To get the most from benefit programs, companies should first look for programs that keep employees safe at work.
That''s one of the findings of a recent study by the Integrated Benefits Institute (IBI), which says productivity loss associated with employee absence is four times greater than costs for safety programs and health benefits.
Policy-owned Workers Compensation Fund (WCF), Salt Lake City, Utah, said efforts to increase workplace safety are helping to reduce productivity loss in Utah companies, while keeping premium costs down.
"Workplace safety programs, such as annual safety audits and written drug and alcohol policies, dramatically decrease the probability of workplace injury," said Lane Summerhays, president and CEO of WCF. "We have consistently found that safe companies have higher employee productivity and lower premiums."
The IBI study estimates participating companies lost as much as $11.5 billion in 1999 through lost productivity from employees missing work because of workers'' compensation, short- and long-term disability and sick leave -- equaling 8 percent of total revenue.
Nearly 74 cents of every dollar spent on lost productivity and benefits is associated with lost productivity.
Disability programs -- including workers'' compensation and short- and long-term disability -- account for only 4 cents. Health benefits account for 22 cents.
The study identified two key issues to effectively managing employee benefits: developing programs that increase worker productivity and lowering out-of-pocket benefit costs.
WCF said Utah companies have proven that enforcement of workplace safety programs lowers out-of-pocket benefit costs, while increasing productivity.
"Utah ranks as the fifth lowest state nationally for workers'' compensation costs," said Summerhays. "Nine out of 10 Utah companies have safety programs in place. This has helped to decrease overall premiums in Utah to $200 million last year -- $100 million lower than just five years ago."
Written drug and alcohol policies are one sure way to increase productivity, said Summerhays.
In 1999, 74 percent of Utah companies have a written drug and alcohol policy, a healthy increase from 52 percent in 1998.
"Substance abusers are three to four times more likely to be involved in an on-the-job accident," said Summerhays. "If a company doesn''t have a written drug and alcohol policy, what message is it sending to drug users? It''s saying ''Come work for us.''"
by Virginia Sutcliffe