Which Employee Benefits Have the Highest ROI?

Employee benefits is an umbrella term used when discussing various non-wage compensation programs provided by employers to their employees.

The purpose of such benefits is to attract and retain top talent and based on recent statistics, benefits do matter:

  • 69 percent of employees feel that more and better benefits increase company loyalty[i]

  • 41 percent of employees would look for a new job if that new job had better benefits[ii]

  • 60 percent of job seekers consider benefits as a major factor when choosing a new job[iii]

Because benefits are so important to employees and potential employees, companies work hard to create an attractive benefits package.

Three Types of Employee Benefits

In general, employee benefits fall into three main categories:

  • Benefits required by law, such minimum wage and overtime pay

  • Benefits that are considered standard, such as healthcare and paid vacation

  • Benefits that are an added bonus

Naturally, the benefits required by law will make it into your benefits package. However, determining which other benefits to add – from life insurance to pet insurance to a company car – is a complex decision.

A 2018 report by Randstad[iv] found that 94 percent of employees want benefits that offer a meaningful impact on their quality of life. On the other hand, employers need to determine which benefits make the most financial sense.

To that end, here is a look at the return on investment (ROI) of a few benefits most sought after by employees.

Healthcare Insurance

Though not a mandated benefit for all employers, healthcare coverage is a standard benefit that most employees expect, especially when working for a mid-size company or larger.

Health insurance policies are used to cover specified medical expenses, and some include dental and vision coverage as options. About half of all Americans get their health coverage through an employer.[v]

Determining the return on investment of healthcare policies is tricky. The ROI depends on many factors, such as:

  • Size of the company

  • Number of employees participating

  • Percentage of employee premium paid by the employer

  • Percentage of employee dependent premiums paid by the employer

  • Policy deductibles

  • Policy coverage

However, a recent US Chamber of Commerce report found that health programs (including general healthcare, dental, and vision) have an ROI of $2 to $3 over a two- to nine-year period.[vi]

Health Insurance ROI = 200 to 300 percent

Health Wellness Programs

In addition to offering healthcare insurance that helps employees cover medical expenses, many companies (84 percent)[vii] now offer health wellness programs to help employees stay healthy. Such programs focus on employee well-being through such things as diet and exercise, stress reduction, and smoking cessation.

In addition to health insurance plans, there are several other ways that employers can impact their employees’ health in a positive way.

According to a recent Harvard study[viii], employee wellness reduces medical costs and absenteeism, bringing companies an ROI of $6.

Health Wellness ROI = 600 percent

Mental Health Benefits

Mental health benefits deal specifically with an employee’s emotional, psychological, and social well-being. The purpose of such benefits and programs is to help employees handle stress, relate well to others, and make reasonable choices.

Related article: Data Shows Strong Link Between Financial Wellness and Mental Health

A report from the International Foundation of Employee Benefit Plans found that 90 percent of employers offer some type of mental health benefit.[ix] The most popular include[x]:

  • EAPs: 90 percent

  • Mental-health coverage: 87 percent

  • Substance abuse treatment coverage/benefits: 73 percent

  • A mental-health assessment included in a health-risk assessment (HRA): 35 percent

  • Mental-health educational/informational sessions at the workplace: 34 percent

  • Stress-management programs: 23 percent

A Deloitte study[xi] found that the average ROI for mental health benefits is $1.62 per dollar spent after one year and $2.18 per dollar spent after three or more years.

Mental Health Benefits ROI = 162 percent to 218 percent

Tuition Reimbursement

Americans are drowning in student loan debt. As of the third quarter of 2020, 42.3 million Americans have $1.55 billion in federal student loan debt.[xii] With so many affected, there is no doubt that every company has employees carrying or considering student loans.

That’s why some employers offer tuition reimbursement programs. Such programs allow employees to take classes and be compensated for the tuition, or some portion of the tuition, based on grades and completion of the class. By offering tuition assistance, companies can encourage employees to seek higher education, keep employee retention rates high, and bring an added value to the company.

Although finding a generalized ROI is difficult, Accenture conducted a study of Cigna and found that they earned an ROI of $1.29 per dollar spent.[xiii]


Financial Wellness Benefits

Financial wellness benefits may be offered in addition to providing employees with some form of retirement investing, such as a 401(k). There are many different types of financial wellness benefits. However, a holistic financial education program has the highest ROI of these.

Holistic financial wellness will help employees understand financial topics and issues so that they can become and remain financially well.

This includes such things as:

  • Understanding how to budget

  • How to build credit

  • How to reduce debt

  • Managing student loans

  • Creating short-term and emergency savings

  • Understanding personal financial attitudes

  • Setting financial goals

  • Dealing with financial crises

The PWC Employee Wellness Survey found that 71 percent of employees who have access to a financial wellness program have used it,[xvi] while data from Enrich users in 2019 shows how these programs are used[xvii].

The Enrich behavior change studies have shown that users increased short-term savings, increased emergency funds savings, contributed more to their retirement plan, and were better at paying off their credit cards.

