Preventative health benefits are in demand, but proving their return on investment remains a challenge for HR. Michelle Stevens explores how employers can measure impact and make a compelling case for investment.
Health and wellbeing has arguably never been more at the forefront of employee minds, at a time of increased cost of living pressure, alongside record-breaking NHS waiting lists and an under-fire health and social care system in the UK.
Employer-provided health MOTs have been rated as the most valuable health benefit in a survey conducted by Bluecrest Wellness, cited by 70 percent of the 2,000 people who were canvassed in March 2024. “Peace of mind” topped the list as the main benefit of a health assessment, specified by 61 percent of respondents, closely followed by “identifying health risks early” at 60 percent. Cancer risk and heart health were the joint top areas of interest for 70 percent of those surveyed.
But with the return on investment (ROI) of preventative healthcare initiatives notoriously difficult to measure for employers, and with competing demands from across the business for a slice of the budget pie, how can HR teams secure leadership buy-in to offering this type of employee benefit?
The benefits of preventative healthcare
While the provision of health assessments is a desirable employee benefit for many staff – and potential new recruits – having a healthy workforce is also advantageous from an employer point of view.
In the UK, average absence rates per employee rose from 5.8 days per year prior to the pandemic in 2019, to 7.8 days per year after the pandemic in 2023, according to the CIPD.
“This significant increase reflects both a worsening of the nation’s workforce health as well as a direct hit to the productivity and profitability of UK employers,” points out Steve Herbert, brand ambassador at Occupational Health Assessment. “It follows that it is very much in the employer’s interests to take steps to prevent incidence of workforce ill health.”
He adds that “the role of prevention is often overlooked” in efforts to contain potentially large annual increases to private healthcare costs, and that “getting upstream of potential healthcare issues should be the key priority when it comes to supporting health and wellbeing”.
This is a sentiment echoed by June Dawson, managing director and co-founder at analytics company Fruitful Insights. “Preventing ill-health at work is essential for maintaining productivity, engagement and morale,” she says. “Poor physical or mental health increases employee absenteeism, presenteeism and turnover, placing additional strain on teams and managers. A proactive approach reduces these risks, fostering a more resilient and efficient workforce.”
Data challenges
Some costs of employee ill-health are more tangible and easier to quantify than others, such as a reduction in billable hours due to staff absenteeism, the cost of covering an employee on long-term sick leave, or an increase in private healthcare premiums due to escalating staff claims for new medical conditions.
But measuring the ROI and outcomes of preventative health assessments themselves remains a challenge.
“Tracking the data through health assessments to private medical insurance and risk has been the eternal challenge of our industry,” explains Jeff Fox, the strategic consulting lead at independent insurance brokerage Lockton.
“Data sharing is always a barrier and identifying individuals as they interact with each benefit is not easy, so there can be limited understanding of the interventions following a screen. Health assessment providers don’t measure ‘diagnoses’, they measure referrals, but then companies do not have insight on what happens next. Tracking the data is vital to following the golden thread from action to outcome.”
With the ROI of preventative health and wellbeing initiatives sometimes only crystallising in the longer term, the financial benefits may not be immediately obvious for an organisation.
“Essentially, you are investing for something ‘not to happen’, which can get lost as time passes by and other more immediate business priorities arise,” continues Fox. “Businesses can easily experience policy amnesia with initiatives beyond the current financial year being forgotten, replaced or discarded.”
“It is worth remembering that employee wellbeing activities take time to embed before a business can see a true return on investment,” adds Alison Bromley, head of partnerships at mental health specialists Onebright.
“This can be frustrating for organisations who may have made a significant investment and are yet to reap the rewards. Data can help you begin to track the changes, even if these are small to start with.”
Dawson agrees that ROI measurement is difficult, because issues relating to wellbeing develop over time while the costs of implementing health initiatives are immediate. Improvements in wellbeing and productivity can be harder to quantify financially, she says, while employee turnover can also limit the realisation of long-term gains.
“To avoid common pitfalls, organisations should set realistic expectations, recognising that results may take more than one year to materialise,” Dawson notes. “Relying solely on absenteeism or claims data is insufficient – broader indicators like mental wellbeing and workplace engagement should also be tracked.”
Making the business case
If senior leaders are hesitant to invest in preventive health measures due to difficulties calculating the ROI, Bromley suggests piloting new schemes on a smaller scale. Data can then be collated and assessed to see if an initiative is having a positive impact on employee wellbeing and overall engagement, thereby demonstrating to management that a concept will succeed or fail before a larger investment is made.
“For organisations that invest in supporting their people’s mental health, the return on investment is anything between £5 and £11 for every £1 spent,” states Bromley. “These figures come from a combination of increased productivity, performance and collaboration, and reduced presenteeism, absenteeism and staff turnover.”
Dawson cites the example of Johnson & Johnson, whose leaders estimate that their wellness programmes have cumulatively saved the company $250 million on healthcare costs over the past decade.
Dawson’s company Fruitful Insights has also recently worked with Equipsme Health Insurance to develop a ROI model for health insurance. Researchers examined data including sickness absence rates, workforce job levels and NHS and private healthcare waiting times, to calculate a ROI for the impact of health insurance on employee productivity and business costs. Dawson says the study found that employees with access to private medical benefits reported 2.5 fewer absence days.
Financial metrics which quantify the impact of impaired wellbeing on business performance are crucial reading for senior leaders, Dawson adds, with absenteeism, healthcare claims, attrition, productivity and employee engagement all important rates for HR to track.
“HR can collect this data through absence records, benefits utilisation, employee surveys and performance analytics,” she advises. “Presenting insights in a clear, business-focused manner – linking wellbeing investments to financial and operational outcomes – helps secure leadership buy-in.”
Jane Hulme, UK HR director at employee benefits provider Unum, agrees that proving the ROI on preventative healthcare is not always straightforward. “But, by monitoring key measurable data on absences and return-to-work rates, alongside anonymised data collated from platforms like health and wellbeing apps and employee assistance programmes, HR managers can measure impact effectively,” she says.
Unum launched a preventative healthcare service for its own employees in April 2023, and as of February this year it has facilitated over 6,700 nutritionist appointments, as well as more than 4,700 personal training sessions and nearly 4,400 meetings with lifestyle coaches.
Hulme says that “employee engagement is key to our success” and for the last two years Unum’s engagement score has held at 85 percent, ranking in the global top 10 percent. The company also took third spot in the UK’s Great Place to Work ranking for large employers this year.
“By drawing on key metrics, HR teams can secure leadership buy-in by demonstrating the business case,” Hulme concludes. “A healthier workforce is more productive, more present and more engaged. In a competitive talent market, employers who prioritise prevention send a powerful message: employee health is not just a benefit, it is a business priority.”
