A new paper titled Ill health and distraction at work. Costs and drivers for productivity loss and authored by Piotr Bialowolski, Eileen McNeely, and Dorota Weziak-Bialowolska of SHINE and Tyler J. VanderWeele of the Human Flourishing Program at Harvard University, estimates the cost of inefficiencies at work with emphasis on their internal causes, i.e., sick-related absenteeism and distraction at work.
Employer-sponsored health insurance is the most widely spread form of medical coverage in the United States. Substantial portion of the premiums’ costs is covered by employers, thus contributing to labor costs for organizations. Although worker health and well-being have become increasingly important for businesses, most of them do not see a direct link between their health and well-being investments and work output and quality of work of their employees.
Results of the primary analysis indicated that annual productivity loss to the organization amounted to approximately $300 m. Distraction contributed to 93.6% of the annual productivity loss of the US manufacturer, while only 6.4% resulted from health-related absenteeism, implying that distraction at work cost this organization almost 15 times more than health related absenteeism, reducing the overall return on sales by over 6 pp. The secondary analysis corroborated the dominance of distraction induced productivity costs over the cost of health-related absenteeism.
Evidence from the regression analysis conducted on cross-sectional data indicated that regardless of the type of work, work engagement and auditory privacy were evidently highly bound with productivity loss. For manufacturing workers, job security was also negatively correlated with productivity loss, while for office employees, better social relationships and lack of work-family conflict were positively associated with productivity.
Despite being based on two case studies, these results are informative of the magnitude of distraction and health related productivity costs. They also show that workers with deficiencies in their well-being at work present a substantial opportunity for growth to companies in terms of reduced efficiency.
To read the full paper, click here.