Covid Cost Employers $213 Billion in Lost Hours: How to Mitigate Further Losses
This dollar amount equates to 6.6 billion lost hours of productivity over a two-year period of the pandemic, according to a new Integrated Benefits Institute report.
The Integrated Benefits Institute (IBI), a nonprofit research and educational organization focused on workforce health and productivity, estimates that the cost associated with the loss of work hours because of Covid-19 is $213.1 billion ($167.4 billion in the first year and $45.7 billion in the second year). The number of lost hours attributed to the pandemic was 6.6 billion hours (5.2 billion in the first year and 1.4 billion in the second year).
“Historically, employers have measured the financial impact of medical and pharmaceutical claims to measure the success of the benefits administration,” notes Carole Bonner, researcher. “However, the pandemic has shone a spotlight on productivity, absence, and the costs not only of Covid-19, but also the costs related to those absences. This study helps to better understand the loss of productivity and the recovery of the various sectors.”
Some occupations and industries were particularly hard hit. The top 5 industries that faced the greatest economic losses were: educational services, healthcare, and social assistance ($30.8 billion); public administration ($27.1 billion); construction ($23.9 billion); waste management services ($22.4 billion); and manufacturing ($21.5 billion).
The first year of the pandemic brought an average increase in lost hours of 39 percent; however, those who worked as administrative support (46 percent) or craft workers/artisans (51 percent) had higher-than-average lost hours. In the second year, occupations collectively recovered an average of 11 percent. Administrative support (15 percent) and craft workers (35 percent) continued to experience higher-than-average lost hours in the second year.
Moving forward is not as easy as it might seem. “We may be heading toward an endemic phase of Covid-19; however, employers are still struggling with risk mitigation—especially if they are a global company with employees outside of the U.S.,” says Kelly McDevitt, president of IBI. “What our data aims to highlight is that employers cannot only concentrate on the actual cost of Covid-19 medical claims (which are typically not in the top five to ten disease categories from a cost perspective), but to also include productivity and lost time impacts when evaluating the scope of this challenge.”
How can employers recover from the pandemic? IBI sought input from more than 1,800 employers to help mitigate further losses, and these are some of their key points:
- Communication is key. Honesty and transparency are most important, as well as interacting with employees through multiple channels.
- Prioritize employee well-being and productivity. Benefits professionals should treat the health and well-being of the workforce as a strategic asset, thereby creating a high-performance staff.
- Encourage preventative screenings and well visits. Offer options such as home screenings and on-site services. Raise employees’ awareness of the benefits of regular checkups.
From: BenefitsPRO