Tag Archives: absenteeism

An Overlooked Risk in Workers’ Comp

Sleep deprivation is an issue that is often overlooked, yet frequently the cause of decreased productivity, accidents, incidents and mistakes that cost companies billions of dollars each year, reports Circadian, a global leader in providing 24/7 workforce performance and safety solutions for businesses that operate around the clock.

Often, the experts at Circadian say, employers are unaware of the impact fatigue or sleep deprivation is having on their operation until a tragic accident occurs. Only then do managers ask the question: “What happened?”

Sleep deprivation is much more dangerous than you might realize. It’s not just annoying, like when an employee snoozes in a meeting or yawns during a conversation. Here are 10 real dangers associated with the overlooked problems in a sleep-deprived workforce:

  1. Decreased communication: When workers are tired, they become poor communicators. In one study, researchers noted that sleep-deprived individuals drop the intensity of their voices; pause for long intervals without apparent reason; enunciate very poorly or mumble instructions inaudibly; mispronounce, slur or run words together; and repeat themselves or lose their place in a sentence sequence.
  2. Performance deteriorates: Performance declines frequently include increased compensatory efforts on activities, decreased vigilance and slower response time. The average functional level of any sleep-deprived individual is comparable to the 9th percentile of non-sleep-deprived individuals. Workers must notice these performance declines, right? Not quite. In fact, sleep-deprived individuals have poor insight into their performance deficits. Also, the performance deficits worsen as time on task increases.
  3. Increased risk of becoming distracted: Sleep-deprived individuals have been shown to have trouble with maintaining focus on relevant cues, developing and updating strategies, keeping track of events and maintaining interest in outcomes and, instead, attend to activities judged to be non-essential. In fact, research suggests that there is a symbiotic relationship between sleep deprivation and attention-deficit hyperactivity disorder (ADHD) because of the overlap in symptoms.
  4. Driving impairments: Because of federal regulations, the trucking industry is well aware of the driving impairments associated with sleep deprivation. However, plant managers are unaware of the ways in which sleep-deprived workers may be dangerously operating machinery (e.g. forklifts or dump trucks). In fact, 22 hours of sleep deprivation results in neurobehavioral performance impairments that are comparable to a 0.08% blood alcohol level (legally drunk in the U.S.).
  5. Increased number of errors: The cognitive detriments of sleep deprivation increase concurrently with a worker’s time on a given task, resulting in an increased number of errors. These errors include mistakes of both commission (i.e., performing an act that leads to harm) and omission (i.e., not performing an expected task), which can wreak havoc at any work facility. Errors especially are likely in subject-paced tasks in which cognitive slowing occurs and with tasks that are time-sensitive, which cause increases in cognitive errors.
  6. Poor cognitive assimilation and memory: Short-term and working memory declines are associated with sleep deprivation and result in a decreased ability to develop and update strategies based on new information, along with the ability to remember the temporal sequence of events.
  7. Inappropriate moodines: Inappropriate, mood-related behavior often occurs in outbursts, as most sleep-deprived individuals are often quiet and socially withdrawn. However, a single one of these outbursts can be enough to destroy the positive culture of a work environment and cause an HR nightmare. These behavioral outbursts can include irritability, impatience, childish humor, lack of regard for normal social conventions, inappropriate interpersonal behaviors and unwillingness to engage in forward planning.
  8. Greater risk-taking behavior: Brain imaging studies have shown that sleep deprivation was associated with increased activation of brain regions related to risky decision making, while areas that control rationale and logical thinking show lower levels of activation. In fact, sleep deprivation increases one’s expectation of gains while diminishing the implications of losses. What does this mean for your workers? Sleep-deprived workers may be making riskier decisions, ignoring the potential negative implications and taking gambles in scenarios in which the losses outweigh the benefits.
  9. Inability to make necessary adjustments: Flexible thinking, preservation on thoughts and actions, updating strategies based on new information, ability to think divergently and innovation are all hurt by sleep deprivation. A worker may be unable to fill a leadership role on request when sleep-deprived, resulting in a frustrated management team.
  10. Effects of sleep deprivation compound across nights: Four or more nights of partial sleep deprivation containing less than seven hours of sleep per night can be equivalent to a total night of sleep deprivation. A single night of total sleep deprivation can affect your functioning for as long as two weeks. To your brain, sleep is money, and the brain is the best accountant.

According to Circadian, when you have sleep-deprived or fatigued workers, productivity levels and quality of work will be compromised. Furthermore, you create an environment where it becomes not a matter of if your workplace will have an accident or incident but a matter of when, and to what magnitude.

