Department of Health

Healthy Workers Initiative

Workplace Health Savings Calculator

Background Information

The Department of Health and Ageing acknowledges and thanks the Menzies Research Institute Tasmania and the Tasmanian Government for permission to adapt and reproduce their ‘Return on Investment (ROI) Calculator’.

This Calculator was developed using the best available evidence and has been designed with small and medium businesses in mind (it can also be used by larger businesses).

Notes

This Calculator estimates potential annual savings associated with implementing a successful workplace health program by measuring absenteeism and staff turnover in the workplace. These are two of the simplest variables to collect and measure.

The Calculator provides potential annual savings from reductions in absenteeism and staff turnover that could be expected from implementing a successful workplace health program based on average estimates from a range of studies1, 2.

Estimates for reductions in absenteeism and staff turnover rates were drawn from a PWC report that examined evidence from 55 case studies on workplace health1,. The reported average for reductions in absenteeism from these case studies was 30% to 40%1,. The reported average for reductions in staff turnover from these case studies was 10% to 25%1,. The estimate for the staff turnover replacement cost is an Australian national estimate that ranges from 75% to 150% of the staff member’s wage2,. This includes various costs involved in replacing an employee including recruitment, training, specialist knowledge and productivity3,.

Research indicates that reductions in absenteeism and staff turnover occur between two to five years after the implementation of a successful program4,.

There are other factors that could have a bearing on absenteeism and staff turnover in the workplace including: inadequate pay, poor workplace culture, ineffective management, poor career advancement prospects, lack of work satisfaction, work repetition, work overload, lack of work-life balance, conflict with peers and bullying and harassment.

The Calculator does not provide the option to input the cost of a workplace health program and therefore does not estimate a ‘return on investment’ (or the net benefits) or utilise cost benefit equations.

Definitions

A ‘successful workplace health program’ has no defined components. It is presumed that success will result when there is a supportive environment, the interventions are targeting employee needs and where employees are engaged. More information on how to implement a successful workplace health program is available here. To gauge the success of a workplace health program it is important to evaluate it, at the onset, during and following the program.

'Absenteeism’ or ‘Sick Leave’ is defined as unplanned sick leave that does not include other leave such as carer’s leave and maternity leave.

References

  1. PricewaterhouseCoopers LLP (2008) Building the case for Wellness. London: PWC.
  2. Australian Bureau of Statistics. Regional Wage and Salary Earner Statistics (Cat. No. 5673.0.55.003). Canberra ACT: ABS; 2008.
  3. Australian Human Resources Institute, HR Pulse 2008, ‘Love ‘em don’t lose ‘em’ – Identifying Retention Strategies that Work. 2008: Melbourne, Victoria.
  4. Grossmeier, J., et al., Best practices in evaluating worksite health promotion programs. Am J Health Promot, 2010. 24(3): p. TAHP1-9, iii.


Enter the Workplace Health Savings Calculator