The economy in Finland is very difficult at the moment, because despite companies making a lot of money, the unemployment rate is around eleven percent and companies are trying to cut more roles. The trouble is that this constant cutting is actually costing more in many cases, because this isn't the US where people are just fired willy-nilly, if people burnout and go on sick leave, they get looked after by the company. This means that the company will pay for them, the additional health expenses like psychologists, all the meetings to organise this, plus the cost of hiring a fill-in, or dividing work - which puts pressure on the remaining employees, which are likely already under load and are therefore more likely to be the next burnout case.
You would think that a company would be trying as hard as possible to keep the people they still need working optimally and not at risk of sick leave, but you would be mistaken. Because the cost of doing this, even though far smaller than the cost of burnout and underperformance, is a preventative cost which shows up on the balance sheet as a dead line cost, if it works. Because if preventative measures work, there is no evidence that they are needed at all.
This is the trouble with preventative services that work. An employee that doesn't burnout doesn't appear as a cost, which means there is nothing to save. This means that actions become very reactive when someone does burnout, which triggers costs. Being reactive is nearly always going to be more resource expensive than being preventative, but companies are missing this in terms of their people.
For instance today with a people leader client who has a person on burnout leave, I asked what they could have done to stop the person from burning out. So we went back in time and what it essentially would have come down to is, having someone to take them seriously and listen to them about their work challenges and their personal challenges. Someone who understood the task requirements enough, but someone who was also independent and had no agenda.
Someone like me.
My client likes spreadsheets, so I said before the next session, workout the current cost of having the person on sick leave, including the cost of meetings where for instance there are five people including himself, his supervisor and a VP in a room together for an hour or two. The cost of the conversations with his supervisor about this, when they should be talking about other things. The cost of having the person away from a role that there is no replacement for, the costs of time off without productivity, the cost of company-paid healthcare - and the list goes on.
And this is the third person in a year.
Compare this to the cost of someone like me and I am incredibly cheap. Not only are the people who are with me far less likely to burnout and go on extended sick leave, they will be in a development path that will help them improve their work patterns and add additional value to the team by achieving more of their potential and being healthier for it. And since the company is going through a massive shift in commercial focus and internationalisation, they will get change management support to smooth the transition.
But, I am too expensive.
This is not what my client said, because he agrees with me. It is just that he knows that there is no room in the budget for additional costs. But, there was no room in last year's budget for three people to go on burnout leave either. And just imagine if there was, because it would be an extreme cost in terms of the team and if that was pushed out to the company with thousands of employees, it would be a huge line item. Instead, it becomes a type of hidden cost. It gets paid, but it ends up a "cost of doing business" item, when it shouldn't be a cost at all.
Think about this in the US.
The US healthcare system spends approximately 260 billion a year on direct medical costs related to obesity. But, once factoring in productivity, absenteeism, disability, workers' compensation etc, the estimated economic burden is around 1.4 trillion per year. That is an average of $4000 a year for 350 million people in the US just on the costs of obesity. But that number isn't the true cost, is it? Because removing that cost would free up resources that could be spent elsewhere on other preventative measures and development processes.
From a societal perspective, the worse our health issues get, the worse they will get, because it is very much a debt cycle. We are getting more and more into wellbeing debt across all facets of our lives and that is going to impact on all the other facets. Being under stress at work increases stress at home and vice versa. Being stressed about the economy, the community, the future, war, whatever else - puts stress on everything. The costs will keep going up and we will have less and less resources to spend on improvement. It is a credit card debt being paid off with another credit card. As interest rates keep increasing the debts, at some point, there is not enough to trade between.
Preventative healthcare measures should be the go-to policy for companies and governments, even though in time if everyone was healthy, the healthcare systems would be largely redundant and pharmaceutical companies would be out of business. At least, they would be out of business for sick people. However, they could stay in business if they focus on improving healthy people - and we have a lot of potential still to realise. For a company, preventative support should be one of their key people resource policies, because it will save them a huge amount in reactive expenses and improve their productivity.
If you want a sustainable high-performance team, you have to build the environment for it.
But unfortunately, this kind of insight that likely many people will agree with, will still hit the wall of being unbudgeted, a cost, and therefore unnecessary. Businesses say they make informed, data-driven decisions, but even when the cost of health or the cost of ill-health of their employees is quantified, they will choose to remain reactive.
I am definitely in the wrong line of work.
I am unemployable.
Taraz
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