How to measure the ROI of a care benefit scheme in the workplace

The work landscape as we know it is constantly shifting as organisations are increasingly recognising the importance of providing holistic support to their employees. One of the areas gaining significant attention is care benefits – programs and policies designed to help employees balance their work responsibilities with caregiving duties for children, elderly family members or other dependents. While it’s easy to discern how care benefits can contribute to a positive workplace culture and boost employee wellbeing, measuring their Return on Investment (ROI) can be challenging. How do you know if your care benefit isn’t just effective for employees, but valuable for the organisation too? Let’s explore and delve into the intricacies of measuring the ROI of a care benefit in the workplace.

What does ROI mean?

Good start. ROI, meaning Return of Investment, is a formula used to determine the profitability of an investment. ROI is usually determined by the ratio between net profit over the total cost of the investment. In theory, this equation should give you the percentage of profitability and ROI:

ROI = (Net Profit / Investment) x 100

However, determining true ROI is far more complex than that formula suggests. Workplace benefits like mental health are harder to quantify and put a metric to, therefore their ROI might not score quite as high as others. Does that make mental health support less effective and valuable as a benefit? Or do we need to rip up the rule book on ROI and start again? First, we need to understand how employee care benefits actually add value.

Understanding Care Benefits and Their Impact

Care benefits encompass a wide range of offerings, including flexible work schedules, paid leave, caregiving support services and more. These benefits don’t only enhance employee satisfaction and engagement, but also directly impact productivity, absenteeism and turnover rates. By fostering an environment that supports work-life balance and alleviates caregiving stress, companies can potentially achieve several measurable benefits:

Reduced Absenteeism

Care benefits can help employees manage their caregiving responsibilities more effectively, reducing the need for unscheduled absences.

Improved Productivity

When employees feel supported in managing their caregiving roles, they are likely to be more focused and productive during work hours.

Enhanced Employee Retention

Companies that prioritise care benefits tend to retain their talent for longer periods, reducing the costs associated with recruiting and training new employees.

Attractive Employer Brand

Offering care benefits can enhance a company's reputation as an employer of choice, attracting top talent in a competitive job market.

Reimaging ROI for care benefits

Calculating the ROI of care benefits involves a combination of quantitative and qualitative metrics. It's important to note that while some benefits can be directly linked to financial outcomes, others may have intangible benefits that are equally valuable to the organisation. Here are some steps to consider when measuring the ROI of a care benefit:

1. Determine which specific metrics you will track to gauge the impact of the care benefit. These could include absenteeism rates, turnover rates, employee engagement scores, satisfaction ratings, productivity metrics and care costs.
2. Collect data both before and after implementing the care benefit to establish a baseline for comparison.
3. Calculate the direct costs of implementing the care benefit, such as program expenses and administrative overhead. Compare these costs to the savings generated through reduced absenteeism, increased productivity, lower turnover rates and satisfaction ratings.
4. While some benefits, like reduced turnover, can be quantified directly, others, such as improved employee morale and enhanced company reputation, are more qualitative in nature. Consider conducting employee surveys or focus groups to capture these intangible impacts.
5. Consider the opportunity costs associated with not providing care benefits. For instance, a lack of care benefits could result in less female employees and a lack of ethnic diversity.
6. Keep in mind that the benefits of care benefits may compound over time as employees experience reduced stress, improved work-life balance, and increased job satisfaction.

If you want to explore the quantifiable value that care benefits can bring your organisation, explore our handy ROI tool on the Seniorcare by Lottie website now.

But remember that doesn’t truly encapsulate ROI.

David Hopkins, Senior Reward Manager from BMJ, explains the qualitative ROI by working with Seniorcare by Lottie:

“You can apply a metric, but it’s more of a guide. What you’re looking for is the experience of the people in your workplace in my view. Some of the benefits colleagues have had from Seniorcare you can’t put a pound sign next to it. There’s no financial metric to reflect that sort of value. It’s about trying to build support that’s valuable rather than measurable for shareholders.”

Measuring the ROI of care benefits in the workplace is a multidimensional process that requires a 360° thought process. It's not solely about financial gains, but also about creating a supportive work environment that promotes employee wellbeing and engagement. By combining quantitative data with qualitative insights, organisations can accurately assess the impact of care benefits on both their employees' lives and the bottom line. As businesses continue to prioritise employee-centric policies, accurately measuring the ROI of care benefits becomes an essential tool for strategic decision-making and continuous improvement.

Looks like it’s time to rip up the ROI rule book after all.