Sleep deprivation is no laughing matter, no matter how frequently our society treats the issue light-heartedly. Eventually, our biological drive to compensate for sleep deprivation wins, and the loser might be your workers, your employer or even you.

The expectation is that employees return to work in January feeling recharged and ready to perform their best. In reality, one in every five workers is sleep-deprived, and those who sleep poorly are 54% more likely to experience stress in their job, according to a new study from international employee health and performance organization Global Corporate Challenge (GCC).

The report, “Waking Up To the Sleep Problem Every Employer Is Facing,” also found that 93% of poor sleepers were more likely to display workplace fatigue, a common symptom of excessive daytime sleepiness (EDS) – the condition proven to increase risks of absenteeism, accidents and injury in the workplace.

“Independent research undertaken on GCC participants in the 2014 challenge demonstrates that sleep improves with increased step count in a linear fashion,” said Dr. David Batman, director of research, FCDP. “There are significant increases in productivity and reduction in fatigue and stress levels at work and home. Extrapolation of these results leads to an obvious conclusion that simple exercise improves sleep, and the combined result will be an increase in personal and business performance.”

The results come from the health and performance leaders’ first series of GCC Insights papers, based on aggregate data drawn from employees in 185 countries. With more than 1.5 million people having now been through the program, the data sample is one of the largest, most diverse of its kind.

This GCC Insights paper also provides practical recommendations for employers who recognize that their workers’ mental and physical health inextricably is linked to business success – a realization that, for many, signals a need to rethink outdated well-being strategies in exchange for a longer-term commitment to employee health.

“The cost of poor sleep habits among employee populations has been grossly underestimated; it is having profound consequences for productivity and health,” said Glenn Riseley, founder and president at the GCC. “Luckily, enlightened employers are now changing their cultures so that sleep is no longer seen as a luxury but as a priority.”

Why Invest in Suicide Prevention?

While no detailed and independent data exists on the cost of suicide and suicidal behavior to the Australian economy, every death does have a financial impact. A cost estimate produced by Mendoza and Rosenberg in 2010 proposed a plausible estimate to the Australian economy of $17.5 billion per year. This figure included estimated productivity costs.

Research conducted by SuperFriend and IFS Insurance Solutions estimated that, in 2012, death claims paid out in Australia by group life insurers in superannuation where suicide was the “known” cause of death amounted to more than $100 million. For some SuperFriend partner funds, suicide death claims account for more than 20% of their total death claims administered.

There is a relationship between stress and work-related suicide. While suicidal behavior is an extreme outcome of stress, significant productivity gains are to be had by managing workplace stress. Medibank private-commissioned research found that stress-related “presenteeism” (showing up at work but at far less than 100% capacity) and absenteeism cost the Australian economy $14.8 billion a year, with 3.2 days per worker lost each year because of stress.

Work-related mental stress claims are the most expensive form of workers’ compensation claim, as they are often associated with long periods of absence from work. Given that only 70% of workers who report that they have experienced work-related mental stress actually apply for workers’ compensation, the potential cost of worker stress is much higher.

Measures taken to reduce or eliminate work stressors will contribute to suicide prevention while providing the additional benefit of lowering costs.

Suicide in Australia

Suicide prevention is a substantial issue for Australian society. Official figures put the lives lost from suicide at about 2,300 people each year in Australia (population: 23 million); the true figure is more likely around 3,000 deaths each year. About 75% of these deaths are among males. Each death gravely affects families, friends and communities.

Suicide becomes more prevalent in adolescence and rises with age, peaking at around 45 years old in men and 40 in women, then declines, before becoming more prevalent again in those over 80. Most deaths by suicide in Australia are in people of working age (data is not routinely collected on employment status at the time of death).

It is estimated that approximately 2.1 million adults in Australia have had serious thoughts about ending their lives, and 500,000 adults have made a suicide attempt. Approximately 65,000 suicide attempts occur every year.

Work and Mental Health

Nationally, about 12.3 million people are in the labor force, with 11.6 million employed at December 2012. Roughly speaking, a third of these will be self-employed or working in small businesses of fewer than 20 people, a third will be working in medium-sized businesses of 20–199 people, and a third will be working in large businesses of 200 people or more.

The World Health Organization (WHO) estimates that adults spend a third of their waking hours at work. The workplace provides a unique opportunity to reach working age adults and provide key health information and intervention.

The impact of mental health problems on work functioning and performance is at least comparable to the impact of physical injury.

