The ROI of Employee Benefits: Investing in Your Team’s Well-Being
Paying employee benefits seems like a guaranteed money drain, but did you know you can receive some returns from your contributions? It’s a little-known fact, but there are measurable employee benefits ROI.
Sure, you won’t get your hard cash back from the insurance company, but you can work out the returns if you took the time to figure it out. This article examines the best employee benefits ROI.
1. Financial Wellness Programs
These are a surefire way to realize some solid returns on your investment. Enrich Financial Wellness Co. even states that investing in financial wellness programs has better employee benefits ROI than an employee match.
An Enrich proposal estimates that financial wellness programs can provide employers with a 15:1 (1,500%) ROI.
2. Employee Training and Development Programs
Dr. Laurie Bassie, in her book The Good Company, championed employee training and development.
She noted that the best way to predict the ability of a company to beat the stock market and direct rivals was to evaluate the amount of money it spent training staff.
Companies that invested heavily in training achieved ROIs between 300-600%. The enhanced skills and knowledge are a catalyst for innovation, boosting productivity, and fueling revenue growth.
Tuition reimbursement programs encourage employees to pursue further education, which can bring added value to companies. A Cigna study found that its plan returned a 129% ROI in talent management cost savings.
3. Health Insurance
Health insurance works great at drawing potential workers to your company. It also offers promising returns, with an Avalere Health study showing employers stand to gain 47% ROI on average.
That translates to $1.47 back for every $1 spent, with the company expecting the ROI to climb to 52% by 2026. Companies that spend more should expect higher ROI from their employer-sponsored program.
4. Flexible Work Schedules and Time Off
Although the research is scant, a Timewise working pilot revealed employers would likely realize that the benefits outweigh the costs of launching flexible work schedules within three years.
In the study, Timewise noted flexible working programs reduced sickness absence by 16% in retail businesses with 200 staff. The programs also reduced staff turnover by 5-39%.
5. Health Wellness Programs
Since 72% of organizations offering wellness programs realized reduced healthcare costs and a 14-19% reduced absenteeism, a Harvard research estimated the health wellness employee benefits ROI at $3.27 for every dollar spent and saves $2.73 in absentee day costs for every $1 spent.
6. Work-life Balance
Although hard to pin down, a healthy work-life balance can positively impact productivity and efficiency and reduce sick leave. Workers are often happier and healthier when employers institute favorable work-life balance.
A study on ABC Hotel Co. found that for every dollar spent on work-life balance, the hotel received $1.536 ROI (53.6%)
7. Mental Health Benefits
Employers can supplement healthcare benefits by offering mental health benefits, which can improve employee engagement and leave them healthier. A Deloitte research found mental health benefits can bear returns between 162-218%.
Employee Benefits ROI: Final Word
Offering incentives such as flexible time off, health insurance, and financial wellness programs often bear measurable employee benefits ROI.
As the US Chamber of Commerce found, businesses that spend more on employee benefits often achieve more significant ROI.