What is one way to measure the ROI of the benefits your business offers employees?
To help you evaluate the ROI of your business benefits, we asked HR professionals and business leaders this question for their insights. From accounting for different data points to calculating the cost of turnover, there are several ways to measure the ROI of an organization’s benefits.
Here are 13 ways to track the ROI of your company benefits:
- Account for Different Data Points
- Know What Your Employees Value
- Track Team Engagement
- Determine the Number of Days Worked
- Define Measurable Payback
- Calculate the Cost of Turnover
- Speak Directly With Employees
- Check for Growth-Oriented Work
- Measure the Company’s Pulse With Surveys
- Increase Productivity Using a Holistic Lens
- Observe Employee Turnover
- Promote an Internal NPS Initiative
- Find Correlations With Benefits Changes
Account for Different Data Points
Measurement of the impact of employee benefits needs to account for different data points spread across functions and processes. By dividing them into two categories, employee-centric and business-centric measures, businesses can better understand the real ROI of what they are investing in with benefits.
So, while employee data points will include turnover, engagement, and satisfaction, business metrics will be the number of working days, product efficiency and output, revenue growth, and other related measures.
Sustained growth in both these categories of data means that the intended intervention is working as expected. The impact of specific policies and benefits can also be measured and analyzed using the same method.
Joe Flanagan, VelvetJobs
Know What Your Employees Value
One way to measure the ROI on the benefits that your business offers employees is by asking employees directly. We do our best to survey our employees about what they value and what they’d like to add so we have a strong sense of what we should provide.
Darren Litt, MarketerHire
Track Team Engagement
Engagement is a direct result of a compensatory and incentivizing benefits package. We find that offering unlimited PTO brings in quality effort from employees when they are no longer obligated to work when and if it conflicts with personal issues that should, in fact, take precedence.
If an employee has an unlimited amount of time off, they will no longer feel pressured to build their life around work, but rather, their work around their life. Adding a hybrid work model to the equation affords our employees more convenience and the ability to be flexible with their daily routine.
Lastly, when employees take time off and are also encouraged to do so, they are more present at work and perform at a greater capacity, engaging more with team members and adding creativity instead of a “burnt-out” mindset.
Nick Shackelford, Structured Agency
Determine the Number of Days Worked
A great way to measure the ROI of the benefits your business provides employees is to measure the number of days worked. This works well for measuring the ROI of any changes in your company’s healthcare plan.
Companies with weak healthcare plans or who encourage employees to avoid taking sick days may affect employees’ attendance or vacation day usage.
Justin Chan, June Shine
Define Measurable Payback
Think about employees’ benefits like gym memberships, language courses, or health insurance. How do you determine how much you will save with them if they are unmeasurable?
Well, the biggest issue in ROI measurement of the employees’ perks is how to count payback, and the solution is to find measurable content. For example, you can measure sick days for health insurance and employee satisfaction for a gym membership. These lead to counting turnover rate. The key is to find something you can measure for each one benefit.
Bartek Boniecki, Passport-Photo.Online
Calculate the Cost of Turnover
Employee turnover is costly no matter how you measure it. The quantity of work lost while searching for a successor increases year after year. But the correct benefits package can keep employees and encourage long-term commitment.
Having experienced this, I know that employing a single employee adds 33 percent to their wage. But this figure varies greatly between businesses. If you lose a highly specialized person, the recruiting process will be much more intensive.
Look for patterns in your company’s data. For example, notify new and departing employees. Examine how they align with new advantages or the reduction of old ones. Finding links between benefits expenses and employee turnover might help you better understand your benefits’ ROI.
Veronica Miller, VPNOverview
Speak Directly With Employees
It may seem simple, but asking your employees what benefits they enjoy the most can be an effective way to measure the ROI of your benefits program. You could do this either through face-to-face interaction or through an anonymous survey.
Every employee is different, but if you start to see a pattern of answers, you’ll know what you need to keep and what you need to change. Make sure your questions aren’t cookie-cutter.
You want to learn how time-off, retirement savings plans, and in-office amenities may affect their productivity and longevity at the company. By going directly to the people who actually benefit from the benefits your business offers, you’ll be able to easily figure out the ROI on what you’re currently offering.
Isaiah Henry, Seabreeze Management
Check for Growth-Oriented Work
Many benefits provide the opportunity for employees to relieve personal life stress to focus more legitimately on their work. One way to measure the ROI of employee benefits is to understand how much more they are able to get done and the relief of productivity preventing stress that benefits provide. Additionally, employee loyalty will increase, allowing better, more growth-oriented work.
Amy Block, Navitar
Measure the Pulse of the Company With Surveys
After implementing a new set of benefits, the ROI might be felt on a day-to-day basis or even on checking retention rates. But the best way to measure it directly is to use employee surveys and address their satisfaction rates before and after the implementation of the benefits.
You can also add questions directly related to those benefits in your surveys and measure the success of your newly implemented benefits in the blink of an eye.
Maciek Kubiak, PhotoAiD
Increase Productivity Using a Holistic Lens
One way to measure the ROI on the benefits that your business offers employees is to measure the productivity of each employee during the day. If an employee is being well taken care of, they are likely in a positive mental and physical state to be the most productive they can be.
If your benefits are lacking, the employee is likely dealing with physical, emotional, and mental stress and is unable to be as productive. If you have strong benefits that support the well-being of your employees, you will have productive employees that are able to get more done in less time.
John Wu, Gryphon Connect
Observe Employee Turnover
The direct measure of benefits ROI is tough. Typically employees minimize benefits relative to salary and equity when signing an offer, but benefits are often highly appreciated when in the role. That would imply that benefits’ ROI is most seen in decreased employee turnover.
In reality, benefits are meant to make it easy for the employee to do things they might otherwise be too distracted to accomplish. The benefits are actually best measured in happy employees and higher output.
Peter Fishman, Mozart Data
Promote an Internal NPS Initiative
You can use an internal net promoter score survey to see how different initiatives resonate with your employees. You can do this over time to see how things like productivity, happiness, and job satisfaction are impacted by different benefits, long-term projects like wellness, or even small one-off benefits like a WFH budget.
While it will be hard to put a dollar amount on this feedback, it’s a great way to get a feeling of how happy your employees are with their company and work environment.
Sylvia Kang, Mira
Find Correlations With Benefits Changes
Measuring the ROI of the benefits you provide to your employees is no exact science. That said, one way to get a proxy answer is to create a historical correlation between the changes in benefits offered and the number of days taken off from work.
Intuitively, the more generous benefits your company offers, the happier and healthier your employees will be. This should, in turn, translate to higher job satisfaction scores, less turnover, and (previously mentioned) fewer days of absence.
While the first can only be self-reported the latter two are much more tangible and accurately measurable. Over time, a tendency should emerge where it becomes clear that the changes in benefit package(s) offered are directly responsible for a smaller number of missed days.
Peter Bryla, ResumeLab