The Performance Imperative: Employee Health and Productivity

Carl B. Forkner, Ph.D.


Part three of a three-part series


Abstract

One of the growing problems facing companies today is the increasing cost of employee illness. This manifests itself in healthcare costs, disability claims, and loss of productivity when employees are not working at their full potential. Companies are realizing the importance of viewing healthcare and preventative positive measures rather than solely reaction to illness. Neuroscience provides a timely, enduring solution to employee wellness that balances brain health and has a positive effect on physical health, that has been shown to improve employee productivity.


Introduction

Much of the adult population spends one-third of their lives at work—sometimes more. This makes the balance between work and life an interconnected challenge that affects both quality of life and workplace performance. With nearly 20% of working-age adults experiencing some type of mental health challenge and the incidence of depression increasing by 33% over a three-year period (Staglin, 2019) this work-life interconnectivity must be of importance to employers because of its impact on productivity. Research released by the Integrated Benefits Institute on November 26, 2018, indicated that lost productivity costs employers an estimated $530 billion per year. This article will include discussion of some of the implications and remedial action that may impact workplace performance.


Mental Health and Employee Productivity

Employee health and well-being have become a key factor in business. Beyond the desire to have a positive workplace culture where employees thrive, health concerns are critical in the financial well-being of companies from the perspective of cost. Economic challenges often result in employees experiencing increased workplace stress and unhealthy behaviors, which leads to decreased satisfaction and performance. For employers, that means that employees—although present at work—exhibit impaired performance during the workday. This phenomenon is called presenteeism—an employee is at work but not fully productive. As stress and displeasure increase, these employees may also become absent more often—or absenteeism.


Absenteeism

When employees are absent, either their work does not get done or it is shifted onto the already existing workload of another employee(s). If an employee misses one day of work every four weeks, that translates to 16 hours of non-productivity per month or a total of 192 hours (in a nominal 50-workweek year)—a total of 24 full days lost due to health absenteeism, or one full work-month. At a wage or salary equivalent to a $15/hr entry-level position, this loss amounts to $2,880.00 per year for that employee in monetary cost of lost productivity.


Using millions of disability claims in IBI’s Benchmarking data, survey responses from the Health and Productivity Questionnaire (HPQ), and nationally-representative data from the CDC and BLS, the FCE model estimates that illness-related absences, disability leaves, impaired job performance, and occupational injuries and illnesses cost U.S. employers $530B [in 2017]. (IBI, 2018a)


Beyond the days of productivity lost because of absenteeism, employees with limited sick leave and/or regular leave are likely to be present at work while not feeling well—physically or mentally—resulting in decreased performance. This may be a result of normal maladies such as colds or the flu, mental issues such as depression or anxiety, or conflicting life issues that remain in the forefront of the employee’s mind. In these cases, employees are considered to lose productivity through presenteeism.


Presenteeism

According to the IBI’s Full Cost Estimator (FCE) model, impaired performance for employees with chronic illness amount to the equivalent of 527 million lost work days—or nearly 2% of the total labor inputs for 143 million U.S. workers (IBI, 2018a). This includes the effect of workers who have dependence on substances for issues like chronic pain, allergies, or other physical or psychological conditions. A study (IBI, 2019) noted the following results regarding the effect of substance use by employees:

· One in every three workers reported pain reliever use.

· Use of alcohol—and dependence—exceeded the use of pain relievers and associated prescription medications.


In a broad study of 10 health conditions, data on the total cost of health and productivity losses examined the relationship of presenteeism compared to absenteeism. Based on impairment and estimates for prevalence of conditions, hypertension was the highest detractor for productivity, followed by heart disease, mental illness (including depression), and arthritis (Goetzel et al., 2004). The study found that presenteeism costs exceeded medical costs in most cases and accounted for 18% to 60% of all costs associated with the 10 conditions. The highest areas for prevalence of conditions affecting presenteeism are illustrated in Figure 1.


Figure 1. Prevalence of conditions affecting presenteeism.


For many conditions that affect productivity, balancing the brain to optimize neurophysiological well-being is important to mitigate—or eliminate—these detractors. The brain is our body’s CPU, controlling our nervous system using chemicals called neurotransmitters that allow the different areas of the brain to communicate. Neurotransmitters communicate within a healthy brain to develop positive neuroplastic pathways. Current knowledge suggests that the adult brain is dynamic, changing based on both internal and external influences. This phenomenon of remodeling the brain is referred to as neuroplasticity, which changes can be either adaptive or maladaptive (Kays, Hurley, & Taber, 2012).


Positive neuroplasticity is the result of experience, exposure, and practices creating neuronal connections that influence positive resilient positive psychological and physiological functioning. Negative neuroplasticity occurs when the brain is remodeled by traumatic experience, exposure, or practices that create maladaptive results, such as sleep disorders, hypervigilance, and substance dependencies. Trauma and chronic stress may result in the brain being “stuck.” Harnessing the power of advanced computer technology serves to help the brain to “heal itself” or rebalance. Having the brain in a balanced state leads to a better quality of life, allowing us to act in a more deliberate manner, take care of our bodies through proper nourishment, balance emotional responses, and increase realization of potential through enhanced performance. Using neuroscience and biosignaling provides a pathway to engage this advanced computer technology with the brain and body.


