ROI

 Improving lives and bottom lines:See the ROI of investing in your employees

Data from Happify Health’s recently-completed Randomized Clinical Trial (RCT) was used to predict the following ROI for a company with 60,000 employees and an average employee income of $100,000.

(DEFAULT VALUE = 60,000)
(DEFAULT VALUE = $100,000)
Activation
Minimal
15%
INCREASED PRODUCTIVITY
$5,121,900
REDUCED TURNOVER COSTS
$2,187,900
TOTAL GAIN
$7,309,800
Activation
Conservative
20%
INCREASED PRODUCTIVITY
$6,829,200
REDUCED TURNOVER COSTS
$2,917,200
TOTAL GAIN
$9,746,400
Activation
Expected
25%
INCREASED PRODUCTIVITY
$8,536,500
REDUCED TURNOVER COSTS
$3,646,500
TOTAL GAIN
$12,183,000

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INCREASED PRODUCTIVITY

Increased productivity is calculated based on improvement in an employee’s emotional health score combined with the financial impact of reduced depression. To further explain, we used the findings contained in the study, Severity of Depression and Magnitude of Productivity Loss[1] to assume Lost Productivity Time (LPT) of 4 days for each 1-point reduction in the Patient Health Questionnaire (PHQ) emotional-health score (1.65% of 260 annual work days). This ratio applies to all participating employees, and is consistent with the findings of other studies focused on the effect of depression on LPT (e.g.[7],[9]). LPT is mostly attributed to presenteeism, but also accounts for absenteeism. Data from Happify’s Randomized Clinical Trial (RCT)[11] measured the net PHQ improvement of sufficiently active Happify users vs. a non-active control. This data showed net PHQ decreases of 1.5, 2.8 and 4.5 points for those active users with mild, moderate and severe depressive symptoms, respectively. The commensurate savings in productivity per employee earned by reducing depressive symptoms is $3,462 for an employee with mild depression (23% of the average work force), $6,462 for an employee moderate depression (22% of the average work force), and $10,385 for an employee severe depression (3% of the average work force [13]). Taking the expected activation and retention rates into account (25% activation, 75% of which start using Happify tracks, 30% of which are sufficiently engaged), this cost translates into a total of $8,535,923 for the entire employee population as noted above.

REDUCED TURNOVER COSTS

Turnover savings are calculated using the expected improvement in emotional health score, the resulting reduction in turnover rate, and the overall costs of replacing an employee. The comprehensive study conducted in[13] reports turnover rates for different severity levels of depression. Interpolating between these levels, results in a 1.3% reduction in turnover rate for each 1-point reduction in the Patient Health Questionnaire emotional health score. Using the score reductions described above, we then expect an overall reduction of 1.4% in turnover rate. In a company of 50,000 employees, and given the same assumptions on activation and retention, 40 fewer employees will therefore leave each year. For a 60 days period to refill open positions, a 3-month learning curve, and an average annual salary of $100,000, the cost of replacing a single employee comes out to $77,169, and therefore an annual saving of over $3M for the entire company.