Service or maintenance work serves the upkeep of an object through appropriate care, regular inspection and execution of necessary repair work with the aim of maintaining its functionality. Many take their cars for regular servicing to increase the safety and reliability of the vehicle and identify faults at an early stage. A regular investment, therefore, in preventing breakdowns, extending the life of the car and avoiding major expenses. This consideration also can be applied directly to the employees of a company: regular “maintenance” of staff significantly reduces the employers’ expenses.
Of course, the car/workforce comparison is by no means intended to suggest that employees are to be equated with goods. But recognising that more attention is often paid to the maintenance of company vehicles than to the health prevention and reintegration of employees who have become ill is startling in itself. Many HR managers are unable to answer the question of how much the health-related absence of an employee can cost. When it comes to wear-and-tear on their own vehicle fleet, however, the expenses are recorded in great detail: In Germany in 2016, for example, they were EUR 171 per vehicle. On top of this came a further EUR 265 per vehicle for maintenance to extend service life, resulting in a total of EUR 436 per year. There are no data available for Switzerland relating to company-owned vehicle fleets. The Federal Statistical Office (FSO) estimates the average expenditure on maintenance and repairs per passenger car in Switzerland at around CHF 1,000 for 2017 (source: statistics on costs and funding of transport (CFT) – FSO 2020). Assuming that company cars tend to be newer than the overall average of all passenger cars in Switzerland, spending on the maintenance and repair of company cars can be estimated at around CHF 800 per vehicle per year. This also roughly corresponds to the figures provided by TCS, which reaches a similar amount of CHF 818 in a calculation of service and repair work on an average sample car.
Direct and indirect consequential expenses due to sickness-related absences
The cost of “wear-and-tear” on a company’s workforce is much higher than for its vehicle fleet, however. The absence of an employee due to illness results both in direct expenses in the form of continued payment of wages, and indirect expenses due to the loss of added value, substitute and recruitment costs and those associated with a loss of quality. This is underlined by the following figures:
In 2020, the rate of health-related absences (illness/accident) of full-time employees in Switzerland was 3.5% (source: FSO – Work Volume Statistics (WV)). This means that for every 100 employees, 3.5 were ill at any one time, and unavailable to the company in the form of labour. The associated loss of value added alone amounts to an average of around CHF 3,000 per employee per year, based on the average gross value added of CHF 84,800 per capita in 2019. A company with 100 employees thus faces a loss of approximately CHF 300,000 per year. In comparison, the costs of a vehicle breakdown are bearable for the employer, as a replacement is usually quickly found. And yet, many companies put more effort into keeping their vehicle fleets healthy than doing the same for their employees.
Underdeveloped cost consciousness in terms of illness-related absence costs
Wherever costs are difficult to quantify, there is often a lack of action. Again, the comparison with cars: only once we become aware of high petrol prices do we start driving more economically. The same goes for the financial consequences of illness: it takes high absence or fluctuation costs to force a rethink regarding employee retention and “maintenance” of their health and ability to work. It is in the employer’s own interests, therefore, to support measures to promote health among their employees, with a focus on the following three areas:
- An appropriate working environment for maintaining health: A car runs smoothly if the oil is topped up regularly and high-quality fuel is used, and it is washed periodically and parked in a garage to protect it from damage and dirt of all kinds. For employees to “run smoothly”, ergonomically adjustable desks and chairs can be provided to promote health, for example, or a fruit basket made available for a healthy snack. When applied to the workforce as a whole, measures such as these are considered to be an element of workplace health management (WHM).
- Early detection as a form of prevention: Even the best engine oil can’t prevent all damage. But it will help reduce the risk. Regular vehicle maintenance is a preventive measure – if faults are detected and repaired at an early stage, significant downtimes and higher expenses can often be prevented and reduced in a safe way. Translated into workplace terms, supervisors and HR managers need an early detection system for realistically assessing the condition of their employees. This is far more difficult when it comes to health than it is with a vehicle. Early detection of possible diseases aids prevention, especially in the area of mental health. Professional case managers, for example, can help alleviate or even prevent a potential burnout with stress-reducing and supportive measures.
- Reintegration planning: A vehicle can break down despite high-quality fuel and regular maintenance, and is then taken in for repair so that it can return to service again as soon as possible. The same goes for the workforce. Here, too, a good working atmosphere and regular discussions do not always help, and more extended absences due to illness may occur. However, there is a key difference in comparison with company vehicles, in that many companies don’t provide for any “repair work” at all on their own staff. While the car is taken to the garage, employees have to heal on their own. And, even worse, someone who is going through a burnout, for example, is often assumed to be a write-off. Case management can help here too with maintaining capacity to work and supporting reintegration.
Cutting expenses through maintaining capacity to work and supporting reintegration
The likelihood of successful reintegration is increased if employees who are absent due to illness can receive professional support at an early stage. Employees who can be reintegrated do not have to be replaced. No costs are incurred for recruitment and induction, no new team dynamics need to be managed, and existing client relationships can continue. Reintegrating employees who have been ill and maintaining their capacity to work therefore reduces the absence costs. Using automotive terminology, the lifespan of the employee as a human resource is thus extended by means of “health maintenance” and, in the event of illness, maintained by means of “repair”. It is simply a case of applying the systems and measures of workplace health management (WHM), with the aim of significantly reducing the average sickness rate of 3.5%. A 2011 study by Roland Berger Strategy Consultants confirms that “WHM improves health and is economically effective: workplace health promotion programmes reduce absences by 30 to 40 percent, helping to cut medical costs within just three to four years as a result.” The company mentioned above, with its 100 employees, could thus be saving around CHF 100,000 a year!
The elipsLife pension solution is based on a combination of risk coverage against the financial consequences of illness, accident or death, and prevention and reintegration measures. While insurance cover serves as a financial parachute, the actual benefit starts much earlier with support in early detection, restoration of capacity to work and reintegration of employees who have been ill. With its case management activities, elipsLife offers employers comprehensive, innovative and customised solutions and services aimed at maintaining the health of their employees, whose well-being is more important now than ever before.
Source image: freepik/standret