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Which Employee Benefits Have the Highest ROI?


Last Update: November 16, 2020

Employee benefits is an umbrella term used when discussing various non-wage compensation programs provided by employers to their employees.

The purpose of such benefits is to attract and retain top talent and based on recent statistics, benefits do matter:

69 percent of employees feel that more and better benefits increase company loyalty[i]

41 percent of employees would look for a new job if that new job had better benefits[ii]

60 percent of job seekers consider benefits as a major factor when choosing a new job[iii]

Because benefits are so important to employees and potential employees, companies work hard to create an attractive benefits package.

Three Types of Employee Benefits

In general, employee benefits fall into three main categories:

Benefits required by law, such minimum wage and overtime pay

Benefits that are considered standard, such as healthcare and paid vacation

Benefits that are an added bonus

Naturally, the benefits required by law will make it into your benefits package. However, determining which other benefits to add – from life insurance to pet insurance to a company car – is a complex decision.

A 2018 report by Randstad[iv] found that 94 percent of employees want benefits that offer a meaningful impact on their quality of life. On the other hand, employers need to determine which benefits make the most financial sense.

To that end, here is a look at the return on investment (ROI) of a few benefits most sought after by employees.

Healthcare Insurance

Though not a mandated benefit for all employers, healthcare coverage is a standard benefit that most employees expect, especially when working for a mid-size company or larger.

Health insurance policies are used to cover specified medical expenses, and some include dental and vision coverage as options. About half of all Americans get their health coverage through an employer.[v]

Determining the return on investment of healthcare policies is tricky. The ROI depends on many factors, such as:

Size of the company

Number of employees participating

Percentage of employee premium paid by the employer

Percentage of employee dependent premiums paid by the employer

Policy deductibles

Policy coverage

However, a recent US Chamber of Commerce report found that health programs (including general healthcare, dental, and vision) have an ROI of $2 to $3 over a two- to nine-year period.[vi]

Health Insurance ROI = 200 to 300 percent

Health Wellness Programs

In addition to offering healthcare insurance that helps employees cover medical expenses, many companies (84 percent)[vii] now offer health wellness programs to help employees stay healthy. Such programs focus on employee well-being through such things as diet and exercise, stress reduction, and smoking cessation.

In addition to health insurance plans, there are several other ways that employers can impact their employees' health in a positive way.

According to a recent Harvard study[viii], employee wellness reduces medical costs and absenteeism, bringing companies an ROI of $6.

Health Wellness ROI = 600 percent

Mental Health Benefits

Mental health benefits deal specifically with an employee’s emotional, psychological, and social well-being. The purpose of such benefits and programs is to help employees handle stress, relate well to others, and make reasonable choices.

Related article: Data Shows Strong Link Between Financial Wellness and Mental Health

A report from the International Foundation of Employee Benefit Plans found that 90 percent of employers offer some type of mental health benefit.[ix] The most popular include[x]:

EAPs: 90 percent

Mental-health coverage: 87 percent

Substance abuse treatment coverage/benefits: 73 percent

A mental-health assessment included in a health-risk assessment (HRA): 35 percent

Mental-health educational/informational sessions at the workplace: 34 percent

Stress-management programs: 23 percent

A Deloitte study[xi] found that the average ROI for mental health benefits is $1.62 per dollar spent after one year and $2.18 per dollar spent after three or more years.

Mental Health Benefits ROI = 162 percent to 218 percent

Tuition Reimbursement

Americans are drowning in student loan debt. As of the third quarter of 2020, 42.3 million Americans have $1.55 billion in federal student loan debt.[xii] With so many affected, there is no doubt that every company has employees carrying or considering student loans.

That’s why some employers offer tuition reimbursement programs. Such programs allow employees to take classes and be compensated for the tuition, or some portion of the tuition, based on grades and completion of the class. By offering tuition assistance, companies can encourage employees to seek higher education, keep employee retention rates high, and bring an added value to the company.

Although finding a generalized ROI is difficult, Accenture conducted a study of Cigna and found that they earned an ROI of $1.29 per dollar spent.[xiii]

Tuition Reimbursement ROI = 129 percent

Flex-Time and Telecommuting

Before COVID-19, IWG found that almost three-quarters of people worldwide work from home at least once a week.[xiv] In the U.S., remote work increased by 159 percent between 2005 and 2017. Since the pandemic, these numbers have continued to soar.

