U.S. Productivity Loss from Illness Costs Employers $250.0 Billion, Flu Adds $9.0 Billion in 2018

U.S. Productivity Loss
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In the U.S., sick employees in the workplace results in billions of dollars annually in lost productivity. In fact, according to the Centers for Disease Control and Prevention (CDC), U.S. productivity loss due to chronic conditions, which are largely preventable, costs U.S. employers’ losses due to lost productivity totaled over $153.0 billion annually. While chronic conditions like heart disease, diabetes, and being overweight cost U.S. employers in lost productivity, so too does poor mental health (anxiety, depression). Sick employees in the workplace also weigh heavily on lost productivity. The flue season die to the current H3N2 virus strain could end up costing U.S. employers $9 billion in 2018 alone.

It’s easy for employees to notice absenteeism, but presenteeism (working while sick) can be just as costly. According to a study by Challenger, Gray & Christmas, Inc., if employees take four days off to deal with the aggressive flu strain making its way across the country, it could end up costing employers $9.4 billion in lost productivity.

Sick employees might think coming into work when they’re feeling ill is better than staying at home, but this only increases the likelihood of spreading their illness and the flue impacting employers and coworkers alike, further exacerbating productivity and absenteeism. Studies show it’s better to stay at home when you’re ill. There is a 24% loss of productivity when a sick employee stays home. When that same sick employee comes to work, there is a 72% loss of productivity for the same time period.

“While sick workers may think they are doing the right thing by ‘toughing it out’ and coming into work when they feel ill, they are only likely to spread their illness, potentially further interrupting optimum business operations,” said Challenger, Gray & Christmas. “Whether it is motivated by job security or a desire to continue making a contribution in an overburdened workplace, presenteeism, as it has come to be called, should be strongly discouraged by employers.”

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It’s not just seasonal illnesses that cost employers in lost productivity. The Centers for Disease Control and Prevention says that more than 75% of all healthcare costs are a result of preventable chronic conditions. In the U.S., it is estimated that 86% of full-time works have at least one chronic condition and/or are overweight. This costs the U.S. economy more than $153.0 billion in lost annual productivity.

For example, medical care for employees who do not exercise is about 4.7% higher than the costs for those who exercise one day a week. What’s more, each smoker costs their employee $4,430 a year in lost productivity due to lost work, compared to $2,623 for non-smokers.

It has been estimated that as much as 50% of the typical employer’s annual medical costs could be avoided by addressing weight management, smoking cessation, exercise, and preventative healthcare.

Diabetes Costs More Than $20.0 Billion to Employers Every Year

Both the direct and indirect medical costs of treaty chronic health issues like type 2 diabetes are costing U.S. employers as much as $20.0 billion each year. And with the incidences of type 2 diabetes rising each year, that cost is only going to soar. In 2008, 10.6% of the U.S. population had diabetes; in 2017, it was near 11.5%.

Had the diabetes rate stayed at 2008 levels, roughly 2.3 million U.S. adults would have diabetes today. Not only that, but healthcare costs due to diabetes would be $19.2 billion less than current costs.

Diabetes not only impacts the U.S. economy through direct costs, it also lowers employee productivity because of absenteeism due to illness. It is estimated that over 57 million unplanned days of work are missed annually by employees who have diabetes. The annual cost to U.S. employers is $20.4 billion.

Poor Mental Health Leading to Nearly $225.8 Billion Loss for Employers Each Year

Poor mental health is also a major contributor to lost U.S. productivity. One in five Americans, or 20%, suffer from poor mental health. Of those, 60% that are diagnosed with anxiety, depression, and stress do not seek treatment.

Because employees do not seek treatment for these conditions and subsequently experience exhaustion, decreased motivation, burnout, and high turnover rates, mental illness costs employers an estimated $225.8 billion each year.

While programs exist that can help employees reduce anxiety or depression, most employees do not enroll in them because they do not think they suffer from these conditions. To help encourage employees to join a program, some provide onsite medical services.

The fact is, U.S. workers take more time off work each year due to mental health issues than physical illness or injuries, meaning increased financial loss due to poor mental health. Businesses that prioritize physical health over mental health are impeding the success of their employees and their businesses.

 

Sources

H3N2 Spreading Rapidly Nationwide: Earlier, More Aggressive Flu Season Could Cost Employers $9.4 Billion,” Challenger, Grey & Christmas, Inc., January 12, 2018.

What Is The Price of Poor Health? It’s Not Just Healthcare Costs,” Edumedics LLC, September 2, 2016,

The Cost of Diabetes in the U.S.: Economic and Well-Being Impact,” Healthways, Inc., last accessed January 19, 2018.

How Mental Health Can Save Businesses $225 Billion Each Year,” Inc., June 16, 2016.

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