Massive snowstorm will cost workers and businesses

This week’s goliath snow storm, which stretched across some 30 states, has put a dent in America's productivity.

Some cities like Tulsa, Okla., and Chicago shut down in the face of record or near-record snowfalls. In other places, government offices and schools closed while businesses remained open.

How much the storm will hurt US productivity is difficult to quantify. It's also uneven, hitting service workers much harder than office employees and professionals who can work remotely.

Organizations that depend on their employees’ physical presence will feel the biggest pinch. Restaurants, retailers, airlines, hospitals, hotels, and other service companies lose not only workers but customers on days when travel is difficult.

That's a big chunk of the work force. Some 60 to 70 percent of workers cannot work from home, said Joyce Maroney, director of The Workforce Institute at Kronos, a workforce-management company based in Chelmsford, Mass. The economic cost is not only lost wages to the employees, but also lost business for the employers.[Editor's note: The job title was corrected in this paragraph.]

Unplanned absences from weather or other causes last year cost an average of 8.7 percent of an organization’s base payroll, according to a June 2010 study by Kronos and Mercer, a consulting group. That translates into billions of dollars in costs to businesses over the course of a year, Ms. Maroney said. [Editor's note: The dollar figure was changed to accurately reflect the costs to businesses.]

The costs come from a loss of productivity as well as having to pay wages for temp workers to cover for absent employees.

For most people who work in an office, however, a storm doesn’t have a major effect on the organization, because it’s so easy to work from home.

“Years ago it would have been a much more serious problem than it is today,” said Peter Handal, the president of Dale Carnegie Training, based in Hauppauge, New York. People who work from home have obvious distractions, like having to shovel snow or deal with children who are home from school. So productivity may be lower, he added, “but things still get done.”

In any given week last year, bad weather keeps an average 154,000 nonfarm employees off the job, according to data from the Bureau of Labor Statistics. Those numbers spiked in the winter, with more than 1 million missing work last February when a huge snowstorm hit Washington, D.C. and Middle Atlantic state.

They're likely to be even higher with this week's much more intense and widespread storm. Numbers for January 2011 will be out on Friday.

But snow days can have an upside, too. They give companies an opportunity to show their employees that they care.

It really helps produce positive morale,” Mr. Handal said. “How many companies would not want to keep their employees safe?”