depression is eroding canadian productivity... and hr can do something about it! lou pike, ph.d /...
TRANSCRIPT
Depression is Eroding Depression is Eroding Canadian ProductivityCanadian Productivity
. . . and HR can do something about it!
Lou Pike, Ph.D / Chris Bonnett, MHSc
cogent consulting groupMarch 21, 2001
Today’s Goals
• To make the business case
• To sound the alarm
• To offer a root cause approach
• To suggest a central role for HR
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SOUNDING THE ALARM
The Economic Impact of Depression in the Workplace
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Sounding the Alarm
• Leading cause of Long Term Disability• Typically 3 of top 10 Rx drugs
– Canadian study showed claimants using anti-depressants had largest share of drug costs, 23% of total!
• 1.4 million Canadians– affects 4% of Ontarians ages 15 to 64– one-third fail to seek treatment – only 6% - 10% properly treated
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Sounding the Alarm
• 10% in US have Major Depression episode– Cost is US$43 billion, 55% of this from lost productivity
• Average Length of Disability– Major Depression = 40 work days
– Non-mental Health = 29 work days
• Costs– US $8,709 vs. US $2,059 / person / year (1997)
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Sounding the Alarm It’s a Women ’s Health Crisis
• 6-7% of women of prime working age are depressed
• The average woman who requested EAP services with depression symptoms was between 27 and 46. (JOM, V. 36, n 9, 09/94)
• The ratio is 2:1 women/ men• By the year 2005, for
every 10 men in the force there will be 7 women
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Sounding the Alarm
Group benefits - 13% payroll
Absenteeism - 7.8 days / 3% payroll
“Presenteeism” - 4.3 hours per week / 11.5% payroll
Tax waste - 40% of health care funding is inappropriate.
Sources: KPMG (1999); Statistics Canada (1998); Burton, Conti et al, JOEM (1999); Macleans Health Report (1999)
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Sounding the Alarm
• 500 employees– normal distribution; payroll $17.5 million
• Costs*– typical benefit package; WSIB– absence; turnover; productivity loss
Costing Details: Disability: 0.50 STD + 1.0 LTD + 0.50 WSIB = 2.0% - Absence: 0.50% - Productivity: 0.325 x 0.05 = 1.60% - Multiplier: 4.1% x 1.5 = 6.2% - Drugs: 0.10% - 6.3% x $17.5
mm = $1.1 million. All percentages are of payroll.
Total:Total: $1,102,500$1,102,500
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The Impact of Depression The Impact of Depression and Stressand Stress
Severing the Service-Profit Chain
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What Is Depression
What It Is*
‘A spectrum of mood disorders that range in severity from major depression and bipolar illness . . . to brief depressive reactions’.
What It Isn’t
• Passing moods
• Personal weakness
* International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM)cogent
Symptoms of Depression
• Persistent sad, empty or anxious mood.
• Loss of interest or pleasure in usual activities.
• Fatigue, decreased energy.• Sleep disturbances.• Eating disturbances.• Chronic aches and pains.• Increased accidents
• Difficulty concentrating, remembering, making decisions.
• Feeling hopeless or pessimistic.
• Guilt, worthlessness.• Thoughts of death or
suicide.• Increased irritability.• Excessive crying.• Substance abuse.
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Causes of Depression: Individual Characteristics and Behaviour
Imbalance of brain chemicals called neurotransmitters
Various physical diseases or illnesses
Negative thinking patterns
Family history of depression
Difficult life events
Certain medications
Frequent and excessive alcohol consumption
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Causes of Depression:Organizational Characteristics
Technological change
Organizational and management practices
Job structure, design and fit
Source: Institute for Work & Health, 2000.
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“The hurried and worried organization”
Depression and Stress
• Time Stressors– Work overload– Lack of control
• Encounter Stressors– Role conflicts– Issue conflicts– Action conflicts
• Situational Stressors– Unfavourable working
conditions– Rapid change
• Anticipatory Stressors– Negative expectations– Fear– Poor reward
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How Stress Affects Managers
• Stuck: Demand a single, standard, familiar approach. Less able to generate creative solutions.
