Title: Economic impacts of workplace disability management in a public enterprise

Authors: Arto Reiman; Guy Ahonen; Pirjo Juvonen-Posti; Tiina Heusala; Esa-Pekka Takala; Matti Joensuu

Addresses: Industrial Engineering and Management, University of Oulu, PO. Box 4610, University Of Oulu FIN-90014, Finland ' Hanken School of Economics, Department of Management and Organization, Helsinki, Finland ' Finnish Institute of Occupational Health, Helsinki, Finland ' Finnish Institute of Occupational Health, Helsinki, Finland ' Finnish Institute of Occupational Health, Helsinki, Finland ' Finnish Institute of Occupational Health, Helsinki, Finland

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.

Keywords: case study; disability; economics; financial impact; organisational management; public enterprise; savings; sick leave; strategy; work disability prevention; WDP; work disability management; WDM.

DOI: 10.1504/IJPSPM.2017.085668

International Journal of Public Sector Performance Management, 2017 Vol.3 No.3, pp.297 - 310

Received: 17 Feb 2017
Accepted: 12 Mar 2017

Published online: 05 Aug 2017 *

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