The cost of becoming sick

Last year in Sweden, estimates show that the aggregated societal cost for sick leaves in the country amounted to a whopping 62 000 000 000 SEK (almost 7 billion US dollars). Almost half of the sick leaves reported were connected to mental illness, clocking in at 31 billion SEK.  Swedish companies and organizations are paying an individual cost of 100 000 SEK (11 000 US dollars) in lost productivity for each long-term sick leave according to one study, but the actual cost of becoming sick is so much higher, both for the organization and the individual. This relatively small sum of a 100 000 SEK does not include the cost of increased administrative work, reorganizing workload, the recruitment process of a replacement or the adjustment of workplace issues. Not to mention both the actual and potential cost of the mental strain on colleagues that occurs whenever a member of the team gets sick. Naturally, the cost increases as the position involved get more advanced. In other words, it is (financially) more expensive to replace white-collar workers than blue-collar workers.

The true cost for most companies that suffers from employees falling into long-term illness, is one of the most overlooked and underestimated factors in business strategy. There are many reasons for this, both of economic and cultural nature. For one, it is intrinsically hard to measure the true cost and to create KPI: s that can help evaluate business strategies connected to mental and physical wellbeing of personnel. Another reason is the cultural taboo connected to talking about economic costs connected to people feeling mentally unwell. Even the writer of this article, which is explicitly targeting the economic side of mental illness, feels obliged to highlight social aspects of individuals becoming sick. Hence, management teams through CFO: s and adherent economy functions have failed to soberly address the true costs and benefits connected to the wellbeing of the company’s human resources.

A new workplace reality for breakfast

It is time for companies to wake up and smell the coffee in this frowzy room of ignorance, which fortunately enough, many organizations are right now doing. They are somewhat panicky getting out of bed and scrambling in all kinds of innovative, creative and sometimes stupendous manners to mitigate the ever-increasing costs of mental illness. There are so many features of modern-day companies that was almost unheard of just 15 years ago. Work-time sanctioned work-out for office workers, free healthy lunches, mindfulness sessions, light therapy rooms (Maybe more of a Swedish feature than a French one), and “bring your pet to work-day”. Of course, combating mental illness and sick leaves are not the only reason as to why companies are doing all these things. Employer branding, talent acquisition and retention is a real big thing right now as the competition for competent people is fierce. But what is talent retention, if not retaining your hard-earned and precious personnel in the face of looming long-time sickness?

I am not questioning the amount of efforts companies are putting in to reduce and prevent mental illness on workplaces today, but I am questioning the sincerity and severity connected to many of them. Many organizations are still treating extensive preventive measures to mental illness as a nice-to-have instead of a need-to-have, but simultaneously spending a lot of money in rehabilitating efforts. From the company/employer perspective (and the employee perspective) it seems like spending your money on successful preventive measures would be more desirable than spending it on rehabilitation programs.

Capitalism – Both the suspected villain and the potential hero of the story

The staggering amount of personal and individual tragedies that resides behind these economic figures is a brutal testament to an increasingly obvious shortcoming of our modern western society, in Sweden and many other countries alike. Many would-be suspects have been accused of being the elusive villain of this story, where I would say capitalism have been one of the most prominent figures. Our unquenchable thirst for riches, status and consumption have turned us into hollow and unhappy shades of a distant past that stresses and depresses as we stalk the corridors of our workplaces, eventually crumbling under the pressure of keeping up with self-invented or imaginary demands for results and become doomed to mental illness, long term sick leave and agony, so the story goes.

I have no neo-libertarian illusions that capitalism have played no part in creating these depressing numbers (after all failure is a big part of the capitalist game, no winners without losers), but I certainly do not hold capitalism as the sole perpetrator to this crime. While money or the lack there-of is certainly the cause of a lot of stress for many (if not all) individuals and collectives in modern day society, there are several other accomplices involved in the heist against the harmony of our lives. Relations, genetics, trauma experiences etc, are all examples of factors that can come into play in determining an individual’s long-term mental health.

However, not all factors contributing to an individual’s mental health are equally subjective to an employer’s ability to influence, at least not on an economically feasible level. In a capitalist society it makes sense that a profit driven company would only spend money on keeping the health of their employees if substituting sick employees with new healthy employees is more expensive than retaining your old ones. Today it is definitely a lot more expensive than it used to be for companies to adopt a callous assembly line strategy towards their workforce, where you would just replace a defective “part” with a functioning one (for above mentioned reasons and more).

So, even if you are saddened by my somewhat cynical depiction of capitalist companies and society, you can take comfort in the fact that this cynical capitalist scenario actually holds a lot of promise in terms of helping us become both physically and mentally healthier. From a purely cost-centric perspective it then makes a lot of sense for companies and organizations to invest heavily in the health of their employees, because it is simply too expensive to lose talent and competence today.

The best way forward

As mentioned, this is slowly dawning on companies and as a response they are experimenting with methods and tool to enhance mental health, loyalty and engagement within their employee community. In an experimental phase it is only natural that you are going to get a multitude of different prototypes, where some are better than others at achieving results. No organization has a universal answer to the problem. Yet. My personal reflection so far is that there seems to be no effective short cuts for companies to achieve true mental health, loyalty and engagement within their workforce. Flashy, extravagant, superficial and expensive investments in isolated parts of employees work life or workplaces at best seems to achieve short-term results. What seems to be working more efficiently is a holistic and comprehensive strategy connected to talent and competence retention, but many organizations muddle this insight with implementing comprehensive and complex solutions, which is not necessarily what is required or even sought after by employees.

I would suggest that one of the cheapest and most effective long-term methods for companies to retain talent and competence, build employee-loyalty and engagement while also safeguarding the physical and mental health of their human resources, is somewhat surprisingly to be found in the world of professional sports. By submitting to unforgiving capitalist competitive conditions, professional sports organization have efficiently created a hotbed for empowering individual and collective mental health that private and public businesses alike could (and should) draw from when building their organization. I will elaborate on this interesting possibility in the next chapter, thanks for following me this far!

Olle Fagerstedt