Mental health problems in the workplace typically manifest themselves as performance issues, such as:

  • Increased absenteeism
  • Reduced productivity
  • Increased employee turnover
  • Increase in short- and long-term disability days
  • Increased disability claims

Employers are increasingly recognizing that mentally healthy staff are more productive and that there are cost benefits to addressing mental health issues in the workplace.

Responding to Needs of the Aging Workforce

Understanding the Issue

According to the U.S. Department of Labor, over the past decade, workers in the 45 year-old and over category have increased 49% and now make up 44% of the workforce. The age group over 55 has grown to 21% of the workforce. As a glimpse into the future, a 2013 Gallup poll revealed that 37% of working age respondents indicated they expect to work beyond age 65. Gallup reported that only 22% responded the same way in 2003 and only 16% in 1995. Given this projected “aging” of America’s workforce, are America’s employers prepared to effectively address the associated increase workers compensation claims?

As the population pyramids below illustrate, the aging of America is not a short-term issue. Note the diminishing dependency ratio of young to old, from 1980 to 2030 as shown in Figure 1.

Screen Shot 2016-01-16 at 11.37.02 AM

The Future is Now

The time to discuss these trends as a “having potential impact in the future” has actually passed. We need to re-orient our thinking of the aging workforce as a new constant and as “today’s reality”. The medium age of some industries is as high as 55 (agriculture) indicating a need to act.

Screen Shot 2016-01-16 at 11.37.39 AM

Table 1: Percent of workforce over 45 years of age, by industry.

At Aon, we have been studying and quantifying the impact of the aging of America on our clients. Based on our market insight, we have developed prescriptive solutions to support our clients’ needs. As you can see from the table below, the age of the workforce and population within each age band varies significantly and is in part why all employers may not experience a direct impact of this issue. Based on our client research, we believe it is imperative to quantify the impact of this issue, which in turn provides key input and metrics for helping mitigate the problem. As one client put it when shown the injury trend related to an age band of workers and type of injury driving a considerable portion of their loss time injuries, “Are you saying that by prioritizing the identification and potential for shoulder injuries I could get more return on investment from my ergonomics efforts?” The response was a simple but definitive, “yes”.

The Impact on Work-Related Injuries

Over the past three years, Aon casualty specialists have been monitoring the impact of work-related injuries to aging workers by examining workers compensation claim costs of our clients. From this research, we have identified some rather compelling trends.

One of the most concerning trends is the “current” impact on the cost of workers’ compensation. We studied $2.5 billion in workers’ compensation claims from 2007 through 2012 and found a consistently higher average cost for workers’ compensation claims for older claimants across all industry groups. For example, the 45- to 55-year-old claimants in the manufacturing industry group’s average claim cost was 52% higher than 25- to 35-year-old claimants. This trend varied in degree by industry, but only by the pitch of the slope, leaving us to look deeper into the issue and attempt to identify what was driving this cost. This issue has been under study for quite some time.

Heather Grob, Ph.D. and senior economist with Washington State Department of Labor and Industries, published materials on the concern in 2005, stating “that a random sample of Washington workers’ compensation claims from 1987-89 found that workers over age 45 were at risk of longer term disability” (Cheadle et al 1994). The study concluded that older age is the most important and consistent influence on duration of disability. While we are not breaking new ground on identifying the issue, what seems to be missing is the socialization and acceptance of the impact as well as an understanding of what we should be doing about it.

Screen Shot 2016-01-16 at 11.38.11 AM

The Birth of Ageonomics in Workers’ Compensation

In 2011, we at Aon coined the term Ageonomics to address the phenomenon of the aging workforce and the strategies that can help address increased costs and worker safety. Vicki Missar, Aon board-certified ergonomist, defines Ageonomics as the scientific discipline concerned with the interaction among aging humans and other elements of the system within which they work.

Ultimately, Ageonomics is Aon’s professional service that applies theoretical principles to designing age-specific systems to optimize the wellbeing of the aging worker while improving overall system performance. Aon’s Ageonomics practice leverages the differentiated expertise of professionals spanning such disciplines as ergonomics, wellness, benefits and safety to deliver comprehensive and very powerful solutions to the aging workforce challenges most employers are facing.

Ageonomics calibrates the absenteeism trends for the aging workforce, regardless of the bucket within which they fall. Aon analyzes the trends, from short-term disability (STD), long-term disability (LTD), workers’ compensation (WC), casual absences (CA) and Family Medical Leave Act (FMLA) absences to understand claim volume, average claim duration, average cost per lost day, average cost per claim, total costs and the ultimate cost projections. In addition to the financial output, Aon calibrates the leading absence causes by program type to understand what is driving the aging employee absenteeism. This insight provides clearer diagnosis on which programs are affecting the organization the greatest and which absenteeism causes are being reported with the most frequency. Aon also reviews the internal programs to understand how the framework is aligned with the organization’s aging worker initiatives. Organizations can then develop a targeted, age-specific strategy to help not only prevent or reduce the duration associated with the respective absences, but implement preemptive programs to help keep aging workers healthy and optimize their individual productivity.

