Sick at work: Presenteeism costs more than absenteeism

Presenteeism ‚ Æ employees attending work when they are unwell ‚ Æ costs employers significantly more than absenteeism, according to recent overseas research. However, the research also indicates that it is very difficult to measure presenteeism objectively, and that the link between it and absenteeism is difficult to evaluate.

Presenteeism is defined as attending work when unwell or in some way incapacitated and, therefore, unable to work at the normal rate of productivity. The term is sometimes also used to refer to employees not working to full capacity because they are disengaged from the organisation (eg bored or unhappy with management) and not applying maximum discretionary effort, but that issue is not explored here.

Extent of the problem

A survey by Canada Life Group Insurance in May 2013 reported that 93 per cent of its employees had attended work while they were unwell. This percentage was higher than those recorded in similar previous surveys, suggesting that the problem is becoming more prevalent.

The definition of presenteeism involves a decision by the employee to attend work despite being unwell, instead of taking time off. There may be various reasons for making this decision, including workload pressure, peer pressure, unavailability of paid leave (eg sick leave entitlement already used up) and fear of disciplinary action.

Hidden costs of presenteeism

The direct cost of presenteeism is the loss of productivity due to the employee not working to normal capacity. This can be fairly easily measured in some occupations (eg call centres) but will be difficult in others. However, studies have also identified several potential indirect costs, including:

• By attending work, the employee exacerbates his/her health problem and later has to take a longer period of sick leave to recover.
• Contact with other employees may cause them to also become unwell, so the extent of presenteeism and absenteeism are greater (eg contagious flu).
• Contact with clients and products (eg food contamination) could spread the problem in similar fashion.

On the other hand, some researchers have noted that the relationship between presenteeism and absenteeism will be flexible, and influenced by factors such as the availability of sick leave, the nature of the employee’s work, and the organisation culture. Organisations with high levels of presenteeism may have low levels of absenteeism (because there is a lot of pressure on employees to avoid taking time off) and vice versa.

Calculating the costs of presenteeism

As noted above, measurement in many cases will prove difficult, and often requires self-reporting by employees of loss of productivity. Many employees will be understandably reluctant to report performance shortfalls, particularly given the pressures that already influenced them to turn up for work in the first place.
Comparing the costs of presenteeism and absenteeism

A study by the Sainsbury Centre for Mental Health (UK) in 2007 estimated that the cost of presenteeism due to employees’ mental health issues was 1.8 times greater than the cost of absenteeism. Other studies have reported a lower ratio. For example, the UK Foresight Mental Capital and Wellbeing project study in 2008 claimed that lost working time due to presenteeism was 1.44 times greater and costs were 1.29 times greater than the losses due to absenteeism.

Implications

The research so far indicates that the ratio of the cost of presenteeism versus absenteeism will vary quite widely, but it appears that in most cases the cost of presenteeism will be greater. However, many practitioners focus more attention on dealing with absenteeism, because it is a more visible problem.

It is recommended that employers take the following action:

• Look for reliable ways to measure the cost of presenteeism. Most organisations now have effective ways of measuring the cost of absenteeism, but measuring presenteeism may prove to be a bigger challenge.
• Monitor trends in the cost over time, and look for causal factors.
• Evaluate the influence of cultural factors. For example, is too much pressure placed on employees to attend work when they are not well enough to be there? Conversely, is there an ‚ ≤entitlement mentality’ among employees that influences them to use up their sick leave entitlements and have none left to use when they are genuinely unwell?
• If presenteeism is a problem, identify its root causes, don’t just attempt to address the symptoms.
• Credible data on the costs of presenteeism will be necessary to prepare a business case if funding is required for initiatives to address the problems. This is necessary because presenteeism, as noted above, may not be an obvious and visible issue to many.

Sourced from Workplace Info January 2015 – By Mike Toten on 28 January 2014