Measuring ROI on Employee Health Benefits
Employee health benefits generate measurable return on investment through reduced absenteeism, lower staff turnover, and improved productivity. Research from Deloitte shows that every £1 invested in workplace wellbeing returns an average of £4.70 in reduced absence costs and presenteeism alone.
Health cash plans offer one of the most cost effective routes to demonstrable ROI (return on investment), providing everyday healthcare support that employees actually use, making the financial case straightforward for HR and finance teams to present at board level.
Let us start with a thought that keeps CFOs up at night. You are spending money every month on employee health benefits, and someone in the next budget meeting is going to ask what it is actually doing. Not in a warm, strategic sense. In a cold, hard numbers sense with a spreadsheet.
The good news is that measuring the return on investment from employee health benefits is entirely possible. The better news is that the numbers tend to be compelling. The even better news is that this article is going to help you make the argument with evidence, without jargon, and with just enough dry humour to survive the Q4 planning cycle.
What Does ROI Actually Mean in the Context of Health Benefits?
Return on investment in employee health is not just about comparing what you spend on a benefit to what you get back. It is about understanding the full cost of doing nothing and that cost is often invisible until it becomes very visible.
Absenteeism, presenteeism (being physically at work but not really there), staff turnover, and recruitment costs are all directly influenced by employee health. When employees cannot access timely healthcare, or delay it because of cost, then small issues become bigger ones. And bigger health issues mean longer absences, more disruption, and, eventually, someone having to post a job advert.
£4.70 returned for every £1 invested in workplace wellbeing – Deloitte, 2023
7.8 days average sick days per employee per year, the highest rate in over a decade – CIPD Health & Wellbeing at Work, 2023
£30,614 average cost of replacing a mid-level employee, including lost output and onboarding – Oxford Economics / Unum
These are not abstract figures. They represent real budget lines that HR and finance directors see every year, and they are largely preventable costs.
What If You Need Measurable Outcomes?
This is the right question. Wellbeing initiatives have historically struggled to prove their value because the outcomes were soft, such as engagement scores, satisfaction surveys, a nice mention in the staff newsletter. Finance teams are not unsympathetic to wellbeing, they simply need something they can put in a model.
The change comes when you start measuring specific, trackable metrics, such as:
- reduction in average sick days per employee, year on year
- change in voluntary staff turnover before and after benefit introduction
- uptake rates on the benefit itself (high usage = high perceived value)
- reduction in time to treatment for common health concerns
- employee benefit satisfaction scores from annual surveys
A health cash plan is particularly well suited to this kind of measurement because it is transactional by nature. Employees claim for dental check ups, optical appointments, physiotherapy, and counselling. Employers can see usage data. That usage data tells a story, which can be employees are maintaining their health proactively, not reactively. And proactive health management is what can reduce absence.
How Do You Calculate ROI On Employee Health Benefits?
Start with your baseline, the current absence rate, average sick days, and recruitment costs for any roles lost to poor health or burnout. Introduce the cost of the benefit. Then track changes against those baselines over 12 months.
Here’s a simple formula (Value of reduction in absence costs + Value of reduced turnover) ÷ Cost of benefit = ROI. For most organisations, the ratio is positive within the first year.
Making The Business Case
If you are presenting this to a CFO or finance committee, resist the temptation to lead with empathy. Lead with cost. The empathy can come later and it will land better once the numbers have done their job.
This may help if you say here is:
- what we currently spend on absence related disruption
- what we spend on recruitment when health related attrition occurs
- what a health cash plan costs per employee per month (typically from £7)
- the reduction in those costs we can reasonably project, based on industry benchmarks
- the timeline to positive ROI
What makes a health cash plan particularly finance friendly is its predictability. Unlike private medical insurance, which can involve variable premiums, underwriting, and exclusions, a cash plan is a fixed cost. You know exactly what you are paying. Finance teams tend to appreciate that enormously. Predictability is, in budget terms, a superpower.
Why Usage Rates Matter More Than You Think
One of the reasons employee benefits fail to demonstrate ROI is that employees do not use them. A gym subsidy that three people claim. A cycle to work scheme that lapsed in February. These benefits may look good on a recruitment advert but they are difficult to defend at a budget review.
A health cash plan is different because it supports things employees actually need, such as dental care, eye test and glasses, physiotherapy, counselling and some include hospital in patients and outpatients cover. These are not aspirational benefits, they are practical ones. And because employees interact with the benefit regularly, not just when something goes seriously wrong they are far more likely to use it, value it, and mention it when someone asks why they stay.
High usage is itself an ROI signal. It means the benefit is embedded in employee behaviour, not sitting dormant in a welcome pack. Contact Conan your dedicated business development executive.
What Is The Best Way To Demonstrate Employee Benefit Value To A Board?
Present a before and after comparison using your own data where possible, supplemented by sector benchmarks. Focus on three metrics:
- absence rate,
- turnover rate, and
- benefit uptake.
If you can show that your benefit is actively used and correlates with lower absence, the case is already made. If you are in the early stages, use published ROI data from independent bodies such as Deloitte or the CIPD to underpin your projections.
The hidden cost nobody talks about presenteeism
Absenteeism gets all the attention. Presenteeism is working while unwell, mentally checked out, or in physical discomfort, which is the larger problem and the harder one to see. Deloitte research identifies presenteeism as the single largest cost driver of poor employee health to UK employers, accounting for around £24 billion annually, significantly outweighing the cost of outright absence.
Health benefits that support everyday wellbeing, including mental health support through counselling benefits, like we offer at WHA Healthcare address presenteeism directly. When employees can access care quickly and affordably, they can recover faster and return to full productivity sooner. That is an ROI story worth telling.
What A Health Cash Plan Covers, And Why It Matters For ROI
The breadth of a cash plan is relevant to its return. A plan that covers dental care, optical appointments, physiotherapy, specialist consultations, counselling, and hospital stays supports health across the spectrum, from the minor inconveniences that cause most short term absence to the more significant concerns that affect longer term performance.
At WHA Healthcare, plans start from £7 per employee per month, with our WHA Healthcare Direct Scheme. At that price point, the arithmetic is not complicated. The CIPD reports average absence at 7.8 days per employee per year, which is the highest in over a decade. If a health cash plan reduces that by even one day per person, the saving in lost productivity and cover costs far outweighs the cost of the plan itself.
Frequently Asked Questions
How do I measure the ROI of a health cash plan specifically?
Track absence rates, staff turnover, and benefit uptake before and after implementation. Compare absence related costs (cover, lost productivity, HR time) against the monthly cost of the plan. Most organisations see measurable improvement within 12 months.
Is a health cash plan tax-efficient for businesses?
A health cash plan provided by an employer is generally treated as a benefit in kind for HMRC purposes. However, at modest cost levels, the tax exposure is low and the employer’s National Insurance treatment can be built into the business case. Always confirm specifics with your finance or payroll team.
What is the difference between ROI and VOI in employee wellbeing?
ROI (return on investment) focuses on financial metrics such as cost of absence, turnover, productivity. VOI (value on investment) encompasses broader outcomes such as employee engagement, culture, and employer brand. For board level discussions, lead with ROI and use VOI to strengthen the argument.
WHA Healthcare has been providing simple, affordable healthcare cash plans to businesses and individuals since 1948. Plans start from £7 per employee per month, with no hidden complexity and claims typically settled within 48 hours. Join today!
