Determining the ROI for wellness programs

Health insurance continues to rise at an unaffordable rate for just about every organization. That is forcing most employers to rethink the levels of coverage they can afford to offer as a benefit, and to look for ways to reduce the need for employee medical care.

The result is a focus on wellness programs, as a means of keeping employees more healthy in the first place. In some cases, the insurance providers are mandating that their client organizations put wellness programs front and center.

There is good news in this for the bean counters: according to compensation expert Robert Buckley, an executive coach and consultant in Bernardsville, NJ. Buckley says that ROI can be easily determined for investing in wellness programs, and he cites two leading employers in his area.

"Forward thinking companies like Johnson & Johnson (New Brunswick, NJ) and Verizon (Basking Ridge, NJ) have been offering fully-staffed on-site gyms or memberships at outside clubs for a long time," Buckley says. "The recent change however -- and what I find cool -- is the approach being taken by wellness providers. The new economic realities of our economy are behind a new corporate/non-for-profit partnership to bring wellness to the workplace."

Buckley points out that no CFO argues the benefits of wellness programs. But they often balk at cost. 

"It is here that organizations like the Somerset Hills YMCA (www.somersethillsymca.org) are tailoring their approach," Buckley explains. "SSHYMCA has retained professionals in the areas of HR and finance to analyze the internal costs of a company interested in starting a wellness initiative. By applying HR metrics with bench marked data, projections can be made against a company’s financial statements to reduce healthcare risk, lower insurance premiums and reduce absenteeism and/or 'presenteeism' -- which are those employees who report to work but under perform due to diminished health."

Buckley says "corporations -- using their actual internal cost data and industry benchmarks (that they contribute to) -- find it easier to navigate the cost obstacle. Wellness initiatives can now be expressed in project management terms, which is easy to do. This elevates wellness from an expense that lowers net income (dividends or reinvestment) available to shareholders, to an investment in human assets expressed in terms of Net Present Value that creates wealth for shareholders."