The annual cost to employers of presenteeism is estimated at $150 billion.
The annual cost to employers of presenteeism is estimated at $150 billion.
The annual cost to employers of presenteeism is estimated at $150 billion.
The annual cost to employers of presenteeism is estimated at $150 billion.
The annual cost to employers of presenteeism is estimated at $150 billion.

Phoning It In: Do You Know How Much Presenteeism Costs Your Business?

Jan. 21, 2016
A new white paper explains that for employers, the impact of employee presenteeism can be just as costly as a physical injury in the workplace.

We’ve all been there: We drag ourselves into work when we’re exhausted or sick or distracted by family issues. We’re present, but we’re also absent. Our attention is not on completing job tasks to the best of our abilities; it’s on surviving the day and going home ASAP.

While most of us have experienced a periodic distraction – a bout of cold or flu that throws us off our professional game, for example – the ongoing loss of personal productivity related to physical or mental issues is known as “presenteeism,” and it’s a real problem for workers and employers alike.

According to a recent white paper issued by UL Workplace Health & Safety, “Phoning It In: The Dilemma of Employee Presenteeism,” lost productivity due to presenteeism represents “a significant hidden cost to employers.” Yet, the white paper authors add, “Many employers see employee presenteeism as simply a cost of doing business instead of developing or implementing programs that could effectively reduce presenteeism in the workplace.”

“Health conditions most frequently associated with presenteeism include allergies, back or neck pain, hyperten­sion, obesity and gastroesophageal reflux disease (GERD). Other causes include arthritis, asthma, migraine headaches, fatigue and depression. Often, the causes of presenteeism are deceptively similar to common health ailments occasionally experienced by many otherwise healthy employees. And, unlike absenteeism linked to acute illness or hospitalization, employee presenteeism is often hard to detect since affected employees still show up to perform their assigned responsibilities.”

The Consequences of Presenteeism

The UL whitepaper cites a survey of 30,000 U.S. workers that found that each employee surveyed experienced the equivalent of 1.32 hours per week in reduced performance due to personal or family health reasons. Surprisingly, that number actually is double the average number of absenteeism hours per week (.67 per week) reported by the same group of employees.

“According to the same study, the total annual cost of lost U.S. productivity attributable to health-related conditions exceeds $225 billion, with the cost of presenteeism estimated at more than $150 billion, or two-thirds of the total,” noted the authors of the whitepaper. “In a separate study, researchers estimate that employee depression alone costs U.S. companies $35 billion a year in reduced performance.”

Addressing the Issue

The whitepaper points out that “most employer-spon­sored healthcare insurance plans cover substantial portions of the cost to treat acute medical conditions, conduct diagnostic testing and provide prescription medications, as well as partial coverage for costs related to the diagnosis and treatment of mental health issues.” Many employers also provide wellness benefits, such as smoking cessation programs, contributing to gym fees or providing supervised dieting and nutrition programs.

“While employer efforts in these two areas have contributed significantly to the health and safety of employees, they often don’t fully address many of the chronic health issues associated with employee presenteeism,” noted the whitepaper authors. Insurance coverage for some chronic conditions may be limited in duration, causing employees to stop treatment when their insurance coverage runs out. In other cases, health issues may go undiagnosed or employees may not seek treatment at all.

As more employers shift the increased costs associated with healthcare on to employees (higher deductibles, higher co-pays), “it has the effect of reducing monies available for the treatment of non-life-threatening chronic conditions that are typically the primary cause of employee presenteeism.”

The Bottom Line

“Phoning It In: The Dilemma of Employee Presenteeism,” points out that companies have addressed the issues of worker health and workplace safety by creating separate and independent departments staffed with specialized professionals; one group of EHS professionals to develop and monitor workplace safety and another group of human resources professionals to administer healthcare plans.

“By taking steps to integrate existing health and safety efforts, companies can more effectively address the root causes of employee presenteeism. In this way, they can regain productivity lost to presentism and absenteeism, while also helping to better control the cost of healthcare insurance and workers’ compensation premiums,” say the whitepaper authors. “Viewed in this light, an integrated health and safety program is no longer an operations cost to be controlled but an investment in a company’s overall effort to improved profitability and competitiveness.”

The authors concluded: “Companies that have taken an integrated approach to employee health and safety have seen important reductions in the incidence of employee presenteeism and absenteeism, as well as material increases in employee productivity. These successes have resulted in healthier employees, improved financial performance and an increased competitive advantage against comparable businesses.”

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