More on the Impact of Disability on Organizations

Employers pay the largest share of the economic costs associated with disability.  Studies
show employers pay 35% of the total with workers and families incurring 27% of the
financial cost.  Some details of this economic burden include:

• The average Canadian missed 7.2 days of work in 2001 (Statistics Canada 2002
  Labour Force Historical Review).
• Direct and indirect costs of disabled workers displaced from the workplace in BC
  total $3.6 billion a year and are projected to climb. About 5% of all disabling
  conditions in BC result in long-term disability and an extended or permanent period
  of work disruption. Assuming similar rates of disability across Canada, the total cost
  of disability in Canada would equal $36 billion (NIDMAR, 1997).
• The indirect costs of disability include: decreased productivity while at work
  (presenteeism), loss of productivity related to employee absences, salaries of
  replacement workers plus the cost related to training and workflow disruption,
  overtime, decrease in customer satisfaction, medical, legal and investigation expenses
  (Watson Wyatt, Staying at Work, 2002/2003).
• A study of three Canadian pulp and paper mills undertaken by
  PricewaterhouseCoopers found that the direct and indirect costs associated with
  disability-related absences contributed $4.50 to $7.25 to the total cost of producing
  each tonne of paper (NIDMAR, 2000).
• Watson Wyatt, in its survey of Canadian employers in 2000, found that direct
  disability and absence costs are 7.1 percent of payroll.  While costs of workers’
  compensation declined slightly, short-term absence costs had doubled in the period
  between 1997 and 2000. The authors attributed part of this increase as a side effect of better management of workers’ compensation claims.
• The indirect cost of work absence was approximately 10.2% of payroll (Watson
  Wyatt, 2000).  Of that amount, 6.2% related to the cost of overtime and replacement
  workers; 4% was attributable to loss of productivity.
• Small employers (employing fewer than 200 employees) report higher direct
  disability and absence costs as a percentage of payroll than medium (201 to 999
  employees) or large organizations (more than 1000 employees.) For these small
  organizations, the direct cost of disability was 7.8 % of payroll (Watson Wyatt,
  2000).
• Decreased productivity while still at work is especially associated with mental health
  and substance abuse-related issues. In addition, these conditions may be associated
  with higher accident and injury rates.
• Physical and mental disabilities are now the leading source of complaints to the New
  Brunswick Human Rights Commission (2002). In 2000/2001, 34% of the grievances
  to the HRC came from people who contended they were discriminated against on the
  basis of their physical or mental disability.  Even those grievances that are dismissed
  are costly to employers due to the cost of legal assistance and gathering information
  to present to the commission.