Workplace wellness may be a popular topic in the benefits space, but there is a lack of research clearly assessing the return on investment (ROI) of wellness programs. That was the message Dr. Michael Rouse, director of the health sector M.B.A. with the Richard Ivey School of Business, gave at a Sun Life Financial Wellness Institute breakfast yesterday in Toronto.
In the session, Rouse provided an overview of new research currently under way by Sun Life Financial and the Ivey School, which, he says, will be the first of its kind in the industry.
“The study, modelled from Sun Life Financial’s Healthy Returns Program, will measure the impact on employee wellness, productivity and two-year healthcare costs, and take an in-depth look at what benefits employers can obtain by offering wellness programs to their employees,” explained Lori Casselman, assistant vice-president, health and wellness at Sun Life Financial.
Rouse said that while employers have a general understanding of the connection between healthy workers and productivity and engagement, it is evidence of a clear ROI that is the driving force behind their implementation of wellness programs. And with employers increasingly focused on managing rising healthcare costs, the time is ripe for them to explore the connection between the quality of employee health and the business’ competitive advantage.
“Human capital is the most important resource,” said Rouse. “We better protect that resource, better invest in that resource.”
The problem isn’t a lack of research—in fact, there’s plenty of research out there investigating absenteeism, productivity and engagement among employers that offer wellness programs. “There are hundreds and hundreds of these reports,” said Rouse. Rather, the issue is that the majority of these reports are flawed in some way, making them difficult to apply on a wider scale, he explained.
“Little rigorous examination of workplace wellness has taken place in Canada and outside of the U.S.,” said Rouse. “Even in the U.S. (where the bulk of studies have taken place), there are few studies that are comparable and have sufficient data and analytical rigour to create a business case.”
Rouse pointed to a 2010 meta-analysis by Harvard University that assessed more than 100 U.S. workplace wellness studies. A meta-analysis takes the results of several studies and pools them. Studies are then filtered based on methodology criteria set out by the research team, in order to ensure that only the purest, most comprehensive studies are included.
In Harvard’s research, only nine studies met the criteria set out by the research team. But from those remaining studies, the Harvard team concluded that wellness initiatives save an employer an average of $394 per employee per year, while the programs only cost an average of $159 per employee per year—creating an ROI of $3.36 for every $1 spent.
The Ivey School then carried out its own meta-analysis, assessing 504 studies. From its research, only four studies met all the criteria that the team had identified. Of those, the researchers found that wellness programs reduced absence levels, on average, by 1.5 days. Given that employees take an average of 4.7 to 11.2 days off per year (according to Statistics Canada), a reduction of 1.5 days means a reduction in absenteeism of 14% to 36%.
“The bottom line is, there are substantial savings for employers,” said Rouse.
Rouse explained that the research to be carried out by the Ivey School and Sun Life will be the first of its kind in terms of rigour and strict controls, will be Canada-wide and will examine wellness programs across multiple industries. The result of this research, they hope, will enable employers to have clear evidence of the ROI they can achieve by offering wellness programs to employees.
“Employers want to do the right thing, but they need to make a business case,” said Rouse.