NASTY FLU A PAIN FOR SMALL BUSINESSES

A brutal flu season that has leveled millions of Americans may barely give the U. S. economy a case of the sniffles, but it’s crimping productivity, delaying product launches and battering sales for many businesses.

“This is causing real losses for companies,” says Andrew Challenger, vice president of outplacement firm Challenger, Gray & Christmas. “And if a large number fall sick ( at a company), it will stop production.”

The flurry of illnesses is especially vexing for small businesses that can’t offload work to other staffers.

Elephant Learning, a Denverbased educational software company, had to delay the release of an updated version of its flagship math learning product from early January to late February or early March because all three of its software developers came down with the flu in December, company founder Aditya Nagrath says. Each was felled for about two weeks. The problems were compounded when Nagrath himself got sick in early January.

About 20% of the 10- employee company’s customers, who pay a monthly fee of $ 35, canceled the online service, Nagrath says. “It’s been extremely frustrating,” he says. “You just feel like there’s nothing you can do to get control back.”

Based on a Centers for Disease Control and Prevention estimate that the average employee misses four work days a year due to injury or illness, Challenger figures the total cost to employers could be $ 15.4 billion in lost productivity, or output. Yet the CDC has said the number of flu cases could reach 2009- 10 levels, when the swine flu pandemic affected an estimated 24 million workers. That would push productivity losses to $ 21 billion, Challenger says.

Such a toll theoretically could cut first- quarter economic growth by three- tenths to four- tenths of a percentage point, from a projected 2.6% annual rate to 2.2% or 2.3%.

But that appraisal is likely far too high, economist Ryan Sweet of Moody’s Analytics says. Challenger calculated the productivity losses based on sick workers’ average wages. The government, however, tallies the nation’s gross domestic product by estimating the value of all goods and services produced.

There are other negative impacts on the economy. A sick worker typically stays home, reducing sales at restaurants and stores. But at least some of those sales are simply postponed. Overall, the effect on consumer spending likely is a wash, he says.

Some companies are coping with the dreadful season by easing policies. PDQ. com, a Salt Lake City software company, has always frowned on telecommuting. But it has become more flexible, CEO Shaw Anderson says. “We can relieve the stress” for employees, he says.