Measuring the Impact of Wellbeing Programs
Today’s working environment is characterised by constant change. Whether it’s technological advancements, an evolving organisational structure or the emergence of new roles requiring new skills, a high level of adaptability is required from employees. While investing in employee wellbeing is crucial for ensuring sustainable business performance, it’s essential for employers to understand which supports are most effective in reducing the workplace stressors that can result in poor physical and mental health outcomes.
In this article we explore how data and analytics can be used to assess potential factors driving health and wellbeing issues, and the role data can play in assessing the impact of wellbeing interventions, so organisations can determine the value delivered from their investments.
Key Points
- Spending on employee wellbeing is rising, but mental health and burnout remain significant workplace issues
- Work practices that contribute to poor mental and physical health outcomes can prevent wellbeing initiatives from having the desired impact
- Data from multiple sources, including from HR and risk management systems and programs, is useful for informing strategies that optimise value from health and wellbeing investments.
Unpacking the Complex Factors Behind Wellbeing and Performance
According to Aon’s 2023 Global Wellbeing Survey, improvements in employee health and wellbeing can lift business performance by 11% to 55%1. It’s no wonder organisations are investing in wellbeing programs, with global spending having reached $61.2bn annually and projected to grow to $94.6bn in 20262.
Despite rising investment in wellbeing programs, employees continue to struggle with wellbeing issues, including stress and burnout. In Aon’s 2023 Global Wellbeing Survey, participants ranked mental and emotional health as the number one employee wellbeing issue, followed by burnout from prolonged or chronic job stress3. Meanwhile, a study by Stanford University4 found that working practices in many organisations actually detract from employee wellbeing by creating stress.
As Wan Hua Cheng, organisational psychologist and director in Aon’s Assessment Solutions team in Southeast Asia points out, pressures in today’s working environment introduce a complex web of factors impacting wellbeing outcomes. “The primary reason we see wellbeing initiatives fail is because employees are still experiencing a lot of stress at work,” she says.
“Interventions will not succeed if we do not first address the root causes of stress – things like change fatigue, job insecurity and high work demands.”
How Declining Mental and Physical Wellbeing Lead to Higher Healthcare Costs
The Stanford study also estimated that between 5% and 8% of healthcare spending in the US (or $175bn-$280bn) is driven by how companies manage their employees5. Rising healthcare costs and claims among employees can drive up health insurance premiums, adding to the bottom-line for wellbeing spending.
When the incidence of chronic conditions like arthritis and diabetes is high among the workforce, costs for healthcare claims can rapidly add up for an organisation. Equipped with data and analytics from healthcare claims, employers can offer targeted benefits that effectively support both mental and physical health outcomes whilst reducing costs.
Case Study: Setting Goals and Using Data to Improve ROI from Wellbeing Interventions
A recent project undertaken by Aon for a large US multinational client demonstrates the value of sophisticated data and analytics.
Objective
The client wanted to identify the most effective interventions across human capital and wellbeing for driving business performance. By analysing data from their EAP, retirement and healthcare plans, and pay structures, they used Aon’s advanced analytics to determine which interventions had the greatest impact on productivity and to establish a baseline ROI for strategic planning.
Approach
This study brought together 29 different data sources. By applying an integrated analytics model, Aon’s Human Capital team revealed connections between health, health risk factors, wellbeing, performance, total compensation and time away. Our team investigated the correlation and attribution across different clinical and wellbeing programs and initiatives to assess and estimate expected ROI.
Findings
In this case, most drivers of productivity were health related. As demonstrated in Figure 1.0, eliminating one health risk factor, musculoskeletal diseases, for 30% of the workforce resulted in a $1.5 million gain in productivity. This figure does not include the additional $1.3 million saved in healthcare claims.
“This kind of analysis is powerful because it produces a holistic list of focus areas across a client’s human capital and wellbeing portfolios,” says Andy Rallis, health solutions lead and executive director at the Aon Centre for Innovation and Analytics. “We can discover which lever is most sensitive in terms of performance and ROI, and which opportunities the client should focus on next.”
Using data to support strategic objectives for wellbeing
This example highlights two critical elements of a successful workforce wellbeing strategy.
- Be clear on goals at the outset
- Define success metrics, then measure, collate and monitor the relevant data. This can be complex, given the various types and sources of data available.
“Ultimately, every company wants to get to a state where data is integrated into one connected ecosystem that continues to enrich itself,” says Marina Sukhikh, practice leader and head of analytics, Health Solutions in Asia Pacific at Aon.
It is important that each company establishes the foundations for a measurement framework by:
- Benchmarking to compare its wellbeing offer to best-practice across metrics such as culture, communication, performance, strategy and frequency.
- Using claims data to identify health risks among their employee population.
- Conducting a targeted employee wellbeing survey to measure wellbeing and the effectiveness of current interventions.
From gathering complex data to informed insight
By combining foundational workforce health and wellbeing data with other human capital metrics, such as performance, absences and so on, employers can build a more complete data set for decision makers to draw on. Analytics based on this wider range of data can be more effective in pinpointing which wellbeing initiatives are working, where the obstacles lie, and where investment in working practices and health interventions will be most effective for achieving productivity and performance gains.
To learn how to use data and analytics tools and frameworks to inform your wellbeing strategy, contact us.
1Improving Employee Wellbeing Factors Can Enhance Company Performance By At Least 11 Percent, Up To 55 Percent, According To Global Aon Survey, Aon Media Room, 28 February 2023 https://aon.mediaroom.com/2023-02-28-Improving-Employee-Wellbeing-Factors-Can-Enhance-Company-Performance-By-at-Least-11-Percent,-Up-to-55-Percent,-According-to-Global-Aon-Survey
2Work ‘wellness’ programmes don’t make employees happier - but I know what does | André Spicer | The Guardian,hrdconnect.com/2024/05/10/employee-wellbeing-programs-effectiveness/
3Aon’s Global Wellbeing Survey Report 2022-2023, https://www.aon.com/global-wellbeing-survey.asp
4Joel Goh, Jeffrey Pfeffer, Stefanos A. Zenios, The Relationship Between Workplace Stressors and Mortality and Health Costs in the United States, Management Science,13 March 2016 Vol. 62 Issue 2 Pages 608-628, https://www.gsb.stanford.edu/faculty-research/publications/relationship-between-workplace-stressors-mortality-health-costs-united
5Joel Goh, Jeffrey Pfeffer, Stefanos A. Zenios, The Relationship Between Workplace Stressors and Mortality and Health Costs in the United States, Management Science,13 March 2016 Vol. 62 Issue 2 Pages 608-628 https://www.gsb.stanford.edu/faculty-research/publications/relationship-between-workplace-stressors-mortality-health-costs-united
6Physical health of people with mental illness, Australian Institute of Health and Welfare, last updated 24 July 2024, https://www.aihw.gov.au/reports/mental-health/physical-health-of-people-with-mental-illness