There is a strong financial rationale for increasing your wellness initiatives. Yes - the pandemic has shifted the expectations of workers. The sooner an organization takes action to meet these new expectations the sooner they can REAP the rewards of their investment. The return on this Investment (ROI) is high.
By REAP the rewards, I mean an improvement in Retention, Engagement, Acquisition, and Productivity. (When the acronym fits, use it!) Here are some indicators of the costs associated when these four elements are in crisis.
Retention: A company that fails at improving employee retention will experience less growth and more expense. According to Gallup, replacing one employee can cost a company up to double the employee’s annual salary. For example, replacing an employee who made $50,000 per year would cost the company around $100,000. According to another study, 45% of Americans are more willing to stay in their jobs when their companies sponsor wellness support programs.
Engagement: When employees go through burnout, lethargy, or low morale, they might end up practicing presenteeism. It’s when workers come to work, clocking in and out without really doing much in between. It is estimated that the cost associated with presenteeism due to poor employee health is at least 2 to 3 times greater than direct health care expenses.
The Global Corporate Challenge (GCC) Insights report published in 2016 also identified presenteeism as a bigger problem than absenteeism. Their report found that while employees were absent from work an average of four days per year each, they confessed to being unproductive on the job for 57.5 days each – almost three working months.
Acquisition: A 2018 Forbes article posted statistics from various sources regarding the connection between wellness programs and employee recruitment including the fact that 87% of employees choose employers based on the health and wellness programs.
Productivity: A study done by The Engagement Institute in 2017 projected that disengagement cost employers in the USA $450-550 Billion a year. Employees with low morale had a low quality of work, high absenteeism, and high tardiness. Even pre-pandemic, low engagement was a high expense.
So here’s a little upside as a motivator: organizations that invest in wellness perform better on Wall Street. A recent analysis by Dr. Steve Aldana that publicly traded companies with the best-in-class workplace wellness programs have better stock valuations than the S&P’s stock index. Companies that had received the Koop Award from The Wellness Project (a non-profit that recognizes exceptional wellness programs) had stock valuations that grew 26% over 15 years versus the S&P index of 11% a year.
Sure, there are a lot of fixes that need to also be considered to get your organization humming at a new level - such as changes to the culture, corporate structure and decision-making processes. But expanding the scope of your mental health and wellness program is a highly visible way to say to your employees that you care about their well being. Bringing holistic and integrative health practices in-house can complement your established fitness and nutrition programs. It can help reduce stress and stimulate engagement and productivity. It can help you attract new employees and keep the ones you have. And even if it does just one or two of these, the ROI is immediate.