If asked to tally up what illness costs your business annually, most of us would head straight for the easily measured suspects – sick leave, temporary staff costs and perhaps staff turnover. But in doing so, we may not account for problem that has the potential to make huge dent in business productivity.
A new report prepared by the New Zealand Treasury has turned the spotlight on the ‘hidden’ cost of presenteeism in the workplace. Presenteeism is defined as workers being on the job but, due to medical conditions or illness, not fully functioning. Health problems that result in presenteeism are many and varied, and include depression, back pain, arthritis, heart disease, high blood pressure and gastrointestinal disorders.
The Treasury report is based on Statistics New Zealand’s “SoFIE” (Survey of Family, Income and Employment) data. Of the adult working population surveyed, almost half reported reduced productivity due to emotional problems or physical health in the previous four weeks. Evaluated at the average full-time pay rate, this was estimated to cost the country between $700 million (39.3 million work hours lost) and $8.2 billion (409 million work hours lost) per year – range calculated by estimating illness-related reductions in productivity of between 15 percent and 50 percent.
Even at the lean end of the scale, it represents enormous lost opportunity. To put the figures in perspective, taking midpoint of the range ($4.1 billion) equates to 2.7 percent of GDP. For further perspective, New Zealand’s entire public health budget for 2010 was $13.6 billion.
In 2009, the Southern Cross Health Society commissioned independent research which estimated the impact of presenteeism and absenteeism to be $2 billion annual burden to employers – with 60 percent of this cost attributed to presenteeism.
The Southern Cross research found the average time off work due to illness (absenteeism) was 4.2 days per year, while the average number of days where employees went to work when they were too sick to be fully functioning and productive (presenteeism) was 11.1 days.
Though absenteeism can be measured through ‘direct’ costs of sick leave and temporary staff, these may be eclipsed by the indirect costs it can generate. Just consider the costs of the following:
• Time lost and administration finding replacement staff or reallocating work.
• Lapse in quality due to overworked staff or from staff being substituted into an unfamiliar role.
• Additional stress on other team members.
• Missed deadlines or extensions for projects.
• Quality or deadline issues creating unhappy customers.
The good news is that there’s plenty we can do about it. Enter the case for workplace health interventions. Several key health problems that can result in presenteeism are of the kind described as ‘lifestyle’ diseases, such as Type 2 diabetes, and are able to be better managed or even prevented through healthy lifestyle. We spend great deal of time at work, so it can be an ideal place to make the sometimes small, routine changes necessary to build wellness – and improve business productivity.
The first step might be to consider your workplace culture in terms of attitude to health – and whether in fact this is contributing towards presenteeism or absenteeism. For example, is sick leave spoken of in derogative terms? Is stress considered part and parcel of the industry? Do employees feel pressure to ‘soldier on’ with winter flu, potentially infecting other colleagues? When questioned privately, it’s possible that some employees are concerned about letting the team down, losing pay, or being thought of as unreliable by taking time off.
The second step might be to do workplace health audit. Employee health checks are an excellent way to gain an overview of the health risks within an organisation, and identify areas for improvement.
The third step is to implement initiatives to target the ‘problem’ areas identified. These could include:
• Flexible working hours or work from home options.
• On-site GP clinics.
• Subsidised health insurance to enable faster and more affordable access to medical treatment.
• Smoking cessation or nutrition workshops.
• Annual flu vaccinations.
• Work station assessments to prevent OOS or back pain.
• Workplace fitness programmes or sporting challenges.
The costs of implementing such initiatives have been shown to pay for themselves by negating direct illness-related costs alone. For example, in just the second year of running its inhouse wellness programme, Southern Cross Health Society reduced unplanned staff absence by around 15 percent.
Taking into account the potentially much greater indirect costs saved, it could very well be the best investment your business makes this year. M
Winter flu is upon us
Well, not quite. But right now is the time to prevent an empty office come July. Providing an annual workplace flu vaccination, either through an onsite clinic or vouchers for staff to get the vaccination at their local medical centre, is simple and cost-effective way to help prevent absenteeism and presenteeism during flu season. But vaccinators get very busy in the lead up to winter – so book well in advance. It takes two weeks for the vaccine to become fully effective so jabs are best delivered in March or April. In general, seasonal influenza activity begins rising in May.