Screen Shot 2016-01-16 at 11.38.51 AM

Changes Associated with Aging

The physiological changes associated with aging occur from the moment we are born. Fast forward to age 45 and older, and the body begins to change more significantly. Depending on primary factors such as health, fitness and genetics, all of us age differently. Researchers in Finland (Ilmarinen, et. al. 1997) found a decline in what they called “workability,” with 51 years of age being the most critical point at which workability started to decrease. In addition, researchers noted that workability was shown to have a high predictive value for work disability (e.g. lower workability equals higher disability days). This means that we must now focus on the individual to understand age-related risk factors, modifiable and non-modifiable, to really address the challenges facing the aging workforce.

Physiological Changes That Can Affect Work Performance

With age comes decreased muscle strength, lower dexterity, reduced fitness level and aerobic capacity, poorer visual and auditory acuity and slower cognitive speed and function, to name a few. All of these changes can have a dramatic impact on the aging worker. For example, aging is related to the loss of muscle mass beginning at the age of 50 but becomes more dramatic at the age of 60 (Deschenes 2004). In addition to physical changes, older workers are at increased risk of disease and other ailments. These include the increased risk of obesity associated with aging, diabetes, heart disease, cancer and reduced fitness level, among others. Thus, prevention initiatives are needed to support the aging worker so that an effective, comprehensive strategy is developed. For example, if we know that muscle strength declines with age, organizations need to consider implementing safety, ergonomics and wellness programs to help build individual strength while working to reduce manual lifting, which could potentially result in injury or absence.

In the course of Aon’s Ageonomics diagnostic research, the two leading loss causes of injuries to knees and shoulders stem from strain/sprains and slip/trip/falls that can directly be attributed to reduced mobility and reduced strength, both of which can be related to an older physiology. By understanding the physical changes of an aging human and linking these changes to loss-producing trends in the data, we can develop a thoughtful strategy for increasing workability and reducing age-specific exposures in the workplace.

Screen Shot 2016-01-16 at 11.39.57 AM

Rethinking the Work Environment

After some research and discussions with other benchmarking groups (NCCI and IBI), we can begin to make some educated assumptions surrounding drivers of these increased costs. What is of interest to Aon’s Ageonomics practice is how physical changes can influence solutions to reduce injury risk and prevent absenteeism. With onset of saropenia — loss of muscle mass — comes decreased strength. Many physically demanding jobs do not factor this into the equation when developing production standards or production demands for the workforce. By age-adjusting the demands by a specified factor, for example, we can not only reduce the risk of injury but improve the long-term workability and productivity of the workforce in general.

As part of Aon’s Ageonomics methodology, each safety, ergonomics, benefits, wellness, human-resource program aligns strategies and their resulting activities around the needs of the aging worker. The ultimate objective is to develop strategies geared toward optimizing the performance of the aging worker. This can only be done when each program is assessed and refined for the aging workforce (Table 2). For example, a recent study (Ruahala, et. al. 2007) found a linear trend between increasing workload and increasing sick time among nurses. First, we know that in health care and social assistance, musculoskeletal disorders (MSDs) make up 42% of cases and have a rate of 55 cases per 10,000 full-time workers. According to the Bureau of Labor Statistics, this rate was 56% higher than the rate for all private industries and second only to the transportation and warehousing industry. Second, given that 55% of the USA nursing workforce is age 50 or older (NCSBN &The Forum of State Nursing Workforce), conducting an Ageonomics assessment may be an important part of a strategic program to reduce sick leave, workers’ compensation injuries and overall absenteeism. Third, solutions cannot be one-dimensional, i.e., simply purchasing patient-handling equipment and hoping that will remedy the situation. Strategies must encompass the total health and wellbeing of the worker for optimal success, including a thorough review of the programs outlined in Table 2.

Screen Shot 2016-01-16 at 11.40.39 AM

last

 

Rethinking Wellness As the U.S. workplace continues to age, it is critical to rethink wellness programs. Berry et. al. (2010)5 state in the Harvard Business Review:

“Wellness programs have often been viewed as a nice extra, not a strategic imperative. Newer evidence tells a different story. With tax incentives and grants available under recent federal health care legislation, U.S. companies can use wellness programs to chip away at their enormous health care costs, which are only rising with an aging workforce.”

