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Formula to Calculate Business Loss Due to Employee Health Disorder Proposed

Key business loss concerns related to employee health disorders were identified by stakeholders through a consensus process and lead authors Uegaki et al. to develop a method to estimate productivity loss costs. Those estimated losses can be calculated by:


·         Multiplying the duration (days or hours) by the degree (percent decrease) of decreased work performance to determine the volume of work loss; then multiply this volume by an average or function-specific (daily or hourly) salary

·         Adding the cost of co-worker overtime (if paid out)

·         Adding the salary costs of the replacement worker (only the differential cost)

·         Adding the cost of light duty (if the light duty tasks are not the original essential functions of the employee)

·         Subtracting to the hours of the health-compromised worker (in point 1) if co-workers spend normal workhours to assist the health-compromised employee

·         Adding to the hours of the health-compromised worker (in point 1) if co-workers take over some duties during normal workhours and it leads to the postponement of co-worker less urgent essential functions

·         Subtracting the insurance coverage payouts for sick leave (if the company receives reimburse for such costs and the insurance premiums are not raised)

·         Adding the cost of co-worker increased work load and pressure

·         Adding the cost of co-worker decreased productivity

·         Adding the cost of time spent facilitating the health-compromised employee’s return to work.   


The application of these variables would be affected by the status of the health-compromised employee: be it presenteeism, short-term absenteeism, or long-term absenteeism.


Study Design


A set of work productivity concepts was identified from published literature, existing guidelines, productivity measurement tools, and interviews with appropriate professionals.  After revision, 26 items were chosen:


·         Twenty-two associated with reduced productivity consequences that may occur from health-related reductions in employee work capacity (i.e. – duration of short-term absenteeism period)

·         Four associated with mechanisms with which negative productivity consequences can be compensated (i.e., worker able to catch up on tasks after recovery from illness)


A panel of 36 individuals was formed from five stakeholder groups – employers, employees, policy makers/insurers, occupational health professionals and researchers – representing a cross section of private and public enterprises.  Seventy-five percent of the participants had more than 10 years of relevant experience. 


Panel members individually assessed the 22 productivity items on a 6 point scale based on how relevant a lost productivity consequence was from a company’s perspective.  They also opined on the four items involved with how health–related productivity loss may be lessened by a given compensation.  Productivity items were considered “relevant” if the average score was from 3 to 5, or “not relevant” if the average score placed between 0 to 2.  The four compensation items were classified as “relevant” or “not relevant” based on the perspective of the panel member.


To achieve consensus, a second step was taken.  Answers were reported back to all panel members.  The group reevaluated a reduced set of items (items that were classified as relevant by 50 to 69 percent of the evaluators) for a second time using the same 6 point scale.  In this second round, each item was accompanied by five descriptors from the first round assessment:


·         A histogram of first-round ratings

·         The percentage of panel members who rated the item as relevant

·         The mean and standard deviation of the rating

·         Panel member comments

·         Respective panel member first round rating


Comments were assessed when an item was borderline “relevant” (67-69 percent) or “not relevant” (50-55 percent).


For the two rounds, the response rate of the panel members was 86 percent.  


Other Findings


Opinions varied between individuals within the same stakeholder group and across all groups.


Relevant work presenteeism issues included:


·         Duration of presenteeism period

·         Degree of decreased work performance

·         Amount of overtime hours by co-workers

·         Work taken over by co-workers during normal worktime


Relevant short-term absenteeism issues included:


·         Duration of short-term absenteeism period

·         Degree of absenteeism per day per period

·         Coverage by co-workers during normal workhours at the expense of less urgent essential functions

·         Amount of overtime hours by co-workers

·         Work taken over by co-workers during normal worktime salary of the replacement workers


Relevant long-term absenteeism issues included:


·         Duration of long-term absenteeism period

·         Duration of absenteeism per day per period

·         Decreased productivity of co-workers who are dependent on the ill employee

·         Amount of overtime hours by co-workers

·         Coverage by co-workers during normal workhours at the expense of less urgent essential functions

·         Time spent facilitating return to work of ill or injured worker

·         Salary of replacement worker


Study Limitations


Author identified reservations affecting the interpretation of this research were:


·         The broad composition of the panel members may have lead to an over generalization of identified factors

·         The findings are from a select group of Dutch experts and may have limited application in other countries

·         Consensus may have produced a diluted version of reality


Article Title: Consensus-based findings and recommendations for estimating the costs of health-related productivity loss from a company’s perspective


Publication: Scandinavian Journal of Work, Environment and Health 33(2): 122-130, 2007


Authors: K Uegaki, M C de Bruijne, J R Anema, A J van der Beek, M W van Tulder and W van Mechelen

This article originally appeared in The Ergonomics Report™ on 2007-06-06.