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Benefits Business
Are your employees "there"?
“Presenteeism” is being fueled by the current economic crisis
By Len Strazewski
“Present but not accounted for.” Every office has them and human resource managers hate them—employees who show up for work but who are generally unproductive because personal issues, family problems or economic concerns distract them.
According to a 2009 study by Mental Health America in Alexandria, Virginia, “presenteeism” accounts for about $200 billion each year, or about 5% to 12% of total annual productivity. Some of the lost productivity is also driven by clinical depression which has been on the rise since the recession, the association says.
Employee benefits producers often get an earful from their clients about productivity management issues but usually have little to offer in support as they grapple with the greater issues of health care costs. But there are employee benefits products that producers can suggest—products that provide some remedies for employers and help for struggling employees.
These products target employees with health concerns that can disrupt their productivity, personal issues that can distract them from efficiency, family crises that can take much time to resolve and age-linked retirement fears.
Health coaching
Many group health plans offer telephone toll-free health information services staffed by registered nurses who can offer general health tips. These services are woefully underused and ill-promoted by employers and sometimes shunned by employees who fear that their private health concerns will become part of their employment record.
However, employees suffering from headaches at their desks or wondering why their energy drops so quickly after lunch might find some comfort in health coach guidance and stress management tips. Or they may be directed to blood pressure or diabetes testing to diagnose an energy-sapping chronic illness.
Disease management programs, offered to employees who have been diagnosed, can provide more advanced coaching and periodic check-ins that keep workers on a healthy and productive path.
Health coaches can also guide employees into various wellness services, including smoking cessation, weight-loss and nutrition education that can boost energy and improve job productivity.
EAPs
Employee Assistance Programs are also underused benefits that often come as part of health plans. They are inexpensive and can be purchased separately for a few dollars per month per employee.
EAPs usually provide brief counseling services, three to six sessions per employee, that cover issues from depression, alcohol and substance abuse, family crises, basic legal concerns and personal financial crises. EAP counselors are trained to provide referrals to mental health professionals, but they can also refer employees to financial counselors, marriage counselors, legal assistance and facilities such as assisted living facilities for elderly family members.
The Employee Assistance Professionals Association, Inc., in Clearwater, Florida, recommends that benefit producers discuss the use of EAPs with their clients and alert them that most EAPs will provide on-site training in stress management, customer service and other skill-building.
EAP counselors can also work with supervisors in developing action plans for dealing with unproductive or troubled workers as well as other employee situations.
Long term care insurance (LTC)
Anyone who has ever had to research assisted living or nursing home facilities for an ill or disabled family member comes away from the experience in shock. Very little long term care service is covered by group medical insurance or Medicare. The costs range from $2,000 per month for basic assisted living residences to $7,000 or more per month for nursing home services.
Locating and vetting appropriate services is also an arduous task, requiring hours of computer searches, telephone calls and personal inspections that frequently must be scheduled during work hours. The task usually falls to middle-aged employees who may already be dealing with their own mid-life health issues and their own fears about their eventual long term care needs—a psychic double whammy.
Long term care insurance is another underused and under-purchased employee benefit, usually made available to employees through voluntary employee programs and payroll deduction. Agents and brokers who have attempted to market LTC say they are lucky to get employee participation for 5% to 10%—unless employers are willing to pay for a basic group benefit for employees and actively promote upgrades in the voluntary benefits.
However, employer-sponsored group LTC provides guaranteed issue or very relaxed underwriting for employees and their dependents and family and deep discounts from individual rates. Moreover, LTC carriers can provide objective information about care providers, referrals to services which can reduce the time and energy of searching and vetting and can provide discounts from national care chains.
According to the American Association for Long-Term Care Insurance in Westlake Village, California, more than one-third of group LTC purchasers are 55 years old or older, a target group of employees who may be exhibiting presenteeism as they deal with care for family members or prepare for their own needs.
Retirement plans
After three years of recession, employees continue to fret about their retirement prospects. They have seen traditional defined benefit pension plans continue to be frozen by cash-strapped employers and 401(k) plan balances erode as the equity markets bounce up and down and employers suspend their contributions.
According to an annual analysis of defined benefit pension plan strength, conducted by Mercer, a New York-based employee benefits and human resources consulting company, pension plan financial health has improved very little since the onset of the recession.
In 2009, defined benefit funded status for the S&P 1500 improved only three percentage points over their lows in 2008, to about 75% of liabilities.
Defined contribution plans fared no better—and probably worse because they are even more sensitive to equity values. According to the Hewitt Associates’ annual study of 401(k) plans, average balances have improved, but not as dramatically as plan participants hoped for. Average plan balances rose from $57,150 in 2008 to $70,970 in 2009. But these balances were still 11% lower than they were in 2007 ($79,570).
Plenty for employees to worry about and plenty of reason for older employees to defer retirement, even though their job motivation and performance may be in decline.
As your client employers plan to restore 401(k) contributions, now may be the time to suggest a big benefit communications initiative and retirement planning counseling to remind employees that secure retirement is possible with good management.
Jack Abraham, principal and employee benefits practice leader for PriceWaterhouseCoopers in Chicago, also recommends that employers reconsider defined benefit pension plans and split the retirement benefit budget between a defined benefit plan and a defined contribution plan.
Defined contribution plans alone have not been able to yield the level of security employees need, he notes. As a result, older employees could be retiring on the job, continuing to work while their productivity declines.
“Part of the purpose of retirement benefits is to provide an orderly and secure process by which employees can be comfortable in leaving the workforce at the right time and provide opportunity for new employees to enter the workforce,” Abraham explains.
Without secure retirement benefits, older employees may stay around longer than they should and become classic examples of presenteeism, he notes.
The author
Len Strazewski has been covering employee benefits issues for more than 30 years and is employee benefits columnist at Human Resource Executive magazine. He has an M.S. in Industrial Relations from Loyola University in Chicago.
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