• Rigid: Intolerant of ambiguity.• Shortened Time Frame: Want the right answer,
right now.• Myopic: Adopt a short-term perspective, crisis
mentality• Directive: Consult and listen less to others
Source: Straw, Aanderlands, & Dutton, 1981; Weick, 1993cogent
Stress Across Canada*
• Percentage who reported they were as stressed as they could handle, or were on their way to being completely overwhelmed:– Alberta 38%
– Atlantic Canada 41%
– British Columbia 37%
– Ontario 39%
– The Prairies 32%
– Quebec 64%* Stress is Everywhere and Getting Worse, Survey Says, Canadian Press Newswire, 17/12/97
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The Costs of an Unhealthy Workplace
High Effort, Low Reward
+High Demand,Low Control
3 x Heart Problems
3 x Back Pain
5 x Certain Cancers
2-3 x Conflicts
2-3 x Mental Health Problems
2-3 x Infections
2-3 x Injuries
2 x Substance Abuse
cogentSource: Shain, CAMH.
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Employers incur an additional $1.50 in workforce disruption$1.50 in workforce disruption for every dollar of disability claim paid out. (Birnbaum, et al.)
Stress Has Direct and Indirect Consequences
• Productivity• Profitability• Competitiveness • Intellectual capital• Efficiencies• Cooperation
• Speed• Quality• Standards• Attract and Retain• Team work• Climate
The Service-Profit Chain
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Profit-Profit-abilityability
EmployeeEmployeeSatisfac-Satisfac-
tiontion
Produc-Produc-tivitytivity
CustomerCustomerLoyaltyLoyalty
RevenueRevenueGrowthGrowth
Health Matters to the Bank of Montreal
Shifting the Performance Curve
Productivity, profitability, customer loyalty, and employee retention are outcomes correlated with a “healthy organizational climate”.
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“...and what HR can do about it!”
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The Changing Nature of HR
Operational to strategic Qualitative to quantitative Policing to partnering Short-term to long-term Administrative to consultative Functionally oriented to business-oriented Internal focus to external and customer-focus Reactive to proactive Activity-focused to solutions-focused
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What H.R.’s Customers Want
• Pay my staff, on time, and the right amount.
• Be there to solve their problems.
• Hire new staff and help me keep the ones we
have.
• Do more with less!
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Traditional Approach: A Quick Fix
Wellness Programs
Drug Treatment
EAPs
Nothing at all
ALL FOCUS ON THE INDIVIDUALcogent
Finding Solutions: Getting to Root Causes
Management Decisions
•Culture and Values
•Policies and Procedures
•Job Design and Fit
•Workload
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Addressing the Demand/Control Squeeze
• Reduce Demands– Set priorities– Focus– Improve the
Process– Set protocols for e-
mail and voicemail
• Increase Control– Auhority
– Collaboration
– Culture
– Communication
– Competence
‘It’s just good management’.cogent
Unresolved Conflict
AbsenteeismTurnover
Unmotivated staff
Linking the Issue to H.R. Strategy
How profits leak from an organization
Low morale
Substance Abuse
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Maclean’s: Redesigning Work*
• Productivity increases by about 20% after compan-ies implemented work/life balance programs.
• Staff turnover falls by up to 50% when employees are offered benefits such as child-care subsidies, elder-care programs and flexible hours.
• The cost of losing and replacing an employee: 50% - 150% of annual salary.
• 43% of junior managers value home over work time compared with top executives.
• 48% of employees feel guilty when they leave on time.
* March 5, 2001
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Employees Want a Better Deal*
• Less stress
• More stimulation
• Better professional development
• Increased recognition
• Bigger say in how the job gets done
* Values Shift: the New Work Ethic and What It Means for Business, John Izzo
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Our Business Case is...
Organizational performance depends on healthy employees!
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In Conclusion
Organizational factors influence our health HR can enrich the organization’s value to
customers, investors and employees*. We can achieve sustainable performance
only by addressing root causes. Managing depression is a logical part of the
HR Mission, and a great opportunity to lead.
cogentSource: Ulrich, HBR, Jan-Feb 1998: p 125.
The Parting Thought
If...Depression harms employees
and...responsible employers abate harm
and...the issues are compelling
and...the cost of inaction is high
and...HR needs and wants to lead
then... Now’s the time to act!cogent