Employers not evaluating effectiveness of wellness programs: Conference Board

Less than 1 per cent formally analyze ROI, measurement needed to make business case
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 09/11/2012

A few years ago, telecommunications company Telus conducted biometric screening and health-risk assessments (HRAs) of 500 of its middle managers. It determined 61 per cent had at least one risk factor, the most common being heart disease, activity levels, body mass index and blood pressure.

On average, each risk factor an employee had was costing Telus about $2,000 per year, per employee, said Janet Crowe, director of wellness and workplace solutions at Telus in Vancouver, which has about 40,000 employees across Canada.

To combat this, Telus offered health coaching around each employee’s risk factors and, in one year, saw tremendous results, including a return on investment of $3.80 for every dollar spent.

“Their risk factors dropped significantly enough that we knew their health was better, they’re less likely to be absent, less likely to have presenteeism at work. It was a predictive model we used to say, ‘Now that somebody has dropped their blood pressure, their body mass index, they’re more active, let’s look at that,’” said Crowe. “That was the start of our ROI.”

While many employers offer a variety of wellness programs, very few are evaluating these programs, according to a report by the Conference Board of Canada. Less than one-third of organizations evaluate program outcomes and less than one per cent formally analyze ROI, according to Making the Business Case for Investments in Workplace Health and Wellness.

“Inherently, senior leaders know that investment in wellness is good for their organization — that’s a given in Canada,” said Louise Chénier, a research associate at the Conference Board in Ottawa and co-author of the report. “They know that having healthy employees leads to greater productivity but there’s a lot of barriers to measuring the return on investment that make it a bit more scary for employers to calculate.”

Some common barriers include: lack of staff and other resources; lack of expertise and understanding of how to measure the program’s impact; inadequate HR information systems; and difficulty collecting and integrating data from a variety of external vendors, according to the report.

Evaluating the effectiveness of wellness programs is important in making the business case for these initiatives to senior leaders, said the report. This allows HR professionals to demonstrate the financial benefits of a program and how it can impact the bottom line, which will help sustain it in the long term, said Eric Pfeiffer, a senior consultant at Standard Life in Toronto.

“To be able to say, ‘Not only is this great for our employees and their health and productivity but, at the end, there’s also financial incentive to do it as well,’ I think that really piques (the executives’) interest or gets them to more easily buy into the program going forward,” he said.

Look to find greatest impact

It’s also important to evaluate wellness programs to ensure efforts are being directed where they will have the greatest impact, found the report.

“If you’re not seeing an impact — for example, you thought smoking was the problem and you created this whole smoking-cessation program but employees weren’t really ready to change their behaviour —you can target that and you can switch your programs a bit and modify them and target a behaviour that might result in more impact,” said Chénier.

At Telus, the wellness strategy is aligned with the strategic imperatives of the business, which is essential in making the business case for the programs, according to the report.

“We’re always looking back to ‘What are the needs of our business, how do we align to that strategy?’ and, if it doesn’t align, we say, ‘This is not going to happen, this isn’t what we’re doing,’” she said.

Telus has a variety of wellness programs in place, including ones around nutrition, active living, and cold and flu readiness, as well as screenings for osteoporosis, blood pressure, cholesterol and cancer, said Crowe.

In evaluating and modifying its wellness strategy, Telus considers all the cost drivers within the organization, such as drug costs, employee assistance program usage, short- and long-term disability claims, workers’ compensation claims, absenteeism and productivity, said Crowe. All these metrics are good tools employers can use to evaluate wellness programs, found the report.

“One employer isn’t going to use every one of the metrics, they may not be applicable, so the organization really has to see what works for them and which of these metrics are going to be impacted by their wellness program,” said Pfeiffer.

When evaluating their wellness programs, employers should also consider how they positively impact some of the more intangible metrics, such as turnover, recruitment, employee engagement, corporate reputation, customer satisfaction and organizational culture, found the Conference Board.

“It enables trust from an organizational perspective when they show that they care about their team members,” said Crowe. “I can’t even count how many people have come to me when we’ve done the breast cancer screening program and said, ‘If you didn’t do this program, I would be dead — we found breast cancer.’ How can you measure that?”

While calculating ROI may be the ultimate goal in evaluating wellness programs, it’s not a good idea for employers that are just getting started, said Chénier.

“It all depends on where you are on the wellness journey,” she said. “If you’re just starting out and doing fundamental steps — for example lunch-and-learns, educational sessions or wellness fairs — we don’t recommend you calculate ROI for that. The impacts are not going to necessarily be organizational but individual.”

Employers can also evaluate their wellness programs through participation rates, program evaluation forms, employee surveys or changes in health risks, according to the report.

Going forward, health and wellness practitioners need to focus on evaluating their wellness programs — and strive to calculate ROI — because there is a growing trend towards greater accountability for all corporate expenditures, said the report.

And this will only continue as companies move away from basic wellness programs to more comprehensive ones, said Pfeiffer.

“When you start going to your C-suite and asking for additional money, they’re going to want to know where that is going and what the return on that is going to be,” he said.

“A lot of CEOs know it’s a good thing to do, but when you have to start providing financing behind that to support the program, that’s when the tougher questions come out.”


Measurement framework

How sophisticated is your wellness program?

Making the Business Case for Investments in Workplace Health and Wellness, a report by the Conference Board of Canada, set out a measurement framework for evaluating wellness programs.

Fundamental

Intermediate

Sophisticated

Steps/programs

•One-time wellness events
•Lunch-and-learns
•Monthly educational sessions

•All fundamental steps
•Regular health-risk assessments
•Biometric screenings

•All fundamental and intermediate steps
•Targeted, integrated and comprehensive programs
•Health coaching

Outcomes/impacts

•Employee satisfaction within program
•Increased employee awareness of health-related issues

•All fundamental impacts
•Shifts in health profile of workforce

•All fundamental and intermediate impacts
•Strategic human resources drivers: improvements in absenteeism, presenteeism,employee engagement

Metrics/measures

•Participation rate in wellness events
•Employee satisfaction with wellness program

•All fundamental measures
•Changes in health-risk status of employees
•Changes in drug costs
•Reductions in short-and long-term disability claims

•All fundamental and intermediate measures
•Changes in strategic human resource drivers
•Return on investment calculations

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