WC Incurs Fewer Lost Workdays, But Gains Eclipsed by Increases in LTD and STD IBI Says

Oakland, CA (WorkersCompensation.com) – “Chronic illnesses and injuries among the workforce cost US employers more than half-a-trillion dollars in lost productivity each year,” according to a new study. Data analyzed by the Integrated Benefits Institute showed that for every dollar employers spent on healthcare benefits last year, they lost another $0.61 of productivity due to illness or injury.

The authors used data from the Bureau of Labor Statistics as well as information from its own database of 66,000 employers, then calculated it using the IBI Full Cost Estimator, a proprietary online tool. The IBI found that patterns of absence have changed over the past few years. The authors suggest organizations prioritize investments in healthy workers for the post-pandemic economy.

The Stats

The Researchers looked at the average of lost workdays for various leaves. They compared figures for 2015 with those of 2019 to find the changing percentages of lost workdays per employee. For example, the average number of lost work days for employees out on workers’ compensation was 1.6 days in 2015, but decreased to .9 in 2015, for an overall average decrease of 44 percent, or 13 percent per year. However, there were increases in the number of lost work days for all other leaves studied during the same period: 

• Short term disability — +50 percent
• Long term disability — + 10 percent
• Sick leave — +12 percent
• Family and medical leave — +33 percent

“The steady decline in workers’ compensation lost-time incidents is great,” said Brian Gifford, director of Research and Analytics at IBI. “But five years on, the slow trend upwards in short- and long-term disability lost work time—which we might not have given much thought to from one year to the next — is something that employers need to get serious about addressing.”

To put the numbers into perspective, the authors said employers spend $950 billion annually on healthcare benefits. Workers covered for workers’ compensation, sick time, disability and family and medical leave benefits are absent an average of 978 million days due to illness. They also incur approximately 540 million lost work days due to presenteeism — being at work but underperforming. The grand total is nearly 1.5 billion days annually of illness-related absence.

Improve the Bottom Line

“Employers who primarily focus on the cost of health care expenses and don’t include the cost of lost productivity and the effects on their business outcomes and employee total wellbeing should look closely at these results,” said Kelly McDevitt, IBI president. “Designing programs and benefits that more fully support today’s employee needs will be an investment in long term success for their business.”

That could include financial wellbeing, caregiving, digital and expanded behavioral health support and mindfulness programs, or what McDevitt said are “additional products and programs that have been put in the spotlight during the pandemic which could affect productivity and presenteeism.”

What’s important, the authors said, is that employers look at the specific needs of their own workers when developing a benefits strategy. Employees’ responses to health risk assessments or healthcare and disability claims can reveal how many of them have chronic physical or mental conditions that may impact their job performances. Employers can then determine if the benefits they offer are adequate.

“This will be particularly important as COVID-19 vaccines get widely distributed next year and employers are counting on having people on hand to resume operations,” Gifford said. “How many people who were managing chronic conditions well before the pandemic had their care management plans disrupted because they had limited in-person access to their providers and how many were able to get adequate care through telehealth services? Will they be able to afford the kinds of treatments that might help them get a chronic condition such as diabetes back under control if they’ve gone without medical supervision for a while?”

Benefits that help relieve COVID-19-related stress can also go a long way to enhancing productivity. Many workers, for example, are caring for an elderly relative or an ill spouse or child, leading to absenteeism and presenteeism.

“The point is that while it’s tempting to offer some benefits as the same off-the-shelf solution as your competitors, if your strategy doesn’t take into account your workforce’s health, social and financial situations, it won’t necessarily contribute to your company’s operational performance,” Gifford said. “Companies that know their employees’ needs and design realistic benefits accordingly will be at a competitive advantage.”

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