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Wellness Costs
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The rising cost of healthcare presents a unique challenge to many companies today. Major health concerns of the past were related to infectious disease. Today, however, the leading causes of death and decline in quality of life are largely due to unhealthy lifestyle choices. Studies of comprehensive worksite health programs and corporate fitness programs can lower healthcare and insurance costs. Increased productivity, improved performance and reduced absenteeism are additional benefits of these programs. Recent studies indicate that nearly 50% of corporate profits now go towards healthcare costs versus 7% thirty years ago. Employee wellness programs are the best approach to reducing employer, employee and overall healthcare costs. For organizations such programs reduce costs by increasing worker productivity by lowering absences from work and direct medical costs. The result is a demonstrably improved bottom line.
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| Statistical Information: The 2005 survey found that while the rate of unscheduled absenteeism barely budged since last year, the average per-employee cost has risen to $660 per employee – costing some large employers over $1 million per year. hr.cch.com How much does unscheduled employee absenteeism cost? In U.S. workplaces in 2005, the direct cost (excluding opportunity costs) was about $660 per employee per year. Human Capital Benchmark Measures On any given day, 6.4 percent of manufacturing employees miss a day's work. A survey from Circadian Technologies shows that unscheduled absences cost companies $3,600 per hourly employee per year and $2,650 per salaried employee each year. When employees are sick and stressed, they don't perform up to their potential, which affects an employee's "presenteeism", he says. Presenteeism describes an employee who goes to work physically but not mentally because of diseases and ailments such as hypertension, migraine headaches, and hay fever, Goetzel explains. Presenteeism costs can outweigh an employer's medical costs, Goetzel asserts. Annually, employers spend $136 per employee for stress, $70 per employee for weight issues, $44 per employee for tobacco use, and $29 for glucose problems, Goetzel says. The Business Journal - Central New York |
Articles: Wellness Programs are Worth Every Dollar You SpendEmployee-Wellness Programs Pay Off in Productivity and Morale Fitness Benefits Comes in From the Fringe DaimlerChrysler Corp receives prestigious Corporate Health Achievement Award Reduce Absenteeism and Costs Related to Chronic Back or Neck Pain Work Related and Individual Predictors for Incident Neck Pain among Office Employees Employee Wellness is Good Business Microsoft: Shape_up_your_company.pdf Shape up your company with a wellness programAbsenteeism Costs Companies More Than Ever |
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Rising healthcare and ins costs: General Motors is a good example of how the cost of health care affects a company's bottom line. As the largest private provider of health insurance in America, GM spent $5.3 billion to cover 1.1 million people in 2005. In 2004 the company paid $1,525 in health care costs for every car it made in North America, according to management consulting firm A.T. Kearney, while Toyota, having recently supplanted Ford as the world's second-biggest auto manufacturer, spent just $201 in health care costs for every car it made. http://goliath.ecnext.com/coms2/gi_0199-5804371/Stuck-in-the-waiting-room.html
In a survey of eleven U.S.-based telecommunications organizations, 72
cents of every dollar of costs related to employee absence stems
from lost productivity, rather than hard costs, such as health care
and disability benefits. Of all the expenses related to absence, unscheduled time off has the
biggest impact on productivity, profitability and morale. Companies lose
approximately 2.8 million workdays each year because of employee injuries
and illnesses, according to the U.S. Bureau of Labor Statistics. Problems in productivity, absenteeism, turnover, increased costs, decreased accuracy and low morale are directly linked to aches and pain, vision problems and comfort levels in the computer intensive environment (Niland, 2003) Stress: The American Institute of Stress estimates that 75-90 percent of all visits to doctors are for stress-related disorders. Every week, 95 million Americans suffer some kind of stress related symptom for which they take medication. According to the 2007 CCH Survey, nearly two-thirds (64 percent) of unscheduled absences are due to Family Issues (22 percent), Personal Needs (18 percent), Entitlement Mentality (13 percent) and Stress (11 percent).American businesses lose an estimated $200-$300 billion dollars per year to stress related productivity loss and other cost. To put this in perspective, this amount is higher than the total cost related to all strikes and the net profit from all Fortune 500 companies! http://www.holisticonline.com/stress/stress_introduction.htm The American Medical Association stated that stress was the cause of 80 to 85 percent of illness and disease. Northwest National Life reported in 1993 that one million absences each day in the workplace are stress-related. Farrell, F. (1994) The demoralized zone: Healing the downsizing survivors. Executive Directions. September/October: 37-43 The total health and productivity cost of worker stress to American business is estimated at $50-$150 billion annually. Sauter, S.L.; Murphy, L.R.; and Hurrell, Jr., J.J. (1990) Prevention of work-related psychological disorders. American Psychologist. 45(10):1146-1153 A study of 3,020 aircraft employees showed that employees who "hardly ever" enjoyed their job were 2.5 times more likely to report a back injury than those who reported "almost always" enjoying their job. Bigos, S.J.; Battie, M.C.; Spengler, D.M.; Fisher, L.D.; Fordyce, W.E.; Hansonn, T.H.; Nachemson, A.L.; and Wortley, M.D.. A prospective study of work perceptions and psychosocial factors affecting the report of back injury, Spine, 1, 1?7, 1991. Forty percent of job turnover is due to stress. Bureau of National Affairs Workers with high stress were over two times more likely to be absent 5+ days a year. Jacobson et al (1996) American Journal of Health Promotion, 11(1). One-fourth of employees view their jobs as the number one stressor in their lives. Northwestern National Life Three-fourths of employees believe the worker has more on-the-job stress than a generation ago. Princeton Survey Research Associates Problems at work are more strongly associated with health complaints than are any other life stressor-more so than even financial problems or family problems. St. Paul Fire and Marine Insurance Co. According to a survey of 800,000 workers in over 300 companies, the number of employees calling in sick because of stress tripled from 1996 to 2000. An estimated 1 million workers are absent every day due to stress. http://www.stress.org/job.htm Job stress is also very costly with the price tag for U.S. industry estimated at over $300 billion annually as a result of: http://www.stress.org/job.htm
Every time a grievance is brought up, lost productivity by the employee and those around him/her is about 80 work hours. Wilson, B. (1991) U.S. businesses suffer from workplace trauma. Personnel Journal. July, 1991: 47-50. $5 to $6 billion decreased productivity annually occurs due to real or perceived abuse of employees. Bureau of National Affairs. (1990) Violence and Stress: The Work/Family Connection. The BNA Special Report on Work and Family, Special Report #32. August 1990: 2. Lack of physical Activity: About 25 percent of U.S. adults report little or no regular physical activity, and over 60 percent do not get enough exercise to benefit their health. http://jama.ama-assn.org/cgi/content/full/299/1/30 Experts estimate that it costs American employers $700 million per year to replace the 200,00 men aged 45 to 65 who die or are incapacitated by coronary artery disease. Cooper, C.; Cooper, R.; and Baker, L. (1988). Living with Stress. Harmondsworth, NY: Penguin Health.
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