The article points out six pillars of an effective wellness program that can help significantly lower healthcare costs. As part of Aon’s Ageonomics practice, we analyze these pillars, including leadership, program quality, accessibility and communication of not only wellness but safety, ergonomics and other programs, to understand gaps for aging workers. By reviewing age-specific data and wellness program statistics, we can probe deeper and ultimately develop strategies to better align these programs for the aging worker. Researchers at Harvard found that participants in wellness programs are absent less often and perform better at work than their nonparticipant counterparts. Thus, structuring a wellness program around aging workers can become a way for organizations to not only retain aging workers but ensure their workability does not decline to levels that result in disabilities and workers’ compensation claims.

Conclusions

As with any workplace program, measuring success includes not only healthcare costs, but workers’ compensation costs, safety program incident rates, absenteeism and turnover rates, among other indicators. It becomes essential to align traditional silo programs and produce a synergistic, thoughtful approach to optimize any program touching an aging worker. For a copy of the full Aon white paper on which this article is based, click here.

Wellness Programs Take a Punch to the Gut at PepsiCo

The report in the journal Health Affairs about PepsiCo marks the first time a major organization has been found to be losing money in a wellness program (not including the ones that my colleagues and I are exposing as frauds, like British Petroleum and the Nebraska state employee program).  Highlights are as follows:

  • Disease management alone was highly effective, with an ROI of almost 4-to-1;
  • Wellness alone was a money sink, with each dollar invested returning only $0.48 in savings;
  • The wellness savings were attributed to an alleged reduction in absenteeism, as reported by participants.  There was no measurable reduction in health spending because of wellness.

There are many reasons to think that this result, as unimpressive as it is, overstates the value of the program.  For instance, the report doesn’t measure the time that employees spent completing the forms and getting their blood drawn.  Nor does it include staff time or the fees to Mercer, which advised PepsiCo to launch the program. Nor does the report take into account the bias caused by participants having a more engaged mindset than non-participants, or the self-reporting of data for absences, the only slightly bright spot in the report. One suspects that the author, RAND’s Soeren Mattke, pulled some punches for political reasons, to avoid having PepsiCo suppress the entire study.

So where does this result leave the wellness industry, and by implication brokers who are earning commissions from it?

First, wellness only has one supporter left in Washington, DC, the Business Roundtable, an association of chief executives of large U.S. corporations. Its vice president was quoted in Reuters as saying Roundtable members are “as enthusiastic as they have ever been about these (workplace wellness) programs,” adopting them to boost employee morale and improve recruitment.  One irony is that the Business Roundtable’s Health Committee is chaired by a CEO in the casino industry, an industry which has steadfastly defended its right to expose its employees to more second-hand smoke than all other industries combined.   Hence, one suspects an ulterior motive for the Roundtable’s support, such as being able to control employee behavior and increase employee share of premiums.

The other irony is that employees usually resent and sometimes revolt against programs designed to “boost their morale.”

Second, no wellness program has ever saved any corporation a nickel.  The simple sleight-of-hand of comparing participants to non-participants and/or just measuring people who were high-risk to begin with while ignoring those whose risk factors increase will show savings where none exist.  Indeed, how could it be possible to improve health, let alone generate savings by improving health, by doing the opposite of what guidelines recommend, which is what wellness companies do.  For instance, the United States Preventive Services Task Force recommends screening asymptomatic people only once every five years (except for blood pressure), whereas almost all wellness vendors insist on annual screenings.  The literature is very clear that annual checkups for asymptomatic adults are expensive and counterproductive, and yet many wellness programs are measured by how many people they send to the doctor.

Third, there is more bad news on the way.  This Health Affairs article is a start, sort of like busting Badger or Skinny Pete, but there is some investigative work that will be revealed in the weeks ahead that, to continue the analogy, will be more akin to blowing up Gustavo Fring’s whole operation, exposing wellness as possibly the biggest scam ever to be played by the healthcare industry on corporate America.  (This may seem like a strong statement, but if you doubt it, simply bookmark this column for a month or two.)

Brokers and consultants would therefore be well-advised to start backing off from these programs.  The short-term commission sacrifice will more than pay for itself in long-term client retention.   Note that I said, “back off,” not “run away.”  Your clients have in many cases staked their reputations on wellness, advocating –- possibly with your help — for steadily larger budgets for programs and especially incentives.  You need to step back from the ledge together, keeping in mind the amount of political capital they’ve invested.  They relied on you to take them here.  Now they will need to rely on you to bring them back.

Editor's Note: See also our thought leader Tom Emerick's take on the PepsiCo news.