Worst Flu Season in a Decade Could Cost Employers Billions

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Published January 09, 2013

| FOXBusiness

In what is already being called the worst flu season in a decade, an abnormally high number of influenza cases could end up costing employers billions of dollars.

The likely increase would be related to higher health-care costs and an expected decline in production as more employees miss work due to sick days.

When calculating the direct cost of hospitalizations and outpatient visits, the Centers for Disease Control estimates that an average seasonal flu outbreak costs the nation’s employers $10.4 billion.

And that doesn’t even include indirect costs such as the loss of productivity.

We're three months into the flu season and already it appears worse than usual, and the season's peak, typically January and February, is only just beginning.

So far, 29 of 41 states reporting flu cases said the outbreak is at “severe” levels. On Wednesday, a state of public health emergency was declared in Boston because of the expanding flu outbreak that has already killed 18 people in Massachusetts. 

To put it in perspective, Boston has 700 confirmed cases of flu so far this year, up a whopping 900% from just 70 total cases last year. 

Economically, this means companies that are already struggling to stay afloat as they loosen themselves from the clutches of 2008’s Great Recession and take a breather from the uncertainty of the fiscal cliff, can look forward to another major road block -- a multi-billion-dollar one -- in the first eight weeks of 2013.

“Companies that may already be shorthanded coming out of the recession could find themselves struggling to keep up with demand in the weeks ahead as absenteeism claims more manpower,” said John Challenger, CEO of Challenger, Gray & Christmas, a Chicago-based executive outplacement firm. 

Worsening matters, the still downtrodden economy has people fearsome of losing their jobs, and that is luring employees to work despite fighting the highly contagious illness.

Some advice from Challenger, Gray & Christmas:

For the sick person: stay out of work.

Influenza is highly contagious and rest is required for recovery. While coming in may seem like the valiant thing to do, it could actually lead to financial consequences as the virus not only lowers productivity but could cause coworkers to become infected.

That would ultimately lead to greater financial consequences for the employer as absenteeism surges and productivity slows, potentially cutting into the company’s bottom line.

For the employer: Discourage workers from "toughing it out."

One way to do that is by implementing an effective leave policy so workers aren’t afraid of losing their jobs should they need to call out. Preparing for the worst, companies should also have plans in place in the event of a massive outbreak.

That includes, if possible, not running at full capacity by building inventories, as well as taking appropriate measures to shift to telecom mode if necessary by giving employees the ability to efficiently set up shop and work from home.

Lastly, companies that host flu vaccinations, promote the importance of getting vaccinated and cut down on meetings when a flu outbreak begins are ahead of the game, Challenger said.

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http://www.foxbusiness.com/industries/2013/01/09/worsening-flu-season-could-costs-companies-billions/