PPC Worldwide: the true cost of going AWOL - Ed Radkiewicz
Employee absenteeism is a universal problem, causing a major headache for industries internationally. In the UK, research by the Confederation of British Industry (CBI) suggests that 172 million working days are lost each year across the country through absence, costing businesses near to £13bn.
It is a similar story in the US with various studies from government sources including the US Census Bureau and the Bureau of Labor Statistics. According to the latter, US businesses lose an average of $74bn a year through absenteeism.
While the issue has always been of importance to organisations, there has been a recent increase in awareness of the costs of absenteeism, and employers are beginning to assess its true impact on every aspect of their business. As a result, the level of absences has dropped. Some put this down to the 'sentinel effect' - the theory that productivity and outcomes can be improved through the process of observation and measurement.
"According to several studies, including those by the CBI, absences have reduced over the last 20 years in terms of number of days off," says Ed Radkiewicz, global managing director of PPC Worldwide. "It used to be an average of 8.5 days off per employee a year. What's interesting is, because more employers are measuring absence and finding out why people are away, that figure has come down to 6.5 days."
Isn't this good news? "Not really," says Radkiewicz. "There are more white-collar workers in service sector industries compared with 20 years ago; there has generally been an increase in salaries. So the actual cost per employee per absence has gone up, even though the number of days has decreased."
Radkiewicz explains that the accelerated growth in the service sector means that companies will focus their attention on employees.
"Businesses are more dependent of people who carry intellectual property (IP) and one of the most enduring types of IP is human capital," he says. "It's not about someone who has made a tool and it doesn't matter who pulls the lever, it's the people who matter. I can't think of one industry now where the people aren't the most important thing."
Globally, human capital or 'talent' is seen as a company's greatest asset.
"Organisations realise they need to be more productive, as they have to be even more competitive today," says Radkiewicz. "What should companies look at? Many leaders of business say their best asset is their people. But when you question what they're doing about high absence levels or presenteeism [defined as an employee being at work but functioning at less than capacity] the answer is, hardly anything."
Radkiewicz explains that PPC Worldwide, which was acquired by OptumHealth in November 2009, has seen a surge in interest in its employee assistance programme (EAP) and well-being services. The company now has more than 20 million members globally and has an extensive portfolio of blue-chip and Fortune 500 clients.
"The number of employers investing in EAPs, work/life, well-being and personal development services is actually growing annually," he says. "When you look at companies four years ago, many didn't even think about this; now, more organisations are introducing programmes into
"This is what it comes down to: employers want to make sure that their employee is in work and when they are there, they're actually doing something. There is obviously a correlation between the two. Presenteeism often manifests itself into absenteeism; later on, the latter problem turns into someone leaving. If you can affect employees' productivity, you'll influence everything else. Those are the two driving factors when you're looking at why companies are
turning to EAPs."
Mind over matter
But why are individuals across the globe 'pulling sickies'? Obesity is an important driver of costs in the workplace; the US Centers for Disease Control and Prevention states that obese employees experience higher levels of absenteeism due to illness than employees of 'normal' weight. A report released in the last quarter of 2010 by a Duke University researcher reveals the cost of obesity among employees to be $73.1bn a year. Although obesity and other health problems contribute to high levels of absenteeism, mental health issues are the largest driver. In the UK, recent Health & Safety Executive statistics show that stress, depression or anxiety accounted for 13.8 million days lost annually, or 46% of all reported illnesses, making it the single largest cause of all absences attributable to work-related illness.
"Nearly half of absences are driven by stress," says Radkiewicz. "It's clear that the stress issue is becoming bigger; for example, ten years ago would you ever talk about stress over dinner? No. Now everyone is talking about it. It has become common practice."
PPC Worldwide focuses on well-being. Its services aim to improve the emotional and psychological state of companies' staff through the provision of advice, information and support. The organisation's services include in-house telephone and face-to-face counselling, work/life balance assessments and online resources including webinars.
"When you say 'health', people often assume you're talking about weight and nutrition," says Radkiewicz. "The mind is often forgotten. We're trying to get employers to think that well-being is a serious business strategy; consider it and you're going to get more for your money, it's as simple as that.
"In the same way as the wellness industry grew, companies are now beginning to realise that they should work with people before they have mental health issues such as depression.
"Happier workers do work better, and they show up. Studies have shown that even when an employee is ill, the ones that are not satisfied with their job stay at home while the ones that have high job satisfaction, even though they have the same illness, come to work. So, health does not necessarily govern absences."
Radkiewicz also believes that if firms look to affect their employees' well-being, their health will be better as a result.
"If the mind is sorted out, weight and nutrition issues often follow," he says. "If you're depressed you're not going to think about doing an exercise programme, you are probably going to do the reverse and eat lots of chocolate. If we can improve someone's mood then we can move along to disciplining and improving their wellness, thereby making them healthy."
As companies turn to well-being solutions, it has become clear that it not only affects productivity, but also saves considerable time and money.
"If a company introduces a weight-management programme and it's effective, it'll cost money in year one, and then for that drop in weight to reduce medical costs, it could take two or three years," Radkiewicz explains. "However, for the payback period in well-being, changing the mood or the motivation within a group of people, the impact on productivity could be next week. Employers find it interesting because when they invest the money they can see things happening in such a short space of time, which is always good."
Why are customers choosing PPC Worldwide? "One of our many benefits is there is high engagement," Radkiewicz says. "Rather than working on a few people, you have to work on at least 50% of the population, because if you're only making a difference to a few people then it's not going to improve the bottom line.
"In addition, we have a successful track record across multinational employers. We have also owned operations in the UK, US and Canada, and in emerging markets such as India.
" A lot of what we do has to be remotely delivered; very seldom now do you go to one factory and everyone is in there. Everyone is dispersed everywhere, they work internationally, so you have to be able to reach them."
While health and nutrition is important, focusing on employees' emotional and psychological well-being - trying to remove the reasons staff may be absent in the first place - affects a business immediately and for the long term. The good news is that absenteeism and presenteeism are manageable and the benefits that EAP solutions bring, including decreased costs and enhanced productivity, are particularly valuable in today's increasingly competitive business environment.