In general, employees like the flexibility offered by flex-time and telecommuting. It allows them to accommodate their lifestyle and family.

Offering this type of benefit makes good sense. An AARP report found that flex-time ROI is between $1.70 and $4.34 and the telecommuting ROI is similar.[xv]

Flex-time ROI = 170 to 434 percent

Telecommuting ROI = 246 to 445 percent

Financial Wellness Benefits

Financial wellness benefits may be offered in addition to providing employees with some form of retirement investing, such as a 401(k). There are many different types of financial wellness benefits. However, a holistic financial education program has the highest ROI of these.

Holistic financial wellness will help employees understand financial topics and issues so that they can become and remain financially well.

This includes such things as:

Understanding how to budget

How to build credit

How to reduce debt

Managing student loans

Creating short-term and emergency savings

Understanding personal financial attitudes

Setting financial goals

Dealing with financial crises

The PWC Employee Wellness Survey found that 71 percent of employees who have access to a financial wellness program have used it,[xvi] while data from Enrich users in 2019 shows how these programs are used[xvii].

The Enrich behavior change studies have shown that users increased short-term savings, increased emergency funds savings, contributed more to their retirement plan, and were better at paying off their credit cards.

Many studies put the financial wellness ROI at 3:1[xviii], however, Enrich provides data in its whitepaper “Calculating the ROI for Employee Financial Wellness” showing an ROI of 15:1 or greater when taking into account the lowered costs of digital solutions. 

Digital financial wellness solutions can drive metrics like increased productivity, decreased absenteeism, reduced HR administrative costs, reduced payroll taxes, increased 401(k) participation, reduced healthcare premiums, reduced on-the-job accidents, reduced employee turnover, and increased on-time retirement.

Financial Wellness ROI = 300 to 1500 percent

For more information about the Enrich financial wellness solutions, watch our demo video here.



i - https://www.metlife.com/employee-benefit-trends/ebts2020-holistic-well-being-drives-workforce-success/

ii - https://www.businesswire.com/news/home/20191218005046/en/workers percentE2 percent80 percent99-list-time-flexibility

iii - https://www.glassdoor.com/employers/blog/salary-benefits-survey/

iv - https://www.prnewswire.com/news-releases/the-benefits-of-benefits-why-employers-cant-afford-inadequate-workplace-perks-300668407.html

v - https://www.kff.org/other/state-indicator/total-population/

vi - https://www.uschamber.com/sites/default/files/022436_labr_wellness_report_opt.pdf

vii - https://www.kff.org/private-insurance/issue-brief/trends-in-workplace-wellness-programs-and-evolving-federal-standards/

viii - https://www.eniweb.com/wp-content/uploads/2017/05/Employee_Benefits__Wellness_Excellence_JUNE_2018.pdf

ix - https://www.ifebp.org/store/Pages/workplace-wellness.aspx

x - https://hrexecutive.com/employers-taking-a-bigger-look-at-mental-health/

xi - https://markets.businessinsider.com/news/stocks/deloitte-research-reveals-significant-return-on-investment-for-workplace-mental-health-programs-1028653803

xii - https://studentaid.gov/data-center/student/portfolio

xiii- https://www.diversitybestpractices.com/sites/diversitybestpractices.com/files/attachments/2018/05/student_loan_relief_tuition_reimbursement.docx_5.4.pdf

xiv - https://www.cnbc.com/2018/05/30/70-percent-of-people

xv - https://respectcaregivers.org/wp-content/uploads/2016/04/AARP-ROI-Report-FINAL-4.1.16.pdf

xvi - https://www.pwc.com/us/en/industries/private-company-services/images/pwc-8th-annual-employee-financial-wellness-survey-2019-results.pdf

xvii - http://media.igrad.com/docs/pdf/marketing/Calculate-ROI-for-employee-financial-wellness-program.pdf

xviii - https://www.soa.org/globalassets/assets/files/resources/essays-monographs/financial-wellness/2017-financial-wellness-essay-ward.pdf

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