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Quantifying the ROI of a Financial Wellness Program: Questions to Ask

Employers and Organizations

How to Calculate Financial Wellness ROI


Last Update: June 29, 2020

Financial stress impacts all facets of life.

In fact, 69 percent of adults who say they are financially stressed spend three or more hours each week dealing with financial matters while working.1

Studies show that these employees are less productive, absent more often, participate less in company 401(k) programs, have more on-the-job accidents, don’t retire on time and are more likely to leave the company, causing higher turnover rates.2,3

A comprehensive financial wellness program can help employees become financially healthy while improving the company’s bottom line. 

Most companies want to know return on investment before starting any new program. 

Because many factors affect the ROI, it is impossible to know the exact ROI of any given financial wellness program.

However, it is possible to calculate your company’s specific ROI.

Here’s how.

6 Steps for Calculating Your Financial Wellness Program’s ROI

Step 1: Collect Initial HR Data: To understand your financial wellness program’s ROI, you have to know certain data before actually launching the program.

What you choose to measure will be up to you, however, the more data you collect, the more accurate your ROI calculations will be.

Here is a list of data points for the year prior to implementing the program that you may wish to consider:

  • Absenteeism: The number of sick days taken by employees. This number can be the total number of sick days or the average sick days per employee.
  • 401(k) participation: The number of employees participating in the company 401(k) program, as well as the average contribution and the number of employees who max their contribution. This will help you determine your yearly tax savings.
  • Other benefit participation: The number of employees participating in other company pre-taxed benefits such as medical, HSA, dependent care, etc.
  • Number of on-the-job accidents: The number of accidents per year and/or the average accidents per 1,000 employees.
  • Employee turnover: The number of new hires due to employee turnover. This number does not include new hires due to growth or new hires due to planned retirements. In addition to the number of turnovers, you will need to determine the average cost of hiring and training new employees due to turnover.
  • Number of employees working beyond retirement: The number of employees still on the job beyond age 65.
  • Cost of financial wellness program per employee: Either the cost of the financial wellness program will be sold to you as a cost per employee or you can determine the cost per employee by dividing the total yearly cost of the program by the number of employees who will have access to the program.

In addition to these numbers, you may also try to determine HR administration costs for dealing with benefit explanation, 401(k) loans, payroll loans/advances and wage garnishment.

To determine this cost, multiply the hours by the average HR employee wage.

Step #2: Collect Employee Data through an Anonymous Survey: You will want to understand how many employees have financial stress before implementing the financial wellness program.

You can ask questions to help you understand such things as presenteeism, loyalty to the company, barriers to using company retirement benefits and more.

To get accurate information, your employees must feel assured that their answers will truly be anonymous. 

Questions to consider include:

  • On a scale from no stress, some stress, moderate stress, high stress, very high stress, what is your current financial stress level?
  • Has financial stress caused any of the following problems for you in the past year? (Mark all that apply) The list of issues could include not saving for emergencies, not saving for retirement, not paying bills on time, borrowing money from a retirement fund, taking out a payday or title loan, using credit cards to pay for recurring needs, filing bankruptcy, etc
  • Do your financial concerns affect your concentration or productivity at work?
  • How many hours per week do you spend on your financial concerns while at work?
  • How likely are you to look for different employment due to financial stress?
  • On a scale, how much do you feel [Name of Your Company] cares about you as an employee?
  • Are you planning to retire at age 65? If not, how many extra years do you feel you will need to work before retiring?

These questions can help you collect data such as:

Presenteeism: How much money you spend on employee distraction.

The survey can help you determine the number of hours employees are distracted at work.

Multiply the hours by the average employee wage.

Company Loyalty: This can help you determine the number of employees seriously looking for another job to help you determine the possibility of future employee turnover.

Retirement: Determine how many employees do not plan to retire on time.

