ROI vs VOI … are you measuring the real impact of your employee wellness program?
How does your organization measure the success of your employee wellness program? Do you calculate ROI (return on investment), VOI (value on investment) or some combination of both?
ROI measures the monetary return related to wellness programs. It may include overall healthcare cost savings and productivity increases from reduced absenteeism and sick leave. ROI is strictly a financial measure, reported in dollars and cents.
On the other hand, VOI looks at more than just budget numbers. It assesses the overall value received from a wellness program. VOI takes into account other intangible benefits derived from a wellness investment such as recruitment, retention, employee morale, decreased use of sick days and increased productivity.
ROI vs VOI: is one better?
ROI and VOI are both useful tools — they simply measure different aspects of wellness. Which is more suitable for your organization? That depends on the goals you have developed and your organization’s culture. Employers should reexamine the reasons why they offered a wellness program initially. Wellness programs are often implemented with goals of controlling healthcare costs, improving employee health and productivity. Does your program have more of a “people” focus, a “productivity” focus, or perhaps a different focus that makes either ROI or VOI more appropriate?
It’s important to use measurements that assess the stated strategic goals of your wellness initiatives. Was your goal to improve specific aggregate health data (biometrics, tobacco-use rates) or was it to improve your employee health culture and employee engagement? These “softer” measures can be more difficult to quantify and measure.
It’s important to consider the style of your program. What type of activities do you offer? Do you focus on employee education? Do you have a results-oriented program with outcome-based incentives? Your answers can help determine whether ROI or VOI is the most useful method of measuring progress. At Advocate Aurora Health our focus is on overall employee wellbeing, rather than just physical health. We help people live well. This wholistic approach is best evaluated by VOI, because we can account for our employees’ improved wellbeing, outside of their physical health.
Employee opinions matter
Try to determine the wellness goals of your employees. What are their core values? Which barriers do they face in meeting their wellness goals? Are employees satisfied with your wellness offerings? What are your employees’ perceptions of their total wellbeing – financial, spiritual, relational, emotional? Employee perceptions can be measured over time through surveys, meetings or focus groups.
Employee feedback can be used as a guide to look for areas of improvement. Remember, the impact of any wellness program typically takes three to five years before you see the needle move. If things are improving, even a bit, your program is making a positive impact.
Keep score along the way
Common metrics measured include participation rates in wellness programming or activities, since they are easy to measure. However, participation rates don’t always translate into improved outcomes. If health metrics/biometrics are being used to assess ROI or VOI, they should not be self-reported. Measures should be tied to external or national benchmarks to produce useful comparisons. Internal benchmarks (year-over-year comparisons) are another way to gauge an accurate assessment of change.
To track the impact of your wellness programs, consider using a wellness “scorecard” and managing it over time. This could include multiple measures in different groups or broad categories. At Advocate Aurora Health we track five categories on our wellness dashboard:
• Tobacco use
• Behavioral Health
Consider a hybrid approach
A wellness scorecard could include metrics associated with cost savings (usually medical claims savings, decreases in sick days) to get at ROI, as well as broader measures to assess VOI. Although VOI categories are more difficult to quantify, “returns” of a successful wellness program can often be seen in:
• Employee engagement and improved morale
• A culture of wellness
• Employee productivity
• Recruitment and retention
• Employee job satisfaction
While measuring concrete ROI savings may help justify the cost of your wellness program, the additional benefits achieved by improving employees' overall health and well-being shouldn’t be ignored. Hard numbers can’t capture all of the benefits of an employee wellness program. Employers would be wise to not only consider ROI, but VOI as well.
Kelly Sutton, MBA, CCWS, is Aurora’s Wellness Program Manager