{"id":402,"date":"2022-05-25T08:34:00","date_gmt":"2022-05-25T11:34:00","guid":{"rendered":"https:\/\/wellcastroi.com\/?p=402"},"modified":"2022-06-10T09:17:55","modified_gmt":"2022-06-10T12:17:55","slug":"how-to-quantify-productivity-costs-savings-from-wellbeing-programs","status":"publish","type":"post","link":"https:\/\/wellcastroi.com\/en\/how-to-quantify-productivity-costs-savings-from-wellbeing-programs\/","title":{"rendered":"How to Quantify Productivity Cost Savings from Wellbeing Programs?"},"content":{"rendered":"\n

Let me make a controversial statement: savings in presenteeism and absenteeism from wellbeing programs outshine medical or premium cost savings by a wide margin<\/strong>.<\/p>\n\n\n\n

Additionally, they are also far more predictable and less complicated to calculate than calculating medical or premium cost savings<\/strong>. This conclusion is based on 25 years of calculating the ROI of wellbeing programs.<\/p>\n\n\n\n

We have all read the countless studies of how wellbeing programs save the US economy billions of dollars. However, all of this is quite useless if I cannot quantify productivity gains from an internal program within an employer setting<\/strong>, as decision-makers have tuned out general statistics. Would you base an investment in a new factory by saying it would help America grow?<\/p>\n\n\n\n

Let’s understand how productivity is quantified<\/h2>\n\n\n\n

Before explaining how to calculate productivity savings, let\u00b4s go back to Economics 1.0. Productivity is measured by Output<\/strong>. It is generated when we combine people (who bring skills) with equipment (or even a very positive work environment that multiplies the skills).<\/p>\n\n\n\n

As examples, what would a software developer produce without a computer? And don\u00b4t employees that work as a team produce higher output as compared to employees going in separate directions? We now agree there are two components to productivity<\/strong>. However, many use salary as an indicator of individual productivity without considering the other variable.<\/strong><\/p>\n\n\n\n

They say that the productivity savings of one individual not being absent for one day because of a physical or behavioral condition is equal to one days\u00b4 salary. Why do they forget the other variable?  Answer: they don\u00b4t know how to quantify it<\/strong>.<\/p>\n\n\n\n

How is productivity generally calculated?<\/h3>\n\n\n\n

There are several ways to calculate the true productivity output of an employee in any given employer. One method is to divide the total revenues of your employer<\/strong> (minus the corporate profit margin) by the number of employees<\/strong>. Good luck in trying to obtain the numbers you need from Finance, especially in a large company with subsidiaries.<\/p>\n\n\n\n

And how does WELLCAST do it?<\/p>\n\n\n\n

An alternative approach is by utilizing a database<\/strong> of productivity contributions by industry, region, and occupation adjusted to an individual employer. This database is embedded in our ROI calculation software, WELLCAST ROI.<\/p>\n\n\n\n

For those who really like Economic theory please consult our website, under News & Studies, and select ROI User Guide, for a detailed description of how we calculate productivity contributions and adjust for individual employers: www.wellcastroi.com<\/a>.<\/p>\n\n\n\n

By the way, productivity contributions for a specific type of employee, say a software developer, can be very different depending on the industry they work in. Let\u2019s look at two examples:<\/p>\n\n\n\n