You’re kidding me! Are you saying that if I start running, my organization is likely to have a healthier bottom line? That’s the most outrageous sales line I’ve heard!”
Now that you have said that out loud, and got it off your chest, I would urge you to read on.
You know what you pay your employees, but do you know how much your employees cost you?
Here are a few simple questions that I ask the CEOs and HR heads of MNCs and start-ups whom I meet in the course of work:
The tangibles: around 5+% of your wage bill
• How many days on an average do your employees take leave due to coughs, colds, flu? The answer—after a few “hmmms”—has varied from four-six days (with two bad spells in a year)
• Before the employees go on leave, is it safe to say that their productivity has been down for around half a day? Well, that adds up to one more workday lost
• What about migraines, backaches, spondylosis and various other aches and pains? Another day? Perhaps
• Also, about 1% would have been down for 10-15 days with a severe illness
Eight days and counting
India is the cardiac, diabetic and hypertension capital of the world. Studies show that by 2010, 60% of the world’s coronary patients will be in India.
•How many people in your organization are stressed, have high BP, or basic coronary issues such as cholesterol? Perhaps all, but each to a varying degree. Okay—so what percentage of your employees of any age have been hospitalized in the last year? Perhaps 1%
Also Read Rahul S Verghese’s earlier columns
•Diabetes? Probably similar
• So, 2% down (for an average of around a month in all) on the above two counts—and that’s a very conservative figure
That’s half a workday lost per employee
What is the impact on the team as a whole? With an average team size of four, it is a conservative estimate to arrive at a 10% impact on each team member’s productivity for each day’s absence.
Team impact: 8½ days x 4 people x 10% = 3.5 days
The intangibles: around 10+% of your wage bill
How’s the morale at your organization these days? How much time in the last week were you a bit switched off work, during a time when you shouldn’t have been? 5%? 10%? Or are these numbers a bit conservative?
Any disgruntled employees taking poor decisions and not caring about the fallout? Do you think you have even one of them in your entire team? That could be a major cost! And what do you think is the knock-on effect on the rest of the team?
How is all this affecting delivery schedules and quality control? Have you had issues with customers in the last six months on these counts? How much of it was due to absenteeism or attitudinal issues such as those mentioned above? Add that to your costs. Are people taking risks like you want them to? Are they optimistic and self-confident? Are they persevering? What are the losses or the opportunity costs on these counts?
These are all more difficult to measure, but they have an impact far greater than the tangible costs.
If you add the allocated costs of real estate and administration, you have a huge figure to look at. Mindboggling, isn’t it? And no, this is not a juggling of numbers.
Are you measuring these costs in some way? If not, estimate these realistically and set in place a periodic pulse check within your organization.
Many of my previous columns have focused on how running impacts each employee, the team and the organization in terms of their health, perseverance, self-confidence and optimism. If you make a start with sports, this could spread through your organization. Leading organizations around the world are looking at running to work tangentially across their teams. And this is why and how it helps your company’s bottom line, by boosting health and attitude across the board.
Rahul S. Verghese is a management consultant and founder of Runningandliving.com.
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