Product Hack: Cost of Health Calculator

How we built a tool to better estimate the cost of sickness absence, staff turnover and presenteeism and what we learned from it.

The Problem

Workforce Health & Wellbeing are intuitively good things to have. But how do you make the financial case for investment? In our experience, in countries where there is no direct cost of health to the employer e.g. the UK, health and wellbeing programmes are seen as a “nice to have” rather than a strategic investment. For a HR lead to convince a Finance lead to back their proposal, they needed something to communicate the value.

The Solution

We knew we needed something that would bridge HR and Finance, so we focused on the quantitative workforce research, using KPIs from both sectors. Alongside this, we developed mathematical models of different types of company e.g. billed by the hour versus production line. We prototyped the tools using Typeform and Google Sheets, using Zapier to pass data between the services and a simple set of scripts to generate PDF reports when data was submitted.

This resulted in a simple tool to estimate the cost (and loss) of staff wellbeing in an single company or department, based on HR metrics and translated into financial models. The tool was used by several large organisations, including a major bank, to help their teams define the health and wellbeing budgets.

What we learned

• We also realised that wellbeing impacts finance in a much larger way through lost income/productivity, rather than direct costs. This is why it’s so hard to measure and also relatively tricky to prevent.
• We also learned that generally, lost productivity matters a lot less than direct cost to finance teams, as the productivity challenge tends to lie with operational management teams.
• There’s a huge difference in how you model different types of organisation/team. For example, a Sales firm, who pay 100% commission with low sick pay and high turnover, will cost less than a Legal firm with high salaries, good sick pay and low turnover.
• Perversely this makes it clear to us that sometimes it is more efficient to provide bad terms for staff, than good ones.
• Finally, gathering all this data made people nervous in some organisations, both as it sometimes took lots of effort and occasionally turned up failures people had been trying to hide.