MRO Magazine

Psychological conditions a leading cause of worker disabilities, says study

Toronto, ON -- Stress, anxiety, depression and other related psychological conditions are the leading causes of sho...


August 14, 2003
By MRO Magazine

Toronto, ON — Stress, anxiety, depression and other related psychological conditions are the leading causes of short- and long-term disabilities, costing Canadian companies billions of dollars in disability payments, according to a study by Watson Wyatt.

The Canadian 2002/2003 Staying@Work Study on Disability Management shows that despite the prominence of these conditions and increasing concern from employers about their prevalence, most companies are still not addressing them as effectively as they could.

Respondents ranked psychological conditions as the leading cause of short- and long-term disabilities (79% and 73% respectively). However, few companies engage in practices that specifically target employees’ psychological health: less than one-quarter (23%) have mental health programs; only 36% have stress management initiatives; and 38% have substance abuse programs.

“Organizations must consider implementing disability management programs that reflect a healthy workplace approach, focussing on both prevention and management,” said Joseph Ricciuti, national director of the group and health care practice for Watson Wyatt in Canada. “In today’s climate of complex and inter-related claim conditions, a more holistic approach with more accountability is called for. With such programs, employers benefit from sustainable lower benefit costs, reduced absences and improved employee health and productivity.”


Nearly half of those surveyed believe their direct disability program costs have increased since 1999. However, the actual cost figures reported in the study show direct disability costs as a percentage change of payroll are in fact down 12% overall compared to 2000/2001 and 23% compared to 1997.

Despite this apparent levelling of costs, Watson Wyatt warns that trouble may lie ahead for employers that don’t manage costs and programs proactively. “As workplace disability issues expand and the workforce continues to age, organizations face greater challenges in managing disability and the associated costs,” said Ricciuti.

“Indicators such as increases in benefit claims related to the aging workforce and number of calls to Employee Assistance Program providers, as well as hidden costs such as decreased employee productivity and those associated with replacement workers, show that while costs may not be increasing now, there is cause for concern.”

Additionally, the discrepancy between perceptions and actual costs of direct disability payments highlights a dangerous flaw in many disability management programs — a lack of measurement and analysis. Fewer than half of the survey respondents were able to provide specific figures for direct disability expenditures.

“To realize the full value of integrated disability management programs, companies must apply the same business discipline to these plans as they do to other core business functions,” said Ricciuti. “Metrics provide a good barometer of the general health of the workforce, and smart organizations can stay one step ahead with tracking methods developed to project and understand future costs.”

The Watson Wyatt 2002/2003 Staying@Work study surveyed more than 180 Canadian organizations, representing a total full-time population of over 500,000 working Canadians, over a broad spectrum of industries and geographic regions. The complete study is available through Watson Wyatt Canada (e-mail: For more information, visit