Almeda, chief people officer at workforce management software company Kronos Inc., said there is no single metric that will provide an organization complete insight into the effectiveness of its wellness initiatives. Instead, he said organizations should aim to use a variety of metrics to make conclusions about wellness’ effect on productivity and engagement.
“Incorporating questions about wellness initiatives into employee engagement assessments, tracking participation levels in wellness programs and measuring against job satisfaction can be useful to determine overall effectiveness,” Almeda said.
In many instances, employers don’t need to spend money directly measuring wellness programs’ effect on engagement and productivity. Employers can infer such correlations through other metrics like disease management, said Walter Chapman, CEO of Chapman and Chapman, a Cleveland-based employee benefits consulting firm.
Chapman said the firm is creating an online dashboard of metrics, including participation rates in wellness programs, absenteeism rates, claims metrics and participation in disease management programs — programs that track how often workers who have been diagnosed with a disease take their medications and participate in supportive programs. “The stronger the inferences, the more credible” the correlations, Chapman said.
Employers can also infer engagement and productivity by measuring demonstrable changes in behavior after participation in wellness programs, said Chris Boyce, CEO of Virgin Pulse, a health and employee engagement subsidiary of Virgin Group.
“When a person becomes physically active, it’s not only better for their physical health, but there’s also now a lot of data that says cognition is stronger,” Boyce said. “If wellness programs can actually improve cognition, then employees have more impact at work.” In a 2001 Duke University Medical Center study, for instance, exercisers had improved levels of attention and concentration, psychomotor speed, memory and “executive functioning.”
Moreover, Lisa Weston, director of wellness promotion for The Bagnall Co., a Phoenix-based partner firm of United Benefit Advisors, said asking questions about engagement and productivity on employee surveys and health-risk assessments can determine the effect of wellness on performance.
Specifically, employers can use assessments to determine:
- Absenteeism — the percentage of work missed because of health problems.
- Presenteeism — the amount of impairment while working because of health problems.
- Work productivity loss — the level of overall work impairment because of health problems.
- Activity impairment — the level of overall activity impairment because of health problems.
Employers can also measure wellness program correlation to job satisfaction by soliciting qualitative feedback, said Teresa White, executive vice president and chief operating officer at insurance firm Aflac Columbus.
“For instance, employers can conduct surveys, enabling them to track the effect of a program on employee health and job satisfaction,” White said. “This also gives employees the opportunity to provide feedback, offering companies insight on workers’ expectations and attitudes toward wellness efforts.”
Some, however, aren’t convinced these measures are worthy qualifiers. John Hennessy, a senior consultant at human resources consulting and research firm Hay Group, said it’s “almost impossible” to measure wellness programs’ influence on something like presenteeism. He also said it could be “overkill” to correlate how wellness programs might affect absenteeism and productivity, especially if employers already note excessive absences in performance reviews.
Subsequent reviews could note reduced absenteeism — and improved performance — due in part to participation in wellness programs. Therefore, there might be no need to invest in additional productivity metrics. An employee’s excessive absenteeism’s influence on performance can be ascertained through performance reviews.
Others disagree on the level of employee involvement in collecting qualifying data. Mike Maughan, product marketing manager for employee insight at online survey software provider Qualtrics, said employers should caution against asking employees directly about the qualitative effect of wellness programs because the questions can be too leading. This could potentially dilute the objectivity of the data collected.
Instead, Maughan said employers should use surveys that have workers rank various programs they believe most contributed to their engagement, with the wellness program as one of the choices. If the program ranks high for a particular employee, then the survey could have a second drop-down menu providing specific components of the wellness program. Then that particular employee would be asked to rank each component’s influence on engagement.
Others see value in asking employees directly if participation in wellness programs increased engagement and productivity.
“We think it’s a good idea to ask employees themselves because you can increase their buy-in to the program,” said Josh Stevens, CEO of wellness provider Keas.
According to Keas, which uses social networks, team challenges and apps like Fitbit and RunKeeper to make its programs more engaging, 84 percent of its program participants say participation improved their teamwork and collaboration at their company.
Jennifer Piliero, senior product manager at Ceridian LifeWorks, said the employee assistance provider asks participants involved in its smoking cessation, weight loss and stress reduction programs if their particular issue is affecting productivity and presence at work. She said Ceridian asks these questions before and after programs.
“It’s subjective, but if it heightens the person’s awareness, honestly I don’t think you’re going to get better data on productivity,” Piliero said.
Katie Kuehner-Hebert is a California-based freelance journalist. She can be reached at firstname.lastname@example.org.
To read the next story in Talent Management’s special report, please click here.