Posted by Midhat Zaman on June 21, 2024
Midhat Zaman

According to Gallup, poor well-being in the workplace costs companies, on average, $20 million in lost opportunity and $322 billion globally in lost productivity due to employee burnout.

Not only are the quantifiable costs of employee well-being distressing for organizational leaders, but employees themselves are frustrated by the lack of it: 89% believe workplaces should provide support, yet more than half say their employer hasn’t acted on it. And 62% have to wait four or more days to see a family doctor — a delay which further affects their well-being and work performance.

On both an organizational and interpersonal level, a holistic well-being program can:

  • Improve job satisfaction
  • Help employees feel supported
  • Better workplace culture
  • Reduce absenteeism
  • Increase productivity

Why is building a business case for employee well-being so hard?

Despite clear evidence showing the importance of employee well-being for organizational success, HR leaders encounter challenges when persuading higher-ups to prioritize it.

Lack of budget: Well-being programs can be costly — 70% of HR professionals face financial constraints when it comes to investing in them. These initiatives may compete with operations, marketing, or tech investments that are thought to impact business success more directly. Plus, many well-being programs have high costs for implementation, onboarding, and ongoing engagement.

Lack of influence: Culturally, most decision-makers prioritize business matters like customer satisfaction, innovation, and finances (99%) over HR issues like recruitment, retention, and engagement, (88%) — despite these issues being closely connected. Lack of influence plays a big part in this. Having various stakeholders, like the C-suite and finance departments, in benefits decisions can weaken one department's ability to advocate effectively.

Lack of supporting evidence: 65% of HR leaders find it challenging to measure the ROI of employee well-being programs. Unlike standard business investments with clear financial returns, measuring the long-term impact of employee well-being programs, like improved productivity and reduced absenteeism, can be tough.

 

Start building your business case

Identify business objectives

Before engaging stakeholders, clearly outline how employee well-being aligns with your company's goals and what you aim to achieve. To do this, think about:

  • Intended outcomes: Consider what specific well-being metrics — like reducing absenteeism rates, increasing employee engagement scores, or lowering healthcare costs — you’ll be focusing on.
  • Audience: Consider the needs and preferences of different employee groups, such as frontline workers, remote employees, or individuals with specific health concerns.
  • Timeline: Consider the expected timeframe for implementing your well-being initiatives and achieving desired outcomes.Lack of supporting evidence:

Once you’ve answered these questions, determine goals that are specific, measurable, achievable, relevant, and time-bound (SMART). Examples of well-being objectives might include:

  • Reduce costs related to mental health leaves of absence by [dollars] within [timeframe] by implementing a stress management program.
  • Boost benefits utilization rates by [percentage] within [timeframe] by adding access to financial counselling, fitness content, and mental health support.
  • Reduce absenteeism by [percentage] within [timeframe] by providing access to personalized mental health care.

Gather data

An essential part of making a business case involves gathering quantitative and qualitative data to back your goals.

These might include:

Quantitative data

  • Employee turnover rates
  • Absenteeism rates
  • Productivity metrics (like task completion rate)
  • Healthcare costs
  • Engagement and satisfaction levels
  • Performance evaluation data

 

Qualitative data

  • Employee feedback
  • Manager observations
  • Workplace culture assessments

Engage in benchmarking

Next, compare your organization's well-being initiatives and outcomes with industry benchmarks and best practices.

When feasible, benchmark employee well-being metrics against peer organizations of similar size, industry, or demographics. This can offer context-specific insights and help validate the need for investing in well-being initiatives relative to competitors.

Then, highlight areas where improvements can be made and demonstrate the potential ROI (like reduced healthcare costs and increased productivity).

Conduct a financial analysis

A cost-benefit analysis lets you estimate the financial impact of implementing well-being programs — specifically focusing on implementation costs and cost savings.

Implementation costs: Take into account the costs linked to launching and running the programs, covering communication, promotion, and initial setup, as well as operational expenses like program administration and maintenance.

Estimate potential cost savings: Consider how improvements in well-being may lead to reductions in healthcare costs, turnover rates, absenteeism, and productivity losses.

Collect case studies and testimonials 

Once you’ve compiled all the data, use storytelling and real-life examples to bring the business case to life. A simple way to do this is by exploring case studies or testimonials from other organizations to help build credibility.

Consider long-term benefits

While short-term benefits, like reduced healthcare costs, are important, it’s equally important to emphasize the long-term benefits of investing in employee well-being.

Employee engagement: Investing in well-being can lead to higher levels of morale, motivation, and loyalty. In fact, employees who feel that their employers care about their well-being are 3x more likely to be engaged at work.

Employee retention: Employees who strongly believe their employer genuinely cares about their well-being are 69% less inclined to actively seek a new job. And employers who create cultures of health see 11% lower turnover.

Employee productivity/absenteeism: When employees feel supported at work, they are 71% less likely to face burnout. This leads to higher productivity and reduced absenteeism caused by stress.

Employer reputation: A positive employer brand boosts morale, and strengthens customer relationships. Plus, it can attract top talent: employees who feel that their employers care about their well-being are 5x more likely to strongly advocate for their company as a place to work.

Align stakeholders

Next, it’s time to engage with key stakeholders, including C-suite executives, finance teams, and department heads, to understand their priorities and concerns.

Tailor your business case to address their specific needs and objectives, emphasizing how employee well-being can contribute to overall business success using gathered evidence.

Establish metrics and collect data

In order to instill confidence in your initiative, outline a plan for measuring and evaluating the impact of well-being initiatives over time. Partner with a health and wellness provider that allows you to track program engagement and utilization, giving you the insights you need to make informed decisions for your workforce.

In the long run, set up key metrics to track progress. This way, you can show the return on investment, which helps keep everyone accountable and promotes continuous improvement. This could include:

  • Absenteeism rates
  • Turnover rates
  • Healthcare costs (e.g., medical claims, insurance premiums)
  • Productivity metrics (e.g., output per employee, sales performance)
  • Employee satisfaction with well-being programs (measured through feedback surveys)

And, be sure to analyze collected data regularly to track progress, identify trends, evaluate the effectiveness of well-being initiatives, and share those key findings with necessary stakeholders.



Does Dialogue check all your boxes? 

A strong business case can help you present employee well-being investments to key decision-makers within your organization — and find the right well-being provider for your team.

With Dialogue, your organization can seamlessly integrate high-touch well-being programs designed to support employee mental and physical health holistically while reducing costs — making the business case for employee well-being simpler and more effective than ever.

Discover Dialogue's Integrated Health Platform and why you should include it in your business case.

 

Learn more

 

Topics: For Organizations

About the author

Midhat Zaman is a content strategist, marketer, and avid writer at Dialogue. She is deeply committed to helping HR leaders and employees effectively navigate workplace challenges. Midhat puts her love for great content to work with health and wellness in mind. Through insightful articles, comprehensive guides, and more, she aims to empower Canadians with the right support to improve their well-being.