The ROI of Healthier Employees
The Cost of Ignoring Employee Wellbeing: A Hidden Crisis
Failing to invest in employee wellbeing is not just an issue of morale – it’s a bottom-line crisis.
Companies that ignore these critical issues face reduced productivity, higher absenteeism, increased turnover, and inflated healthcare costs. The numbers are staggering, and ignoring this crisis comes with a heavy financial burden.
Health & Productivity
41% Stressed Out
85% Physically Inactive
24% Productivity Drop
$530 Billion Annual Loss
Engagement
77% Disengaged
43% Higher Turnover Due to Disengagement
$8.9 Trillion Annual Loss
Retention
51% Think to Quit
30% Leave Due to Lack of Health and Wellbeing Support
50-75% Annual Salary Replacement Costs
Why Investment Matters
With these statistics in mind, it’s clear that investing in employee wellbeing is no longer a “nice to have” – it’s a business imperative. Companies must adopt proactive strategies to protect their employees and profitability. Companies that invest in comprehensive wellbeing programs see tangible results in performance, retention, and financial outcomes.
1. Boost in Employee Engagement
Engaged employees are not only more productive, but they are also less likely to leave, more motivated, and generally perform better. By prioritizing holistic employee wellbeing, we directly address the key drivers of engagement: physical, mental, social, and financial wellbeing.
Impact:
• 92% of companies report significant improvements in employee engagement after implementing strategic wellbeing programs.
• Companies with highly engaged employees experience 21% higher profitability and 17% higher productivity.
ROI:
• For every $1 invested in employee engagement and wellbeing, businesses see a $4 to $6 increase in productivity due to higher morale, collaboration, and innovation.
2. Productivity Gains
Employees who are stressed, disengaged, or lacking support are more likely to experience productivity drops. Wellbeing programs that promote mental health, reduce stress, and encourage a positive work environment lead to higher performance and fewer productivity losses.
Impact:
• 47% of employees experience stress that negatively impacts their work, leading to an estimated 24% drop in productivity.
• Companies that address employee stress and inactivity see productivity improve by 10-15%, resulting in reduced absenteeism and presenteeism.
ROI:
- Improved productivity results in tangible gains, with every $1 spent on wellness programs leading to a $2.30 return through reduced absenteeism and improved employee output.
3. Reduction in Employee Turnover
High turnover rates are costly, not just in terms of recruitment but also the loss of institutional knowledge and the impact on morale. Addressing wellbeing holistically helps employees feel supported, reducing their desire to leave and increasing their sense of loyalty to the company.
Impact:
- 38% of employees are actively considering quitting due to the lack of health and wellbeing support.
- Wellbeing programs that address physical and mental health can reduce turnover by 10-25%, saving companies substantial amounts in hiring and training costs.
ROI:
- The cost of replacing an employee is typically 50-75% of their annual salary. With a targeted wellbeing strategy, businesses can save hundreds of thousands of dollars annually by improving retention rates and keeping experienced employees engaged.
4. Reduced Absenteeism & Presenteeism
Absenteeism, where employees miss work due to illness or burnout, and presenteeism, where they are physically present but mentally disengaged, are major productivity killers. Our wellbeing solutions tackle the root causes of these issues, such as work-related stress, physical inactivity, and other wellbeing-related concerns.
Impact:
- Implementing comprehensive wellbeing programs can reduce absenteeism by 25% and presenteeism by 30%, keeping employees healthier and more focused.
- Companies that prioritize wellbeing experience lower healthcare costs, as employees are less likely to suffer from chronic conditions or burnout-related issues.
ROI:
- Every $1 invested in employee wellness can result in a $3.27 return through reduced healthcare costs and a $2.73 return due to lower absenteeism.
5. Enhanced Employer Brand and Talent Attraction
In a competitive talent market, organizations that prioritize employee wellbeing stand out as employers of choice. Our programs not only help retain current employees but also position your company as a highly desirable place to work for top-tier talent.
Impact:
- Companies with strong wellbeing programs report up to 50% lower turnover rates, helping them maintain a stable, experienced workforce.
- Organizations that invest in wellbeing are able to attract high-performing talent who seek supportive and positive work environments, reducing hiring costs.
ROI:
- Reducing recruitment costs and maintaining a loyal workforce can lead to significant savings. Every 1% reduction in turnover translates into substantial reductions in hiring and onboarding expenses.
How We Measure Success:
VOI (Value on Investment)
While ROI is a critical metric, it doesn’t capture the full picture of the value a wellbeing strategy can bring. We also track Value on Investment (VOI) — a broader measure that accounts for the less quantifiable, but equally important, benefits such as improved company culture, stronger leadership, and better team collaboration.
Some of the VOI Metrics We Track:
Employee Satisfaction:
Surveys and feedback tools to track changes in employee satisfaction and engagement over time.
Innovation & Collaboration:
Wellbeing leads to a more innovative and collaborative work environment. We track improvements in these areas through internal performance metrics.
By providing both ROI and VOI analysis, we offer a comprehensive understanding of how our wellbeing programs are transforming not just individual performance but the overall organizational ecosystem.
What’s the difference we can make?
Find it out now!
PERMA+4 Wellness ROI Calculator
Example, enter your own.
Example based on $50,000 annual revenue per employee.
Example based on our offer.
Example based on 2021 KFF Employer Health Benefits Survey.
Based on scientific studies (Goetzel et al. (2008), RAND Corporation (2014)).
Based on RAND Corporation (2014) research.
2013 research by Aon Hewitt estimates that a 5% increase in engagement leads to a 3% increase in future revenue.
Example based on 2017 Predictive Index estimates.
Example based on 2016 SHRM Survey.
Supported by SHRM (2020) estimates of 3-10% reduction in turnover.
Calculation Breakdown:
Healthcare Savings: $0
Formula: (Healthcare Savings % / 100) × Annual Healthcare Cost × Number of Employees
Absenteeism Savings: $0
Formula: Absenteeism Reduction Days × (Revenue per Employee / 240 (Avg. Working Days)) × Number of Employees
Engagement Savings: $0
Formula: (Engagement Gain % / 100) × Revenue per Employee × Number of Employees
Turnover Savings: $0
Formula: (Turnover Rate % / 100) × Turnover Cost × (Retention Savings % / 100) × Number of Employees
Total Program Cost: $0
Formula: Wellness Initiative Cost per Employee × Number of Employees
ROI Result: 0%
ROI Formula: ((Total Savings - Total Program Cost) / Total Program Cost) × 100
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