Measuring the return on investment (ROI) of your benefits program is important to evaluate its effectiveness and efficiency. There are different ways to measure the ROI of your benefits program, depending on your goals and data sources.
- Define your objectives and metrics. You need to decide what kind of return you want from your benefits program, such as cost savings, increased wellness, improved reputation, or enhanced employee satisfaction, retention, and productivity. You also need to identify the metrics that can help you measure these outcomes, such as turnover rate, absenteeism rate, employee engagement score, customer satisfaction score, or net promoter score.
- Collect and analyze your data. You need to gather the relevant data from your benefits program and compare it with your baseline data or industry benchmarks. You can use various sources of data, such as payroll records, insurance claims, employee surveys, performance reviews, or customer feedback. You can use an equation to calculate your ROI as follows:
Where gain is the value of the outcome you achieved and cost is the amount you spent on your benefits program.
Report and communicate your results. You need to present and share your results with your stakeholders, such as employees, customers, investors, or partners. You can use visual aids like charts, graphs, or tables to illustrate your findings. You can also highlight the benefits that offer the greatest ROI for your business, such as retirement investing, health insurance, or wellness programs