Economic impacts of workplace disability management in a public enterprise Online publication date: Sat, 05-Aug-2017
by Arto Reiman; Guy Ahonen; Pirjo Juvonen-Posti; Tiina Heusala; Esa-Pekka Takala; Matti Joensuu
International Journal of Public Sector Performance Management (IJPSPM), Vol. 3, No. 3, 2017
Abstract: This study analyses the financial impact of a recently implemented new work disability management system of a public in-house enterprise. The material was collected from the enterprise's and city group's databases. A cost benefit model was utilised for the economic analysis of the period 2009 to 2012. The main costs arose from the investments on loss of production due to lowered production standards and on the work ability coordinator's work. The main financial benefits came from the reduced pension costs and sick leaves. A traditional linear approach led to a 14% annual positive return on investment. A nonlinear cost assessment approach led to a 4.7-year pay-back period, followed by a 175% return on annual investment over the following years. The results support a long-term approach to assess the financial impact of work disability management.
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