Mental Health and the Business Case

Mental health is a direct contributor to productivity. As such, mental health has a role in determining profitability or return on investment (ROI) on employees. Therefore, an important question that business leaders should be asking is how the corporate culture fosters a positive environment conducive to positive neuroplasticity and optimizing employee productivity.


A 2018 study analyzed the cost of mental health disabilities over a six-year period (IBI, 2018b). The findings showed that average depression/mood disorder short-term duration lasts 81 days, costing an average of $7,200, compared to anxiety (72 days and $6,200) and other diagnoses (67 days and $5,100). A comparison to non-mental health short-term disability underscored the importance of mental and behavioral health—non-mental health short-term disabilities cost an average of $4,700. When short-term disabilities turned into long-term ones, the cost rose sharply. Overall, about 10% of depression/mood disorders convert to long-term at an average cost of $40,200, with 7% of anxiety claims converting ($34,200). While other mental and behavioral health conditions converted to long-term, the cost rose to an average of $50,000 per employee affected.


The Business Case

The dominant discussion regarding healthcare has been concerns with increasing costs, both in premiums and claim costs. In recent years, a focus has emerged viewing healthcare as a function of employee wellness as a way to reduce corporate healthcare costs. Keyes and Grzywacz (2005) found that individuals characterized as being completely healthy reported the greatest productivity and lowest healthcare costs. Conversely, individuals reported declining productivity and increased healthcare costs directly correlating to degree of illness.


Ozminkowski et al. (2016) found that employers are focusing on building the business case for health and wellness programs—not only for potential cost reductions but with an eye toward increased productivity. In fact, the results of the study showed that the top three reasons why employers offer health and wellness programs were to (1) reduce employee health risks, (2) reduce healthcare costs, and (3) improve employee productivity. In breaking down further the components of these three areas, eight focused subsets of the three areas emerged:

· Reduce/manage disability claims

· Improve employee job satisfaction

· Impact business performance metrics and profitability

· Improve employee daily health decisions at work

· Attract or retain talented employees

· Reduce the number of sick days

· Reduce presenteeism

· Improve employee morale (Ozminkowski et al., 2016)


Supporting these findings, Qaisar, Mariam, and Ahmad (2018) found a direct relationship between employee wellness and productivity. Those employees with high levels of wellness exhibited high levels of productivity; employees with low levels of wellness exhibited lower levels of productivity.


Summary

The challenge of escalating healthcare costs will continue to be a concern to business executives; however, a tide has turned and a focus on proactive, preventative health and wellness programs as opposed to reactive claim management is becoming more prevalent among companies. Neuroscience provides a timely, non-invasive, non-pharmaceutical solution to increased employee productivity. As the brain balances, so also may the body’s critical functions, including stress resiliency and maintaining an overall psychophysiological balance that enhances productivity.



References

Goetzel, R., Long, S., Ozminkowski, R., Hawkins, K., Wang, S., & Lynch, W. (2004). Health, absence, disability, and presenteeism cost estimates of certain physical and mental health conditions affecting U.S. employers. Journal of Occupational and Environmental Medicine, 46(4), 398-412. doi:10.1097/01.jom.0000121151.40413.bd

IBI. (2018a). Illness-related lost productivity costs employers $530B. Retrieved from https://www.ibiweb.org/illness-related-lost-productivity-costs-employers-530b/

IBI. (2018b). Short- and long-term disability outcomes for mental and behavioral health claims. Retrieved from https://www.ibiweb.org/short-and-long-term-disability-outcomes-for-mental-and-behavioral-health-claims/

IBI. (2019). Opioids, Pain and Absence: The Productivity Implications of Substance Use Among U.S. Workers. Retrieved from https://www.ibiweb.org/opioids-pain-and-absence/

Kays, J., Hurley, R., & Taber, K. (2012). The dynamic brain: Neuroplasticity and mental health. Psychiatry Online. doi:10.1176/appi.neuropsych.12050109

Keyes, C., & Grzywacz, J. (2005). Health as a complete state: The added value in work performance and healthcare costs. Journal of Occupational and Environmental Medicine, 2005(47), 523-532. doi:10.1097/01.jom.0000161737.21198.3a

Ozminkowski, R., Serxner, S., Marlo, K., Kichlu, R., Ratelis, E., & Van de Meulebroecke, J. (2016). Beyond ROI: Using value of investment to measure employee health and wellness. Population Health Management, 19(4), 227-229. doi:10.1089/pop.2015.0160

Qaisar, M., Mariam, S., & Ahmad, F. (2018). Employee wellness as predictor of productivity from public sector management perspectives: Conditional process analysis. International Journal of Business Management, 13(2), 104-116.

Staglin, G. (2019). Why mental health is an executive priority.



Dr. Forkner is a research psychologist with Vitanya Brain Performance. His current research focuses on psychological studies, including comparative analyses of personality assessments, relationship between assessment instruments and behaviors, neuroscience, and mental health and wellness.