Productivity and Your Employee Health Benefits Plan

A good employee health benefits plan will support both the health of your employees and your recruitment efforts. It will also have a positive impact on productivity. It turns out there’s an important link between the presence of a well-thought-out employee benefits plan and your company’s productivity.

Absenteeism and Presenteeism

It’s inevitable that some of your employees will be unexpectedly absent at some point over the year. When they are absent, the most likely cause is illness or injury.

If it’s illness that is causing the absence, sometimes it’s caused by a “one off” health event such as a cold, or sometimes a chronic condition. Chronic conditions can refer to illnesses such as diabetes, cancer, or heart disease. They can also refer to things like allergies.

Presenteeism is a close relative to absenteeism. Presenteeism means that your employee is physically at work, but is operating at reduced capacity due to illness, injury, or other factors. Chronic conditions such as allergies or mental health challenges can lead to both absenteeism and presenteeism.

Impact on Productivity

Absenteeism and presenteeism have a negative impact on productivity at your company. When an employee is away, they are not able to perform their job functions, which is a drain on productivity. If another employee is doing some of the absent employee’s work, then they are likely compromising their own work in order to do so.

Presenteeism is harder to identify and harder to measure. When an employee is physically at work but performing at a sub-optimal level, they are also a risk to your business’ productivity.

It may be hard to measure productivity loss at your company, but it is happening. It’s possible to measure days off, but it’s difficult to measure presenteeism or the negative impact on one employee’s productivity when they are helping to cover for someone else’s absence.

Absenteeism and presenteeism and their impact on productivity aren’t just a concern for large corporations. This matters to small businesses too. If you’re a small business owner and you have only a few employees, a single sick or injured individual could account for a quarter of your workforce. The effect on productivity would be enormous.

Employee Health Benefits

One of the main goals of sponsoring a health benefits plan is to give employees support to address and prevent negative health events. If the plan is effective and does shorten an absence, prevent one from occurring, and minimize presenteeism, then it has a direct link to productivity. In fact, an employee health benefits plan should be productivity-enhancing.

Although Canada offers universal healthcare, there are many gaps that an employee health benefits plan can address. Some examples of benefits that can impact productivity include:

1. Extended Health

Extended health benefits such as prescription drug coverage, paramedical services, and vision care impact productivity. Research shows that your employees do make choices on whether or not to access health services based on their out-of-pocket costs.

Without prescription drug coverage, an employee may choose NOT to have a prescription filled. Or imagine that your employee has an injury to their back. Without benefits, they may NOT seek the help of a chiropractor or physiotherapist. In both of these scenarios, not accessing medical services can impact how quickly they recover from illness or if they recover at all. It has an effect on how soon they return to work or whether they are productive when they do return.

2. Wellness Benefits

The goal behind providing wellness benefits is to assist in preventing negative health events from occurring. Supporting and incentivizing employees to pursue a healthier lifestyle can have a positive impact on productivity.

A healthy lifestyle means fewer illnesses and injuries, and a quicker recovery when they do occur. This can translate into fewer absences, a shorter duration of absence and a lower instance of presenteeism.

3. Employee and Family Assistance Program

Mental health challenges are a common reason for absences and presenteeism at the workplace. Providing access to an Employee and Family Assistance Program gives employees easy access to counselling and support for mental health. Working through a mental health challenge with a professional or addressing stress or anxiety before they develop into a larger problem can help minimize and prevent absences and presenteeism.

Unfortunately, mental health is often overlooked when compared with more traditional benefits, and in reality, it should be a priority.

Easy Access

The other important way that employee health benefits can impact productivity is by improving access to healthcare for employees. Including virtual healthcare in an employee benefits plan makes it more likely that an employee will access care; it helps remove obstacles to accessing care. In doing so, an employee is more likely to have a health condition addressed which means they can then focus on their work.

Accessing counselling through an Employee and Family Assistance Program is another example of making it easy for employees to get help. Coverage for counselling is a positive thing, but sometimes employees may find it challenging to take the first step. Locating a counsellor, contacting them, and waiting for an appointment can be intimidating. With the employee and family assistance program, they just have to make a single call.


It’s clear that a well-thought-out employee health benefits plan correlates with better productivity from your employees. Providing the right benefits is the starting point, but even with a comprehensive benefits program, there are some obstacles that may hinder its effectiveness.

Unfortunately, often employees do not have a thorough understanding of their benefits. Research shows that many employees do not even open plan materials. Finding creative ways to communicate plan information and make it easy for employees to know and use their benefits is essential in order to ensure they use the plan. Using the plan is key to impacting productivity.

Workplace culture can also be an obstacle. If your company culture doesn’t support employees in staying home when they’re ill and using their benefits to get better, then the positive impact that a plan can have on productivity will be diminished. Make sure your employees know that you’d rather they stay home and get well, than attend work while ill.

Good advice is key

An effective employee health benefits plan should be optimized to support employees and increase productivity. The right plan should be easy to access and well communicated so employees use the plan to achieve better health. Review your options with one of our licensed advisors on the phone or in-person or contact us for a comparison quote.

Whether you’re looking for extended health and dental coverage, disability coverage, or life and critical illness coverage, GroupHEALTH has affordable benefit packages that work as hard as you do.

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