The ROI on Health

Health investments aren’t just nice to have. They drive real business results. Through better health initiatives, organisations can decrease absenteeism, provide greater productivity, improve employee retention, and support a higher quality of work. Improved health initiatives and a culture of safety and wellbeing ultimately lead to attracting a higher quality of employees and superior ROI overall.


Decreased Absenteeism and Greater Productivity

Absenteeism costs the Australian economy more than $44 billion annually. In New Zealand, absenteeism costs about $600 to $1,000 a year per employee. Presenteeism — attending work, but doing nothing — is also costly, though more challenging to quantify. When employees are injured, stressed, depressed, or otherwise haven’t been able to prioritise their mental and physical health, they are less likely to show up. By putting a greater emphasis on employee health and wellbeing, employers can encourage employees to show up and to work harder.


Employee Retention and Lower Staff Turnover

It costs as much as 33 percent of a worker’s annual salary to replace them. For an employee making $45,000, the average cost of turnover is $15,000. Employees who don’t feel valued by their employers are more likely to leave. Many employees don’t leave a job; they leave their managers. If you want your organisation to have lower turnover and higher levels of employee retention, you need to show them that you’re prioritising their health and wellbeing. Health and wellbeing programs can help.


Smarter-Working Employees and Higher Quality Work

Higher levels of job satisfaction lead directly to improved employee performance, which is part of overall ROI. When employees are stressed, anxious, or depressed, they aren’t able to focus as well on work. While they may be trying their best, they may not be able to deliver high-quality work. But when employees are more comfortable at work and ready to take care of themselves mentally and physically, they are more motivated to go the extra distance with their projects. Having motivated employees is especially more important now, as workers navigate a VUCA world due to COVID. Employees will deliver better work if they feel their company is prioritising them, and companies, in turn, will be able to achieve better work to their clients.


Attract High-Performing Employees

High-performing employees naturally gravitate to employers who will value them. Health and wellbeing initiatives can improve an organisation’s reputation, thereby attracting higher-performing employees. Three quarters (75 percent) of Australian employees believe that workplaces should provide mental health support; it’s an employee expectation. Going above and beyond can help an organisation draw in the best talent—the better the talent, the higher the ROI for the organisation.


Your Bottom Line Will Thank You

Companies need to consider their bottom line and understand how employees can impact it. In addition to providing a better environment for employees, health and wellness programs can positively impact productivity. Studies in the United States showed that employers who invested in health and wellness initiatives saw $6 in healthcare savings for every dollar invested. Of course, Australia is a different market as per capita healthcare spend is lower — but there are many other ways in which health and wellness initiatives improve an organisation’s ROI.
Through health and wellness initiatives, organisations can reduce absenteeism, encourage higher levels of productivity, and procure the best talent. This long-term strategy will develop a better and more stable foundation for the organisation as it expands.


Measuring the Return on Initiatives

To succeed, health and wellbeing initiatives need to be supported by the executive team. But key stakeholders may be hesitant to invest money into health and wellbeing programs without seeing a clear return. Because so many of the effects of better employee health may be challenging to quantify, showing direct ROI can be a challenge. How do organizations measure the return of their initiatives?
Organizations need to think broadly and measure the financial return on their health and wellbeing strategies through the following:

  •  ROI: Return on Investment, the amount of money that an investment gains the organization.
  •  VOI: Value of Investment represents the ROI of health in addition to “soft returns,” such as boosted productivity.

Organizations must be able to compare their expenses and income before their initiatives and after their initiatives. Often, they may need an expert partner to analyze their data and show where their cost savings are. As an example:

  • ⦁ An organization may see employees taking less time off following health initiatives. Their cost savings will be relative to the amount of money otherwise spent on absentee employees.
  • ⦁ An organization may see fewer employees leaving after they engage with health and wellness programs. The cost savings will include the amount of money it would cost to train new employees.
  • ⦁ An organization may see its medical costs dropping because employees are healthier overall. These cost savings would be relative to the number of medical costs in the past, compared to the current amount of medical costs.

Thus, measuring the return on your health and wellness initiatives is involved in and of itself. A trustworthy partner will be able to collect and compile data regarding the appropriate metrics, so you can see how well your programs are performing, as well as identify anything that may need to be changed.

What challenges does it tackle?

Reducing onsite accidents

These cost Australian businesses $61.2B a year.

Reducing onsite accidents

These cost Australian businesses $61.2B a year.

Reducing onsite accidents

These cost Australian businesses $61.2B a year.

Reducing onsite accidents

These cost Australian businesses $61.2B a year.

How it works

Our qualified professionals coach and educate your team to recognise your body’s warning signs that signal it’s time for a physical and mental reset. Delivered onsite, your team can put theory into action within their own work environment, which increases uptake and memorability while recruiting champions from within your team helps the change become part of the culture.

We understand every workplace is unique, so we use a 4-step approach to understand exactly where we need to focus.