Many studies put the financial wellness ROI at 3:1[xviii], however, Enrich provides data in its whitepaper “Calculating the ROI for Employee Financial Wellness” showing an ROI of 15:1 or greater when taking into account the lowered costs of digital solutions.

Digital financial wellness solutions can drive metrics like increased productivity, decreased absenteeism, reduced HR administrative costs, reduced payroll taxes, increased 401(k) participation, reduced healthcare premiums, reduced on-the-job accidents, reduced employee turnover, and increased on-time retirement.

According to a recent study, finances are the number one stressor for nearly three-quarters of Americans.

When these issues come to work, productivity suffers, presenteeism increases, and employees feel less satisfied with their employment. One study shows that employee financial stress causes businesses $500 billion in lost productivity each year.

That’s why so many organizations have begun offering financial wellness benefits to their employees. Internal data from an Enrich customer shows that after using the financial wellness program for one year:

  • Financial stress decreased by 23%
  • 32 percent more employees increased their savings for specific goals
  • Those with at least three months of emergency savings increased by 27 percent
  • 15 percent more employees contributed to the employer-sponsored retirement plan
  • Maximum retirement plan contributions increased by 10 percent
  • 28 percent more employees now pay off their credit cards each month

However, now with the pandemic, remote work has become the norm for many employees, so the question becomes: “How can we build a financial wellness program that addresses the needs of our remote workers?”

Remote Work is Not Going Away

Remote work is a phenomenon that has been growing steadily. In fact, between 2005 and 2017, remote work increased by 159 percent.

Not only is it driven by employees who want the flexibility and freedom that remote work offers, but it is also driven by companies as they see cost savings, higher productivity, and the ability to create a smaller carbon footprint.

When the COVID-19 pandemic hit, remote work became the norm. According to a Gallup poll, the number of remote workers before the pandemic was about 25 percent but increased to 62 percent by the first of April.

Now, as restrictions ease across the United States, many companies are considering long-term remote work policies.

For instance, Nationwide plans to work from the office on only four main corporate campuses, allowing all other employees to work from home. A Global Workplace Analytics survey found that 77 percent of employees want to continue working from home.

Although there are many benefits to remote work, organizations that embrace this practice still need to consider the health and well-being of their employees.

Why the Financial Health of Remote Employees Matters

Gallup did extensive research on people living in 150 countries around the world. What they found were five interconnected elements of wellbeing:

  • Career
  • Social
  • Financial
  • Community
  • Physical

These elements affect everything from health to happiness to job performance. When employees are thriving, they are engaged and productive, adapt well to change, and have fewer sick days. That’s why offering wellness, including financial wellness, to remote employees is so critical.

Unfortunately, according to Gallup, just 1 in 14 employees in the U.S. thrives in all areas.

Creating an Inclusive Financial Wellness Program

To help your remote employees thrive, your financial wellness program needs to be inclusive. In other words, it can’t be aimed solely at in-office workers.

On the other hand, the program cannot focus solely on those working remotely. Instead, the program should be geared to help all employees, regardless of where or when they work, become financially well.

Here are some key elements to consider when designing such a program.

Ask Questions

If you want to know what your remote employees need in a financial wellness program, ask. You can do this through surveys and assessments to all employees, making sure that you include those elements most sought after by employees.

While you’re at it, also ask remote employees how they would prefer to learn about financial wellness offerings.

This will help your organization determine the best way to spend money on this benefit.

Communicate and Foster Connections

One of the best ways to get employees involved in financial wellness is to foster connections. However, when companies have remote employees, they need to think about how these connections occur.

These individuals do not hang out in the breakroom, nor are they often considered to be part of committees to champion the program.

Although they are not in the office, remote workers can still be part of the process. The use of technology, such as IM, FaceTime, Zoom and Skype, can bring remote workers into the office for webinars and presentations.

And don’t forget about social media. This is a great medium for keeping remote employees up-to-date about financial wellness initiatives.

Finally, when it comes to communication, think carefully about your word choices. You don’t want remote workers to feel excluded.

Personalize Programs

Financial wellness isn’t just about retirement and contributions to the employer-sponsored plan. Although this is a needed element, employees seek information about a wide number of financial issues, including:

  • Debt
  • Spending
  • Saving
  • Credit
  • Investing
  • Healthcare expenses
  • Student loans
  • Buying a home
  • Identity theft

Financial wellness programs need to not only address these needs but consider how to deliver these needs to both in-office and remote workers.

Employee Assistance Programs (EAP)

The link between stress and finances is strong. In fact, of stressful situations, three of the top four relate to finances. And remote employees often experience even more stress than their in-office peers due to loneliness and isolation, trying to balance work/home life and knowing when to end their day.

The best financial wellness programs for remote employees understand this connection and offer seamless interaction between physical and mental wellness programs and financial education programs.

Make It Fun

One of the best ways to spur engagement no matter where an employee is located is to make sure that the financial wellness program is fun and interesting.

Studies show that gamification increases participation, motivation and engagement. More importantly, gamification leads to more repeat use and learning more.

Some fun gamification elements include:

  • Achievements
  • Certificates
  • Badges
  • Points
  • Countdowns
  • Challenges
  • Leaderboards


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