The ROI on Benefits: The Healthcare Center at SAS

One of the most common questions I get asked about great workplaces is why they do it - what’s the benefit to the business? The best companies have cited a ton of reasons: more job applicants, lower turnover, and better financial performance to name a few. However, one recent example really caught my eye.

The story is about the onsite healthcare center at SAS, the business intelligence company that ranks #1 among the 2011 Best Companies to Work For in the U.S. Their Health Care Center (HCC) is an onsite center that provides employees and their dependents comprehensive and quality health care services that are cost-effective and innovative.  Ninety percent of SAS employees use HCC services, with the center tallying 20,943 onsite visits in 2009 alone. The overhead cost of providing this benefit to employees is $4.4M.

What is the benefit of spending over $4.4M on this one program for employees? According to the company, they saw savings of over $6M. In other terms, for every $1 invested in the HCC, SAS saved $1.55 in health plan costs and employee time.

More specifically, SAS estimates it saved $3,179,571 on its health plan. Further, the company saved over 53,000 employee work hours by having the HCC on campus, translating to almost $3M.

One other sizable return from the HCC is its impact on SAS’s incredibly low turnover (2 percent in 2009 vs. their industry standard of 22 percent). This difference translates into an approximate savings of more than $100 million/year in turnover costs.

So yes, benefits have a cost, and it makes sense to ask if they’re worth it. However, have companies realized the cost might come from not offering them?

Marcus Erb