Current employee stress levels: Even if you don’t determine exact monetary loss due to employee financial stress, knowing the level of stress in employees can help you estimate financial loss based on recent surveys.

For example, if you have 100 employees who say they are financially unwell, you can estimate that 66 of them spend three hours per week on financial matters while at work.

That can be multiplied by the average hourly wage to come up with a presenteeism loss.

For more on this, read “How to Create an Employee Financial Wellness Survey”.

Step 3: Roll Out Financial Wellness Program: Once you have the initial data, it is time to roll out the program. Be sure to communicate the existence of the program and provide incentives for participation. Research financial wellness program best practices before launching your program.

Step 4: Collect Data after a Given Time: You’ll need to know the difference between starting data and finishing data to calculate an ROI.

  • Data collection: Be sure to collect “after” data for all areas in which you collected “before” data.
  • Determine employee usage: Most financial wellness programs provide reporting to measure registrations and usage. For better results, take it one step further and measure employee engagement.
  • Conduct another survey: Ask employees the same questions to determine whether financial stress levels have decreased, presenteeism has decreased, and loyalty has increased. This would also be a perfect opportunity to get input about the program, what employees felt was most useful, and what they’d like to see as additional financial wellness components.

Step 5: Make Calculations: Once you have all the before and after data, it is time to crunch the numbers.

  • Absenteeism: [Before sick days – After sick days] x average daily employee pay. If you have the appropriate data, you can break this down even further by employee category so that average daily employee pay reflects the pay of any given sector within your company.
  • 401(k) Participation: [Difference between Before and After Pretax dollars invested in company 401(k)] times the percent of social security payroll tax, which is currently 6.2 percent.
  • Other Benefit Participation: [Difference between Before and After Pretax dollars for other company benefits] times the percent of social security payroll tax, which is currently 6.2 percent.
  • Accidents: [Before accidents x 0.70 (percent of accidents caused by stress3) x percentage of Before stressed employees] – [After accidents x 0.70 x percentage of after stressed employees] times the average cost per accident. The most recent OSHA survey shows this to be $10,000 per incident.4
  • Turnover: [Before turnover rate – After turnover rate] times the cost of recruiting and training new employees. If you don’t have an average cost, one recent study suggests the average is $4129 per employee.5
  • On-time retirement: [Before delayed retirement – After delayed retirement] x $50,000, which is the average amount it costs per year for delayed retirement.6 You can also look at the before and after numbers of those who feel they will retire on time to estimate the amount of future money saved by helping employees retire on time.
  • HR Administrative Costs: [Before hours minus After hours] x average hourly HR pay. These hours should include time needed to deal with 401(k) loans, payroll advances, wage garnishments, and employee benefits questions.
  • Presenteeism: [Before hours spent dealing with financial matters while on the job – After hours spent dealing with financial matters on the job] times average employee hourly wage.

Step 6: Calculate ROI: To calculate the ROI, you will add up all the savings experienced in Step 5. Then you will divide the savings by the cost of the financial wellness program x 100 (to get a percent).

For example, if you saved $775,000 on a program that cost you $80,000, your ROI would be 775,000/80,000 x 100 = 969 percent.

This means that for every dollar you spent on a financial wellness program, your company gained $9.69.

For a more in-depth walk-through with examples, check out our whitepaper titled “How to Calculate the ROI for Employee Financial Wellness.”




1 - https://hrexecutive.com/employees-are-stressed-about-finances-heres-how-employers-can-help/

2 - https://www.pwc.com/us/en/industries/private-company-services/library/financial-well-being-retirement-survey.html

3 - https://www.ehstoday.com/health/article/21917550/burnt-out-stress-on-the-job-infographic

4 - https://www.oshatrain.org/courses/pages/700costs.html

5 - https://www.shrm.org/about-shrm/press-room/press-releases/pages/human-capital-benchmarking-report.aspx

6 - https://www.prudential.com/corporate-insights/employers-should-care-cost-delayed-retirements

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