Building the Business Case for Workplace Health

A Healthy Organization Makes Cents!On average adults spend almost two-thirds of their waking hours at work. A supportive work environment is important in creating a healthy workforce. Organizations that place a high value on workplace health can experience the following benefits:

  • Attract and retain the best employees while reducing employee turnover
  • Improve productivity while increasing job satisfaction and morale
  • Reduce absenteeism, injuries and sick days
  • Reduce health expenses, insurance and benefits costs
  • Improve corporate image

A healthy workplace makes sound business sense. Consider these statistics that illustrate the costs and benefits.

Costs

Absenteeism / Lost Productivity

  • Average workdays lost per full-time worker due to illness or disability stands at 7.4 in 2010. Average workdays lost due to personal and family responsibilities are 1.7 for the same timeframe. Taken together, workers lost an average of 9.1 days of work due to illness or family obligations (Stats Canada 2011 2010 Census Catalogue, May 2011)
  • Excluding vacation and maternity leaves, Canada lost 100 million workdays for personal reasons in 2010, up from 85.2 million workdays in 2001 (Statistics Canada for Sept 2010). Using an average weekly pay rate of $853.19 and assuming a five-day working week and a daily rate of $171.00, the cost was about $17.1 billion in 2010.
  • It is estimated that 40 minutes/day is lost to the smoking ritual each day/smoker. Each smoker in a workplace will cost their employer an average of $3,396/year in decreased productivity, increased absenteeism, increased life insurance premiums and smoking area costs (Conference Board of Canada, 2006).

Health Benefits Costs

  • Employees with high caregiver strain are 1.6 times more likely to spend $150 or more on prescription medication in a 6-month period than employees with low caregiver strain (Duxbury et. al, 2004) .
  • Employees with high work to family interference are 1.3 times more likely than those with lower levels to spend $150 or more on prescription medication in a 6-month period (Duxbury et. al, 2004) .
  • Health care costs are 2x - 3x greater for an employee with 3 or more risk factors (i.e. sedentary lifestyle, smoker, overweight and drink too much) than those with no such risk factors. The more risk factors someone has, the greater the cost to an employer they are (Shain & Suurvail, 2001) .

Turnover

  • The Conference Board of Canada reports turnover costs of an unsatisfied employee leaving an organization to be 50% - 150% of the employee’s yearly salary. Based on an average salary this would result in a replacement cost ranging from $17,550 - $52,650 per employee for a non-senior executive position.

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Benefits

There are many benefits for organizations that promote workplace health. National statistics show that it makes good business sense.

Reduced Absenteeism/ Improved Productivity

  • MDS Nordion's comprehensive workplace program helped to reduce absenteeism from 5.5 to 4 days annually and cut turnover to half the industry average (Lowe, 2002) .
  • Workplace health initiatives helped American Express Canada see turnover rates drop to 23% between 1998 and 2000. The industry average is 40% (Canadian Labour and Business Centre, November 2002) .

Improved Health Benefit Costs

  • For each employee who gets access to treatment for their depression, the employer will save between $5,000 and $10,000 per year in the cost of prescription drugs, sick leave, and average wage replacement (Wilson et al., 2002) .
  • DuPont found that employees exposed to their workplace health promotion program showed a 14% decrease in disability days over a two year period, as compared to employees not exposed to the program. (Bachmann, 2002) .

Improved Work-Life Balance

  • A study by Duxbury & Higgins (2003) found that employees reporting low levels of role overload and work-to-family conflict are more satisfied employees compared to their counterparts.

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