As a wellness program vendor, we often find ourselves talking to clients about the positive ROI that activity-based programs can have. Program benefits include reduced absenteeism and presenteeism, fewer hospital visits, and reduction in the number of major medical procedures. This all sounds great and it seems intuitive that all these benefits accrue. But, in order to run a really effective program that transforms your organization, you need to verify your cost savings and justify the expenditures you’re making. You should also make sure that the stated program goals are themselves measurable.

Before you start your program, think about how you plan to measure results and build these measurements into the system from the get-go. Here are a few examples:

Absenteeism:  some companies lump all paid days off together so “sick days” are not tracked separately. A few technology companies even offer employees unlimited paid days off as a way to compete for scarce talent. If you don’t track absenteeism, you’ll need to find a different way to measure unplanned days off due to illness. You may need to resort to indirect reporting methods that rely on employee feedback. Consider correlating year-over-year attendance numbers with the percentage of employees participating regularly in the wellness initiatives. Improvements here should take effect relatively quickly as employees adopt new and healthy lifestyle choices.

Presenteeism:  this is much harder to measure, and it’s probably advisable to avoid spending resources to capture this information. To measure presenteeism, you’ll need to devise productivity metrics that can be applied consistently across departments and job functions. In the end, you’ll likely just have anecdotal information from supervisors. You can catalog this information and keep is as supporting data, but it likely won’t contain hard numbers or facts. If you have a vendor touting the savings you’ll see due to reduced presenteeism, the skeptic in you should kick in – ask how they plan to measure this.

Hospital Visits: coordinate with your plan administrator to track these numbers on an annual basis.  Start now and communicate this number to employees. They need to be invested in the process and understand that lowering costs is critical to the organization’s long-term survival.

Major Medical:  the downside of using these metrics as a way to justify your program is that you won’t see a meaningful effect of your wellness program on major medical expenses for 2-3 years at a minimum. Nonetheless, it’s critical that you start measuring (and communicating) these numbers now.

Chronic Disease: this is where much of the costs are. This is also where prevention programs can have their biggest impact. Work with your plan administrator to monitor the percentage of people at risk for Type II diabetes. To do this, you’ll need to build health risk assessments into your wellness program. You can also begin to tie program goals directly to improvements in measurable health indicators such as blood chemistry. These numbers, as an aggregate, should be top of mind with your wellness team, executive management, and most importantly, with the employees themselves.