Reducing employee Costs

 Reducing Employee Costs

It is well documented that stress is one of the driving forces behind the rising rate of costly unscheduled absenteeism. A recent study by CCH, Inc. shows that almost two thirds of all unscheduled absences are for reasons other than Personal Illness. But exactly what is stress, where does it come from, and how does that relate to employee legal needs?

Job Stress Defined

The National Institute for Occupational Safety and Health (NIOSH) defines job stress as "the harmful physical and emotional responses that occur when job requirements do not match the capabilities, resources, or needs of the employee.”

Stress and Absenteeism

Today's fast-paced life-style exacts its toll. A recent CCH survey indicates the reason most employees call in sick at the last minute is driven more by personal issues than physical illness. Personal Illness remains the leading reason for unscheduled absences (33 percent), but two out of three absences were for other reasons. An increasing number of employees missed work at the last minute because of Family Issues (24 percent) and Personal Needs (21 percent) – with Personal Needs keeping people at home nearly twice as often in 2002 as in 2001, when it was 11 percent.

The Causes of Stress

Employees can be placed under a great deal of stress by everyday life situations. This includes family problems, bad financial planning, debt collection, identity theft, and many others. The employee needs to spend time (a limited resource) to deal with a life situation, but can't because their job requires them to spend that time at work. Most times the solution requires legal services, which requires the employee to spend even more time away from work. Add the fact that legal services are unfamiliar and confusing to most employees, making the need for legal services a double-edged sword that causes tremendous amounts of stress, which is the root cause of costly absenteeism, turnover, and on-the-job accidents.

The Cost of Stress

The cost of stress is staggering. The American Institute of Stress (AIS) puts it at $300 billion annually, which includes “accidents, absenteeism, employee turnover, diminished productivity, direct medical, legal, and insurance costs, workers' compensation awards as well as tort and FELA [Federal Employers’ Liability Act] judgments.” Actual costs per employee run about $798 per year, according to CCH, Inc. in their 2002 CCH Unscheduled Absence Survey. In fact, when the costs of stress-related illness is factored in, the cost of stress may be much higher than $300 billion. Newsweek magazine devoted considerable space to the impact of emotional stress in its cover feature “The New Sciences of Mind and Body” (Sept. 27, 2004). It shows much evidence that stress is correlated with heart disease (and many other medical problems) and that reducing stress can boost one’s immune system and help control diabetes. According to Newsweek, many experts find that 60-90 percent of all doctor visits are stress-related. The medical costs are indeed enormous! 

 Presenteeism

 Is defined as an employee being present but not being fully focused and productive because of personal health and life problem distractions.  The old saying of someone "being there in body only" sums up the concept of presenteeism. Presenteeism manifests itself in many ways, such as lack of focus, accidents and mistakes, interpersonal difficulties, poor work skills and production problems. 

Presenteeism accounts for 61% of an employees total lost productivity and medical costs - Cornell University study, Journal of Occupational and Environmental Medicine, April 2004.

  
 The Cornell University study highlighted in blue above researched 375,000 employees over a three year period. In addition to that exhaustive study, many others have uncovered an alarming set of statistics. Examples are:

• Presenteeism costs employers an estimated $2000/yr/employee (Cigna Behavioral Health, April 26, 2004)
• 42% of employees anticipate elder care issues over the next five years (Risk and Insurance, March, 2004)
• 37% of employees with current elder care issues have lost work time per week, a total of (11) hours/wk spent. (Risk and Insurance, March, 2004)
• 49% of employees lose productivity at a rate of 1 hour or more/day due to stress. (Business Legal Resources, April 24, 2003)

Solving the Problem

Many ideas have been presented to lessen the impact of stress on the employee. Some have tried flex time, but found that flex time is not effective when there is much to learn on short notice (as legal matters require) or unforeseen issues arise (as happens in many life situations). To insure your employees are as stress free as possible, investigate the group legal plans provided by LegalShield. Your companies bottom line will thank you.

Richard Figley
Independent Associate

figleyr@legalshield.com e

614-395-2313 o 
www.800-DO-A-WILL.com