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Why should a company care about its employees’ health?

The Cost of Doing Nothing Calculator

Howatt HR Consulting/The Globe and Mail

This is part of The Globe and Mail's Your Life at Work Survey. This part is focused on employers and how much it can cost them if they ignore the health, wellness, attitude and productivity of its employees. Check out our Cost of Doing Nothing Calculator.

We know that many factors – including leadership, sales, productivity and employee engagement – have an impact on an organization's ability to achieve its full potential.

Those at the top tend to focus on tangible factors, such as sales and costs, because they are definable and measurable. But what if this logic is flawed?

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Companies formulate their budgets based on tangible variables that are used to predict financial risks and opportunities. But using the same formula with employees will fail; people are far more complex than finances. Determining the value of people requires factoring in tangibles such as sick days as well as intangibles such as the amount of effort employees are putting into their jobs.

Most leaders understand that if their staff are not managed effectively it could hurt the company's bottom line. The issues leaders need to pay attention to can include employee benefits, short- and long-term disability, mental health issues, absenteeism, presenteeism – where the employee shows up for work but does the job poorly or with no energy or enthusiasm – conflict, harassment, bullying, and employee retention and engagement.

How do you estimate the cost to your company if these issues are not addressed? What's the cost of having an employee do 70 per cent of their job? What if you let stress rise to catastrophic levels and allow workplace bullying to run rampant? Is there a corresponding cost to a corporation?

There is. Howatt HR Consulting has given The Globe and Mail access to a valuable tool called the Cost of Doing Nothing Calculator.

This interactive spreadsheet gives leaders the power to estimate the costs associated with factors such as presenteeism and disability claims, to show companies what the cost is to them if they ignore the health and welfare of their staff at work. The calculator can indicate where a company should take action to reduce costs and mitigate risks, and to improve productivity.

A hypothetical case study shows how this calculator can work.

Let's say a company with 500 employees has been operating profitably on the outskirts of a Canadian city for 30 years. However, over the past five years managers have been noting a higher turnover rate, among other staff issues.

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The company's chief operating officer can use the Cost of Doing Nothing Calculator to estimate the benchmark cost for both tangible and intangible human capital factors. As the COO makes entries in the calculator, he can see how and why total costs are rising.

The tangible costs are definable and logical, like a typical budget line item. It's the intangible costs that make the COO shake his head. He can now see the cost of having a work force that wastes too much time gossiping and not dedicating more of their effort toward their job.

He can see that the cost of doing nothing and ignoring these issues are too great. His company is losing $3.8-million a year by failing to improve the health and attitude of its staff.

Some leaders may object to spending money on human capital because it is considered a soft cost, or there is no budget for it. However, in the vast majority of organizations, the cost of doing nothing to support staff are high. The Cost of Doing Nothing Calculator can help leaders realize what human capital issues could be costing their organization.

It will help them understand that spending time on people's health and happiness can result in a significant return on investment through improved productivity and fewer disability cases.

Your Life at Work Survey

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Click on the title to take our Your Life at Work Survey and see how you are balancing the stress of life and work.

In addition, employers can take the employer version of the Your Life at Work survey to rate their perception of their employees' stress and coping skills.

Click here to get a list of ways to help reduce your stress.

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