With studies suggesting that 90% of companies see a positive return on investment (ROI) from their wellbeing initiatives, there is no denying that they are well worth investing in. But, as a business owner or decision maker, you will want to know what the true impact looks like when implementing a wellbeing strategy.

However, a wellbeing strategy is an ongoing process, so evaluating its impact is not an exact science. Here, we look closer at the actual value of wellbeing programmes from a broader 'return on investment' and 'value on investment' (VOI) perspective. Looking at how ROI and VOI work in synergy gives you a better understanding of the real result of investing in wellbeing. 

The significance of ROI (return on investment)

ROI is historically the primary profitability metric to evaluate how well an investment has performed. But when it comes to continual investments, such as wellbeing initiatives, it's not as effective as it needs to be. Why? Because ROI focuses on short-term tangible effects such as financial ones. Whereas these initiatives are a journey, not a destination. So, whilst they can bring about immediate positive change,  their overall benefit continues. It includes many intangible benefits, such as improved employee mental health, job satisfaction and long-term cultural improvements, which is crucial in this context. This long-term perspective should reassure you about the enduring value of your investment.

That's not to say that ROI is still not very important, as it is. But as a stand-alone metric, it falls short if you want to understand the full benefit of investing in your company's wellbeing.

What is VOI (value on investment)?

Whilst we have already established that VOI views a broader, more qualitative set of benefits, it is helpful to consider the following metrics when assessing the value of an investment.

• Employee engagement

Employee engagement is a key indicator of how connected and committed employees feel to their work and company. Greater engagement leads to increased productivity and less absenteeism. Engagement is best measured through regular employee surveys and tracking their participation in programmes. When a culture of engagement is fostered, it drives sustained performance and loyalty, which promote ongoing success.

• Employee recruitment retention/turnover

A company's retention and turnover rate is a critical metric in assessing the VOI of wellbeing programmes, as it directly influences the organisation's stability and growth. High staff turnover is costly because it leads to increased recruitment and training expenses, as well as loss of valuable knowledge. However, when employees' needs and values are met, a supportive and fulfilling working environment is created, making people more likely to stay. Turnover rates are easy to track and indicate how your employees feel about their workplace.

• Employee health and wellbeing

Employee health and wellbeing are foundational to the success of any organisation. Wellbeing programs that support mental resilience and work/life balance can lead to reduced sick days and less stress. Monitoring absenteeism and how employees utilise available health resources, such as mental health support and fitness programmes, is a good way to measure the impact of these programmes.

• Company culture and morale

A positive work culture emphasising employee wellbeing is essential for fostering innovation and improving job satisfaction. In turn, this not only attracts top-level talent but also ensures that you keep it. You can again measure the impact on culture and morale through regular surveys and feedback sessions, individually and in teams. Employees who feel their wellbeing is prioritised will contribute to the company culture, leading to a more cohesive and resilient organisation.

• Employee satisfaction

A happy employee who is satisfied in their role should be the primary aim of all employers. Because happy employees are more loyal, motivated and productive. In fact, a study carried out by Warwick University showed that happiness can increase productivity by 12%. The benefits of this can be seen in everything they do within their role and how they interact with customers/clients and represent your company.

Combining ROI and VOI for lasting impact

When ROI and VOI are combined, they provide a clearer understanding of the value that wellbeing programmes bring to a company. Because they balance the financial short-term gains of the ROI, like cost savings and productivity, and the long-term VOI ones, such as employee satisfaction, engagement, company morale and retention. This integrated approach offers a significant step forward in measuring the actual outcome of wellbeing programs. These indicators are vital for business owners and decision-makers to understand and make informed decisions when implementing and monitoring wellbeing program initiatives. It ensures they deliver both short-term financial success and long-term resilience, supporting the company's future growth, stability, and ability to thrive in a competitive landscape.

Yellow Tree Wellbeing have a broad range of wellbeing solutions, that can be tailored to meet your company’s specific needs. Contact us to find out more.