The Cost of Presenteeism for Business
Absenteeism is a work behavior that every manager and Human Resources department deals with and dreads. When an employee fails to report to work, it often creates a hardship for that employee’s coworkers, manager and — depending on the position — customers. It is to be expected that employees may have to miss work occasionally due to all kinds of reasons. But it is actually a fairly expensive problem that is on rise. According to the U.S. Bureau of Labor Statistics, unplanned absences cost American businesses an average of 2.8 million workdays each year – equivalent to the loss of $74 billion dollars. Others think the cost to business may be three times as high.
Yet, as expensive as absenteeism is, there is a work-place issue that is even more costly and pervasive, affecting a much larger part of the workforce. It is called presenteeism. The term presenteeism originally referred to employees that aren’t absent from work but aren’t fully productive at work because they are sick. However, since then the definition of presenteeism has been expanded to include other reasons that cause employees to be less than fully productive at work. Today, employers and HR Departments have shifted their focus from issues such as tardiness and absenteeism to the larger and more pervasive problem of presenteeism. Considered now to be one of the biggest HR issues facing business, just exactly what is presenteeism? What is its cost to business? And, most importantly, what can be done about it?
When the term was pioneered, it referred only to employees who show up for work even if they are too sick to be productive. In that limited definition, it was understood that there was an underlying medical issue causing the employee to be underproductive at work. Those employees were ‘physically there’ but not really THERE! The consequence of presenteeism was reduced productivity and performance, which often negatively impacted coworkers and managers.
Today, scholars and business analysts have embraced a more expanded definition of presenteeism. Currently, presenteeism is seen as the phenomenon of employees showing up for work but not performing to their full potential because of a deficiency in their mental, physical or emotional well-being. It is now understood that employees may exhibit ‘symptoms’ of presenteeism even when they are healthy.
There are many drivers of presenteeism. Here are some of the most common.
Drivers / Causes of Presenteeism
Acute, Chronic or Episodic Illness
This is considered by purists to be the true definition of presenteeism… reporting to work while ill. Employees with a chronic (ie diabetes or asthma), acute (ie pneumonia or flu) or episodic (ie allergies, migraine, lower back pain) illness may report to work and yet not be able to fully engage and perform work because they may literally be physically unable to give 100%. Depending on the physical demands of an occupation, working while ill could have a profound impact on productivity, safety and service. In cases of contagious illness, presenteeism can further reduce company productivity by promulgating the spread of germs to other employees.
Difficulty after an Illness or Injury
Employees, recently diagnosed with a chronic illness such as Lupus, or recovering from a major injury or operation, may return to work after taking a short-term disability leave of absence but experience difficulty coping with the effects of the illness or injury on their lives. They may lack focus and have trouble hitting deadlines.
Major Personal or Family Problem
Employees going through a major person problem, such as a divorce or death in the family, may be reporting to work but are not performing up to par. They may appear distracted or disorganized, and may arrive late to work or leave early.
Child Care or Elder Care Demands
Employees struggling to care for newborn children or aging parents diagnosed with an illness such as Alzheimer’s or Cancer while still reporting to work may not be as productive, creative or engaged in their work as usual. Their attitude and energy may be impacted as they try to balance overwhelming demands on their time and energy.
When employees with a high desire to leave a job do not actually leave the organization, the result is employees who tend to be less committed. They are more dissatisfied with their jobs and often reduce morale in the area in which they work. Such employees “retire on the job”. They do not do their share of the work which causes workload problems for others. This is probably the most troublesome of all of the drivers of presenteeism and the one that can be most problematic to an organization.
The Cost of Presenteeism
Although presenteeism is becoming more familiar to employers as a concept, it is still considered the next frontier among workplace issues, and relatively few employers have taken any steps to address the issue of presenteeism among employees. That may be partly because, unlike tardiness or absenteeism which can be measured and calculated by multiplying the time not worked by the cost of that time, computing the actual cost of presenteeism is more elusive. It is hard to know if — and to what extent — an employee may less productive due to causes of presenteeism since so many legitimate workplace factors can also impact productivity. This makes it difficult to not only measure the extent of the problem but also to calculate the actual cost of presenteeism.
That said, here is what is known about the cost of presenteeism. It is widely accepted that presenteeism accounts for more aggregate productivity loss than absenteeism. It is estimated that the rate of presenteesim is as much as three time higher than absenteeism. Estimates for losses range from about $150 to $250 billion annually or about 60 percent of the total cost of worker illness. It has been described as the iceberg effect in which the more visible portion of work loss (absenteeism) is dwarfed by the portion beneath the surface (presenteeism). In fact, workplaces with a strong anti-absence culture may contribute to increased presenteeism. Factors — such as working in a firm that is in the process of downsizing, workplaces with punitive absentee policies, working as a non-permanent employee, and pressure from knowing that work is piling up when one is out — are all associated with lower absenteeism which, in turn, is believed to influence employees’ inclination to go to work even when they are not able to function at 100% level. Moreover, although 57% of private industry workers have access to some paid sick leave, the Families and Work Institute reports that only 39% of low-wage employees have any paid time off for personal illness, which results in workers are reporting to work when ill to avoid loss of pay.
The first step in calculating the cost and ultimately formulating ways to mitigate the problem is to be able to accurately diagnose its occurrence. To that end, the Department of Psychiatry and Behavioral Medicine at Stanford University’s School of Medicine developed a Presenteeism Scale to capture the cognitive, emotional and behavioral aspects of worker concentration in a concise measurement tool. They boiled their scale down to six key factors to consider in judging the incidence of presenteeism. They looked at the extent to which the driver (cause) impacted an employee’s:
- physical strength
- stress level
- feeling of hopelessness
Stay tuned next week as we look at ways to combat the expensive and pervasive problem of presenteeism. Don’t miss it!
Quote of the Week
“Hard work spotlights the character of people: some turn up their sleeves, some turn up their noses, and some don’t turn up at all.” Sam Ewing
© 2012, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.