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According to a survey by the Society for Human Resource Management, “about three-quarters of respondents (76 percent) indicated their organization offered some type of a wellness program, resource or service to employees.” And more than two-thirds of these organizations indicated that their efforts were “somewhat effective or very effective” in reducing the cost of health care premiums.

But at what cost?

A review by a Harvard economist, What’s the Hard Return on Employee Wellness Programs?, reported that wellness programs returned $3 in both health care savings and reduced absenteeism for every dollar invested. However, a Rand Corporation Brief, Do Workplace Wellness Programs Save Employers Money?, questioned those findings in a 10 year analysis of Fortune 100 Employers, and reported a $1.50 return on such programs.

One thing is clear, if done correctly, a financial wellness program can yield positive results. But, in a world driven by numbers, how can we prove that?

The return on investment (ROI) related to a financial wellness program can be broken down into several components. First, a company must calculate the savings related to increased productivity and reduced absenteeism, followed by an analysis of health care costs before and after the program. Calculating the ROI based on these two components allows companies to make a fair assessment and justification for implementing such program.

Other Factors to Consider

The Rand Corporation’s findings, while positive, were limited in their scope of analysis. The study examined the ROI in relation to “disease management” and “lifestyle management.” However, researchers didn’t take into account what SHRM calls, “The Employee Positivity Factor” or “additional productivity benefit from the lifestyle management component, which is commonly excluded from ROI analyses of wellness programs.”

When employees aren’t feeling well physically and/or emotionally, their productivity declines. But what causes employees to feel physically and emotionally ill? Money. According to the American Psychological Association, money has been the biggest cause of stress among Americans. Nearly 75% of adults reported being stressed about money at least some of the time, while 22% reported extreme stress over money in the past month.

Employees who are financially stressed out are more likely to spend time at work trying to find a solution to financial problems. According to PricewaterhouseCooper, 39% of employees spend at least three hours each week either thinking about or dealing with financial problems at work. They’re also more likely to barrage HR with a bevy of questions pertaining to their financial situation.

But that’s not all. When a person is stressed out, the body’s adrenal glands release a surge of the stress hormone known as Cortisol. Cortisol increases glucose in the bloodstream and enhances the brain’s use of glucose, which is why you crave sweets when you’re stressed out.

Stress can lead to a number of health-related complications including:

  • Anxiety
  • Depression
  • Digestive problems
  • Heart disease
  • Sleep problems
  • Weight gain
  • Memory and concentration impairment

It’s no surprise why employees take so many days off to visit the doctor. Or why reducing the stress of your employees can affect your company's bottom line.

While concrete evidence of lower health-care premiums and reduced number of sicks days is a great method for calculating ROI, the additional benefits resulting from the “Employee Positivity Factor” should not be overlooked. These benefits could prove to pay greater dividends.

The questions below draw on consumer research and offer a starting point for quantifying the ROI of a financial wellness program:

  1. What value would your company place on reducing employee stress as it relates to increased health premiums and lost productivity?
  2. How much profit is lost when an employee leaves for the day to visit the doctor? What does it cost – in time, out-of-pocket expense, lost productivity, etc.
  3. How much incremental business could you drive by decreasing absenteeism? What would a 15% increase in productivity do to your organization’s bottom line profit?
  4. How important is it for your company to reduce employee turnover?
  5. How important is it for your organization to hire better employees?
  6. What are you doing to improve the life of your workers vs your competitors?
  7. What value do you place on developing the skills of your workers?
  8. What value can you derive from knowing exactly what is mostly affecting employee performance?
  9. What value do you place on the goodwill that grows out of helping your employees manage and improve their financial condition?
  10. What kind of opportunities could you create to deepen relationships with employees in a way that drives revenue and lowers costs for your organization, while saving money and delivering improved returns?