An uncertain future for America's work force

Think the recession was rough on the nation's work force? It pales in comparison to the challenges workers and employers will face in the coming years, warned John Howard, MD, director of the National Institute for Occupational Safety and Health, at the opening session of the 2011 Work, Stress and Health Conference, May 19–22, in Orlando.

A case in point: In most developed and developing nations, the work force is aging dramatically, with "chronologically gifted" workers constituting the only group that will grow over the next 20 years, he said. At the same time, the obesity epidemic is weakening the health and shortening the life spans of younger workers.

"Employers are banking on a new crop of young, healthy workers coming in and replacing the older ones, and that just isn't going to happen," Howard said.

And unhealthy workers are bad for business and even the whole economy's health, added Cornell University economist Sean Nicholson, PhD.

"We have been vastly underestimating the true cost of a sick worker," he said.

However, the news isn't all bad: Over the course of the four-day conference, researchers identified ways to prepare workers for the realities of the new economy, in which workers will likely have several jobs, even careers, over their lives. At the same time, occupational health psychologists and economists can help governments and employers meet the challenges of the coming decades by, for instance, calculating the true cost of unhealthy workers and creating cost-effective employee wellness programs.

"Companies may be underinvesting in the health of their workers," said Nicholson. "But if we can show them how it affects their bottom line, they won't be for long."

Co-sponsored by APA, NIOSH and the Society for Occupational Health Psychology, the conference convened more than 700 participants from 45 countries including economists, psychologists and other researchers. The conference, the ninth since the series began in 1989, focused on the changing nature of work and the implications of these changes for the health, safety, and well-being of workers.

The true cost of illness

Economists traditionally determine the cost of a sick worker by calculating their pay for a given day—since a worker's pay should, in theory, estimate what his or her labor is worth on the open market, said Howard. However, that doesn't account for the domino effects of missing workers, especially ones who are hard to replace and work in teams. If an airline pilot calls in sick, for example, an airline could lose the revenue for an entire airplane and its crew as they scramble to find a replacement pilot or rebook passengers on other flights.

"You have to look at the ripple effect on the team members and profits," Nicholson said.

By surveying 800 employers about the degree to which workers are replaceable, work in teams and have time-sensitive jobs, Nicholson and his colleagues created a list of "multipliers" for 33 occupations to estimate the true cost of an employee's sick day, (Health Economics, Vol. 15, No. 2). Topping the list were paralegals, whose true cost to law firms in terms of lost productivity is almost twice that of their individual salaries. Fast-food cooks, in comparison, only cost restaurants or bars the equivalent of a day of pay when they call in sick.

Across all occupations, the true cost of a sick day was about 60 percent higher than traditional estimates, the researchers found.

The ripple effects for sick workers, however, go further than just their individual companies, said Brian Bankert, a researcher for Healthways, a Franklin, Tenn., company that develops employee wellness programs. In a session on the economics of worker health, Bankert proposed a formula that takes into account the effects of a sick worker on other companies in the region—for instance, those that supply the given company with raw materials.

In one study of a 2,000-person insurance firm, Bankert simulated employee values based on the productivity of the health insurance industry and industry economic multipliers, available from the Bureau of Labor Statistics and the Bureau of Economic Analysis, respectively. He found that an average worker at this firm cost his or her company $3,409 in lost productivity in sick days over the course of the year—or about $6.8 million across all 2,000 workers. However, those employees' sick days had a much bigger cost to their regions—about $13.2 million in lost productivity, he found. That's a lot of money that could otherwise go toward salaries, Bankert added.

"How many new jobs could we create at the regional level by decreasing sick days at a single firm?" he asked.

Healthier workplaces

A major culprit behind many of those sick days is depression. In fact, depression is the single most expensive ailment for America's employers, costing $44 billion in lost productivity every year, according to a study published in the Journal of the American Medical Association (Vol. 289, No. 23).

Mild depression may be particularly costly because it is so common, said Harris Allen, PhD, an independent consultant who develops health and wellness programs for companies. In an international survey of 39,097 employees published in April in the Journal of Occupational and Environmental Medicine (Vol. 52, No. 4), Allen and his colleagues found that 16 percent exhibited mild depression and 7 percent showed symptoms of moderate to severe depression—a finding that dovetails with results from other populations. Because of its high frequency, mild depression accounted for the most lost productivity—33 percent more than the cost of moderate to severe groups combined. The researchers also found that a predisposition toward stress and stress on the job were among the most potent predictors of mild depression.

