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How to Prove Your ROI on Employee Benefits Spending


Internal pushback can take the wind right out of an HR leader's sails.

You can know down to your very core, that your benefits tangibly improve employee productivity — and you will still be hard pressed to prove it. Even at the largest companies, connecting individual outcomes to the company's bottom line is an incredibly challenging task. Here are some tips to help you out.

Get employee buy-in first

If your employees aren’t using the benefits on offer, the ROI question is moot. You're definitely wasting money.

From the beginning, it's important to emphasise long-term participation rates, beyond open enrolment, by maintaining a dialogue with staff throughout the year. Align your communication strategy with the natural workflow of each department to make it easy. For example, if your office has a combination of manufacturing and knowledge workers, use posters on the manufacturing floor plus an eye-catching email to distribute to the office teams.

Always make sure you keep the communication clear and value-driven. No one likes reading a massive benefits handbook packed with policy jargon.

Know what's valued internally

Research on the hard returns of employee benefits is filled with both good and bad news. For example, one study found that companies that invested in workforce health enjoyed 235% stock appreciation, compared to just 159% for companies with no wellness investment. But great ROI can take time. According to another study by RAND Corporation, it can take up to five years to break even on health benefits.

Things get even more complicated when HR leaders are asked to quantify intangible outcomes, such as company culture or talent recruitment. Before you spend days compiling your report, be clear on what ROI means in your organisation. Join forces with finance, marketing and other departments to determine which objectives are on the top of their list and brainstorm ways to connect those outcomes to your employee benefits.

When you rally support early on, internal stakeholders will be more likely to have your back later on down the road.

Choose your metrics

Though many companies report huge cost savings on employee benefits, it's usually quite difficult to replicate studies at another location within the business, let alone take the necessary steps to have findings peer reviewed.

And even then, factors such as the cost of the benefit, changes in the organisation, economy, workforce demographics and job market can significantly alter your ROI from year to year.

Once you know which objectives are top priority internally, you can quickly prepare an effective value case by simply comparing trends in your data, using past data or the national average as your benchmark.

Here are some metrics to help you make your case:

  • Original spend
  • Participation numbers
  • Employee comments and feedback
  • Healthcare costs
  • Lifestyle behaviour (number of employees who quit smoking or reduce their cholesterol)
  • Absenteeism and presenteeism

While you might not be able to prove your benefits are the sole reason retention rates are up, with a little internal collaboration and the right data points, you can make it easy to see how everyone wins when employees love their benefits.

When you sign up to Babylon, you’ll have access to your very own customer success manager to help you roll out the benefit to your employees effectively.

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The information provided is for educational purposes only and is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Seek the advice of a doctor with any questions you may have regarding a medical condition. Never delay seeking or disregard professional medical advice because of something you have read here.