When your father worked at Amalgamated Widgets, Inc. for 45 years, he didn’t receive much more than a paycheck and the occasional pat on the back for a job well done.
But today, Millennials and many members of Generation X need something a little more significant to keep them involved and engaged in the workplace. A pat on the back once in a while isn’t going to keep them content, or encourage them to stay at the same company for decades.
That’s what wellbeing programs are aspiring to change: by incentivizing the improvement of the on- and off-the-clock lives of your team members, they’ll become better, more productive and more engaged employees.
But what does that all mean for employers? And do wellbeing programs create substantial ROI, or just warm fuzzy feelings? Let’s take a closer look.
Defining Productivity and Engagement
“Productivity” and “engagement” are two terms that are used frequently when discussing wellbeing. They’re correlated, but not quite the same.
Productivity has to do with the state of producing something at work—in short, doing your job. And engagement has to do with the emotional involvement your employee has with his or her work.
Each has an impact on your employees at home and at work, and both are important to focus on as you build a powerful, ROI-driven wellbeing program.
A Downward Trend in Workplace Productivity
It’s no secret that business labor productivity and engagement—and, subsequently, employee health—are on the decline. The numbers prove it, too:
- According to a U.S. Bureau of Labor Statistics study, productivity dipped 3.1% the first quarter of 2015, and 2.1% the fourth quarter of 2014.
- According to Gallup’s 2013 “State of the American Workplace” survey, only 30% of employees describe themselves as “engaged” in the workplace, while a further 18% describe themselves as “actively disengaged.”
- Gallup estimates that these actively disengaged employees cost the U.S. $370 billion each year in lost productivity. Worse still, the report says that disengaged employees are “more likely to steal from their companies, negatively influence their coworkers, miss workdays and drive customers away.”
- On average, unhealthy workers cost employers $11,176 per active employee per year.
If your team members aren’t attuned to your company’s mission, they’re not going to be as engaged, healthy or productive as they could be. With employee engagement and productivity in a slump, what can companies do to combat these issues?
When companies focus on the ‘round-the-clock wellness of their employees—incentivizing their wellness, community, social, career and performance goals—they see a dramatic uptick in employee engagement and productivity.
And a great deal of companies know this to be true. There’s a reason why companies listed in Fortune magazine’s “100 Best Companies to Work For” have outperformed their peers in annual stock market growth since 1984.
U.S. businesses are expecting to spend more for incentive and recognition programs in 2016, and the budget for productivity and engagement programs that focus on the whole employee is on the rise. Strong, dynamic companies see the direct link between engaged, healthy employees and factors that impact their bottom line.
If your company is dragging its feet about getting on board with this trend, chances are it’s because putting a fine point on the ROI of employee wellness and wellbeing programs can be difficult. But it’s more than facts and figures—it’s feelings and sentiment that can’t be quantified that creates a strong wellbeing program.
Measuring Wellbeing ROI
Before pulling the trigger on any major business expenditure, your stakeholders will ask one major question that needs to be answered: “What’s in it for us?” And the answer, of course, is ROI.
Employee wellbeing offers a potential ROI of 6:1, and a wide application of wellness programs could prove beneficial for budgets and productivity, as well as health outcomes. For instance, medical costs fall by about $3.27 for every $1 spent on wellness programs, and absenteeism costs fall by $2.74 for every $1 spent.
To best build momentum in programs that impact employee wellbeing—and increase program ROI—companies need to keep the other 16 hours of the day in mind—the time employees aren’t on the clock—and grow the number of programs they offer.
It’s a fact: the more results-driven recognition programs your company offers, the higher the motivation and employee retention rates. According to a recent WorldatWork employee recognition study, the percent of employees who viewed themselves as engaged jumped from 54% (when one recognition program was offered) to 82% (when four were offered). The same survey found a 25% jump in motivation as they increased the number of programs offered.
In other words, the more recognition and engagement programs you have to impact employee wellbeing, the more ROI you receive.
Be Prepared For the Consequences of Growth
The larger your wellness and engagement programs get, the more you get in return—so growth is a great idea. But the larger they get, the more time and effort you put into managing all of them independently.
That’s why it’s more important than ever to take a strategic approach to employee engagement and wellbeing.
Check out our employee experience solution to learn more about how employee engagement impacts your bottom line and benefits everyone in your organization–from executive to employee.