The results, said Allen, strengthen the business case for employer-funded interventions. "More employer-sponsored stress reduction programs are needed to manage the surprisingly predominant contribution of mild depression to the overall impact of the condition," he said.

Decreasing workplace stress would also improve worker health and decrease health-care costs, according to a study presented by Douglas Roblin, PhD, a senior investigator for Kaiser Permanente's Center for Health Research in Atlanta. His survey of 2,224 Kaiser subscribers found that employees with better work climates, where people felt they had the freedom to manage their own time and support from their supervisors, were less likely to visit their primary-care providers. The 25 percent of employees reporting the least stressful work climates incurred lower primary care visit costs of about $830 per 1,000 employees, on average. "It's just a moderate savings for a year," said Roblin, "but it could make a big difference in the long run."

A more direct way to improve worker health may be simply giving them time to exercise, according to a study presented by Henna Hasson, PhD, an economist at Lund University. She and her colleagues randomly assigned Swedish dentist offices to one of three conditions: some employees were given 2.5 hours a week of time off work to exercise, some were provided 2.5 hours a week to do whatever they wanted and some continued with their usual work schedules. A year after the program began, the exercising dental hygienists were cleaning teeth more quickly and thoroughly than both comparison groups, Hasson said.

"The increase in productivity made up for them being at work fewer hours," she said.

That study is just one of many that show that employee wellness initiatives are good for companies as well as employees, said Nicholson. In fact, one meta-analysis published in Health Affairs (Vol. 29, No. 2) found that companies recoup $6 for every dollar they invest in wellness initiatives—with savings about equally divided between reduced group health-care costs and fewer sick days.

Unfortunately, surveys also show that employers aren't convinced that their programs would be as effective as the ones that get studied and written about, he said.

"There is a lot of skepticism that a typical employer could just pull off the shelf some wellness program, implement it at their firm and get back $6 for every dollar they invest in it," Nicholson said. "If they did believe that, they would be tripping over themselves to run these programs."

Job instability

Convincing employers—and governments—of the importance of worker health will be increasingly important given the major economic changes we'll see in the years ahead, said Nicholson. Economic and job instability, he said, are well-known stressors, and we need to better buffer people from their effects.

The recession, for example, resulted in poorer health among Americans, said Nicholson, who pointed to Gallup polls finding that the employed took more sick leave and everyone felt more stressed. The only upside to the recession, in terms of health, was a decrease in traffic fatalities, as fewer people were commuting to work, Nicholson found.

Meanwhile, a wealth of research suggests that losing one's job is an extremely stressful event that can result in health problems, said Tony Machin, PhD, a psychology professor at the University of Southern Queensland in Australia. One such study by Machin and his colleague Nancey Hoare, PhD, surveyed 115 unemployed Australians. Interestingly, they found that economic deprivation was only slightly related to people's levels of distress. Rather, people suffered more from the loss of social support, daily routines and a sense of purpose, Machin said.

The relatively small sense of economic deprivation, however, may be particular to countries that, like Australia, have strong social safety nets, said Tahira Probst, PhD, a psychology professor at Washington State University.

Using data from 15,200 employees in 24 countries, Probst compared levels of job insecurity, satisfaction and commitment based on the workers' countries level of economic security—for instance, whether governments offered worker retraining programs and unemployment insurance. 

Overall, workers with good safety nets were less affected by the stress of job insecurity than those without that protection, Probst said.

The upshot? "Countries who want committed, satisfied workers should strengthen their social safety nets, particularly during times of economic insecurity," she said.

We need those social safety nets now more than ever, said Rudy Fenwick, PhD, a sociology professor at the University of Akron, in Ohio, because although the recession is over, job instability is here to stay. Companies increasingly rely on a core set of workers plus a larger, "flexible" work force of temporary and contract employees, who they can hire and let go as needed, he said. That new business model, compounded with rapidly changing industry and longer lifespans, means that workers should expect to have many employers and careers over the course of their lives.

Given the realities of the new economy, vocational psychologists should help people prepare to think flexibly about their careers, said Frederick Leong, PhD, a psychology professor at Michigan State University. He and his colleagues are examining career adaptability among a cohort of 400 high school students. So far, they have found support for a four-factor model of career flexibility: concern for where your industry is going; taking control of your career; displaying curiosity about what careers you might have in the future; and having the confidence to pursue your goals. Students who have these crucial ingredients will thrive in the new economy, Leong predicts.

"It's tough out there, but people who are willing to explore their options and aren't locked in to one particular career are likely to do well," he said.

View a slide show of keynote speaker Sean Nicholson's presentation.