5 Ways to Reduce Health-Related Productivity Costs

While offering health coverage and benefits for employees and dependents is a major business expense, lost productivity due to physical and emotional health problems can be far more costly for employers. Here are some ways to reduce health-related productivity costs.

Lost productivity is classified in two ways: presenteeism and absenteeism. While absenteeism means that the employee is physically not at work, presenteeism is when an employee is physically at work but a physical or mental health condition negatively affects their work quality and quantity. Employers spend two to three dollars on medical-related productivity costs (presenteeism) for every dollar spent on pharmacy and health care costs.

Effects of Presenteeism

Presenteeism can have many negative effects on your workforce, including:

• Spending unneeded additional time on tasks
• Decreased quality of work
• Lack of initiative
• Infecting other employees, clients, or customers with an illness
• Lowered ability to perform at a high level
• Decreased quantity of work completed
• Inability to be social with co-workers
• Lack of motivation

Causes of Health-Related Productivity Costs

• Back and neck pain (notoriously a very expensive and prevalent medical condition)
• Headaches
• Colds and the flu
• Sinus trouble
• Obesity
• Allergies
• Diabetes
• Depression and/or anxiety
• Ongoing chronic conditions

Decreasing Health-Related Productivity Costs

To reduce productivity costs in your workplace, consider the following:

1. Address conditions that affect many of your employees in your wellness initiatives.
2. Offer health fairs, screenings, and health risk assessments to evaluate the needs of employees.
3. Integrate your health benefit strategies with your health management and wellness initiatives.
4. Design your benefits package to support the behaviors that you want to see at your organization.
5. Partner with a health care company that takes an innovative approach to wellness and offers productivity, wellness, and disease management resources. Your health care company could offer the following:
   • 24/7 nurse line
   • Wellness and health risk assessment tools
   • Lifestyle management and chronic condition assistance
   • Solutions that empower individual employees to take control of their health care

If you do not address your employees’ health care needs, your workplace is far more likely to experience the negative effects of both absenteeism and presenteeism. However, if you can commit time and funds to help your employees improve their health, you will reduce medical and pharmacy costs and increase worker productivity.

© 2025 Zywave, Inc. All rights reserved. 

GTM is Your Partner for Employee Benefits Design

For an organization of any size, its heart is its people. Creating a benefits strategy that meets the needs of employees is one of the most important investments you can make.

There is much to plan, consider, and execute when designing a benefits plan for your business. Don’t go it alone. Let the GTM Insurance Agency help you create and implement a competitive, customized, and cost-effective benefits package for your employees while reducing the burdens and costs of managing benefits on your own.

We craft customized plans that align with your needs and goals, which means happier, more productive workers. It’s coverage that will work for you and your employees without the stress and hassles of trying to do it all yourself.

Get a free quote today.