Are you measuring your program’s return on investment? If you are not, you should be. If you are measuring ROI, the metric you are most likely tracking is the “traditional” ROI, which measures program cost compared to health care cost savings. Although the traditional ROI is a good starting point, there is a new way to look at ROI these days. The new ROI, referred to as value of investment or VOI, looks further than medical costs and takes a look at absenteeism, presenteeism, and how they collectively impact your company’s productivity and more importantly your bottom line.

Defining Productivity

Absenteeism is a term to describe when someone is away from work and is it unplanned. Presenteeism compares actual performance at work compared to possible or expected work performance. Together, absenteeism and presenteeism define productivity.

Wellness Programs by the Numbers

Employers are starting to find their productivity-related costs may be surpassing their medical care costs. Are you one these employers? Do you know how your productivity losses compare to your medical costs?

Research shows employees with poor health are absent more and less productive at work, costing U.S. employers nearly $230 billion dollars per year. Research also indicates that 91% of full-time employees have at least one health condition that can negatively affect productivity (such as depression, hypertension, etc.). A typical full-time employee will miss an average of 1.6 days of work and has an average 3.9 days of presenteeism losses. This adds up to 5.5 days’ worth of work lost per year.

Say you have 1,000 employees at your organization and the average employee earns $44,888.16 per year (this is the 2013 national average wage). To mirror research, assume 91% of your population has one or more health conditions that is affecting their productivity.

  • If your average employee has 1.6 days of absenteeism per year, you are spending $251,363 per year.
  • If your average employee has 3.9 days’ worth of presenteeism, you are spending $612,699 per year.
  • If you add absenteeism and presenteeism costs together, you are spending $864,062 per year on lost productivity.

With the potential of spending thousands to millions of dollars annually on lost productivity, the potential impact of your wellness program is huge.

How Can You Measure Productivity, Absenteeism, and Presenteeism?

To determine the impact of wellness on your company’s productivity, absenteeism, and presenteeism, look for a wellness program provider that incorporates this analysis into their platform. Not all productivity measures are reliable or validated. Ensure your wellness provider uses a credible productivity analysis, such as the World Health Organization Health and Work Performance Questionnaire (HPQ).

The productivity impact of your wellness program is a key measurement of program success. The aggregate impact in reducing health risks and increasing productivity can be determined and analyzed for a year-to-year comparison. This type of analysis is important in demonstrating the value of your investment.

Interested in calculating your organization’s cost of lost productivity? Click here to access an ROI estimate calculator, provided by Well Nation®. Use the calculations to determine estimate productivity costs for your organization based on your number of full time employees, your employees’ average hourly wage, and recent productivity cost research data.

Interested in learning strategies to increase your organization’s productivity and what your potential productivity savings are? Contact Well Nation®, a national wellness provider, for information on how our innovative and state-of-the art wellness platform can help your organization achieve a measurable ROI and VOI.