How to measure ROI from an employee benefits programme
If you have read the headline to this piece and assumed that ROI means return on investment, as it normally would, it’s time to pause for a moment. As we will see later, this is certainly one of the measures that can be used to assess the effectiveness of an employee benefits programme, but not the only one. Some experienced business people have gone as far as to propose that it’s not the most effective. ROI can also stand for return on individual, and this is where it’s often easier to see each person’s responses, if not always measurable returns. So, now we have a third possible
meaning for what was previously the universally-understood ROI – responses of individuals. Business can be confusing sometimes!
What tangible results are business looking for from an employee benefits programme?
Therefore, from our introduction, it becomes clear that a series of different measures, some more observational than numeric, can all be used to judge the level of success provided through the use of such a programme. In traditional return on investment thinking, for example, the use of an effective healthcare programme may be shown, over time, to achieve a measured reduction in staff absences for illness.
Of course, the costs of a full medical insurance protection provision is becoming increasingly prohibitive. Thankfully, there are some viable and proven alternatives. Either employer-funded or employee-paid healthcare benefits plans, helping to meet the key costs of different situations, therapies or treatments, are increasingly recognised as an eminently workable method of such provision. Not-for-profit companies, such as Paycare, based in the Midlands and with a head office in George Street, Wolverhampton, have been offering help on this basis for over a hundred and forty years.
This is just one key area that helps to provide measurable responses. Apart from reduced absences, it is repeatedly shown that companies recognised for the standard of their employee benefits packages enjoy a lower rate of voluntary staff turnover. In many fields of business and industry at this time, this becomes an increasingly-important factor. Businesses have recently been citing difficulties in finding suitable candidates to fill vacancies where specific skill sets are required across a range of different manufacturing, industrial, care and other workplaces. The return on investment of simply holding on to talented and skilful individuals is now a marker of note.
What other measures are worth taking into account when assessing the worth of an employee benefits programme?
Here’s an entirely different way of looking at job satisfaction. If you were to ask each member of your company team this question: “In terms of how you are treated, would you recommend working here to your best friend?” what might their (honest rather than political) answers be? Such responses might be gleaned, even collated, on a more traditional basis, from employee surveys. Interestingly, these are still occasionally called Employee Satisfaction Surveys which does tend to give a clue to the kind of responses that may be encouraged.
However, positive answers would have to stray far beyond the simple area of pay. The other responses would, in some way, be closer to describing the effectiveness of your employee benefits programme – and, of course, company ethos and attitudes. They might cover areas that help eliminate work-inhibiting anxieties such as healthcare and pension provision. Added to this will be those that encourage and aid performance like bonuses, training and development and career progression opportunities. Consideration could then be given to more feel-good areas, like any social activities, bonding opportunities, chances for creativity, and the like. In the widest sense, employee benefits are simply anything that an employee feels benefits them!!
Reaching a workable judgement
From all that has been said, it’s plain that traditional ROI calculators on their own simply can’t do full justice to the positives gained from a well-judged employee benefits programme. Taking a wider view in any analysis tends to provide businesses with an increased appreciation of what benefits mean, and how they can best be provided, in their specific workplace environment.