Press Releases

-- Rising mental health claims top list of concerns in 2005 Watson Wyatt Staying@Work survey --

TORONTO, September 29, 2005 – Employers are concerned about the cost of health-related absences from the workplace, but are not prepared to address the situation in a comprehensive, proactive manner, according to a new survey released today by Watson Wyatt Worldwide, a leading human capital consulting firm. The 2005 Watson Wyatt Staying@Work survey, which goes beyond the focus of previous years on absence and disability management to look at broader health and productivity issues, shows that while recognizing the impact on workplace productivity and the bottom line, most organizations fail to track the costs and causes of disability claims and are not yet prepared to tackle the issue head-on.

“The good news is that employers are more aware of the importance of the alignment between organizational health and workforce health,” said Joseph Ricciuti, National Director, Group Benefit and Health Care Practice, Watson Wyatt Canada. “However, the bad news is that relatively few employers have plans to measure absences or address the underlying problems related to productivity.”

Rising mental health claims, primarily related to stress, depression and anxiety disorders, were the top health and productivity-related concern for organizations, listed by 56 per cent of participants, followed by the aging workforce (54 per cent) and employee engagement (48 per cent).

The emergence of mental health claims as a key area of concern leads to unique challenges for employers, according to Bill Wilkerson, CEO of the Global Business and Economic Roundtable on Addiction and Mental Health. “We are not going to solve these problems through the narrow context of disability practices,” said Wilkerson. “Organizations must begin to understand how management practices impact employee health.”

Organizations fail to track rising disability costs
In spite of increased recognition of the toll that short- and long-term disability absences take on workplace productivity, most organizations continue to deal with the issue in a reactive, rather than a proactive way. Echoing results of earlier studies, the 2005 survey shows that the majority of companies do not measure the total costs associated with employee absenteeism. Just 35 per cent of companies measure short-term benefit costs per employee and only 30 per cent measure those costs as a percentage of payroll. For long-term disability benefits, only 35 per cent of organizations track cost per employee, while only 28 per cent look at the cost as a percentage of payroll.

And these costs are on the rise. While Workers’ Compensation costs decreased slightly in 2005 to 1.2 per cent of payroll costs from 1.3 per cent in 2002/2003, and reported short-term disability costs stayed at the same 1.9 per cent level, long-term disability costs rose 27 per cent to 1.4 per cent over the same period, due largely to the effects of an aging workforce and rising mental health claims. In addition to the direct costs of disability, such as insurance benefits paid to employees, absences often also lead to indirect costs such as overtime, replacement workers and lower levels of productivity.

Underlying causes remain a mystery
Despite rising costs, just 36 per cent of organizations said they track the reasons behind long-term disability claims and only 38 per cent said they do so for short-term disability. This leaves organizations without the information they need to identify potential problems before they arise.

“Organizations are focused on tracking lag indicators, such as absences, rather than the lead indicators which could provide better measurements to help reduce costs and improve productivity,” said Ricciuti. “The lack of this critical information is an obstacle to developing proactive strategies for total absence management.”

Organizations not yet planning to tackle problem
Most organizations have no plans to address the issue of rising mental health claims with tangible measures. Only 31 per cent of survey participants indicated that they are likely to implement programs to address the issue over the next one to two years. And only five per cent of organizations have any plans to deal with the social stigma of mental illness, which may keep sufferers from coming forward and prevent organizations from improving results.

“Mental health problems have both physical and psychological components,” said Claudine Ducharme, Disability Management Consultant, Group Benefit & Health Care practice, Watson Wyatt Canada. “While employers recognize the impact absences have on the workplace, they don’t yet fully perceive the connection to workplace practices and general environment.”

Other interesting findings in the 2005 Staying@Work study:

• "Presenteeism", describing employees who are able to come into work but are inhibited from optimal levels of productivity by ongoing health issues, has emerged as a new and growing concern. Identification of this issue is one of several indicators that companies are beginning to recognize that organizational health and employee health are fundamentally linked, and that a healthy front line leads to a healthy bottom line.

• Employee Assistance Programs (EAPS) and Employee and Family Assistance Programs (EFAPs), offered by 96 per cent of survey participants, are the success story of disability management practices. Respondents rated the programs as very effective in improving employee health and satisfaction and moderately effective in contributing to lower costs.

• Work-life balance was cited by less than half of survey participants (42 per cent) as an issue of concern.

About Watson Wyatt’s Staying@Work 2005 Survey
The Watson Wyatt 2005 Staying@Work survey analyses the opinions of human resources professionals from 94 Canadian organizations with 250 or more employees, representing more than 300,000 full-time Canadian employees in all major industry sectors. Included in the study are large organizations with 1,000 employees or more (52 per cent) and medium-sized organizations with 250 to 1,000 employees (48 per cent).

About Watson Wyatt
Watson Wyatt Worldwide (NYSE:WW) is a global human capital and financial management consulting firm. The firm specializes in employee benefits, human capital strategies, technology solutions, and insurance and financial services. Watson Wyatt has approximately 6,000 associates in 32 countries. In Western Canada, the firm serves clients from Vancouver and Calgary; in Central Canada from Toronto and Kitchener-Waterloo; and in Eastern Canada from Montreal. For more information, visit www.watsonwyatt.com/canada.