The astronomical costs of absenteeism and presenteeism

Investing in getting staffers healthy is never an easy sell, but new research may convince even the most hard-nosed CFO or upper-level exec.

A new study has found that poor health costs the U.S. economy an eyeball-popping $576 billion each year.

But what’s most alarming and relevant for HR pros is that almost 40% of those costs — about $227 billion — is due to lost productivity associated with poor health.

That manifests itself in two ways:

• absenteeism due to illness, and
• presenteeism — when employees come to work but don’t perform to their potential because they’re sick.

That’s all according to a new study from The Integrated Benefits Institute, a nonprofit health and productivity research firm that represents Google, Microsoft, Wells Fargo and other employers as well as unions, universities and municipalities.

The rest of the $576 billion total comes from two other areas:

• workers’ compensation and wage replacement due to illness (about $117 billion), and
• medical treatment pharmacy-related costs ($232 billion).

Get out more than you put in

Further, Cornell University economist and researcher Sean Nicholson stated, “The literature shows that employers can save an average of $3 for every $1 they invest in improving their workers’ health.”

Recent research puts that number even higher than Nicholson suggests.

For every dollar invested in wellness, employers see an average savings of $5.81 due to improved employee health and reduced medical claims.

That’s according to an analysis of 56 published studies on work-site health promotion programs conducted by American Journal of Health Promotion.