Presenteeism: The Hidden Costs of Business

(prez.un.TEE.iz.um) n

Presenteeism, a relatively unknown concept, is the complement of Absenteeism. It is defined as the measure of lost productivity cost due to employees actually showing up for work, but not being fully engaged and productive mainly because of personal health and life issue distractions. Currently, Presenteeism is estimated to be up to 7 ½ times more costly to employers than absenteeism. (1)

Statistically, Presenteeism rears its ugly head and shows itself for what it really is? a costly, somewhat unseen threat to employers. It is considered a threat because of its stealthy nature. The term itself is new, only recently added to our language. Considering the following alarming statistics, your business may be in danger.

? Presenteeism accounts for 61% of an employees total lost productivity and medical costs. (4)

? Presenteeism costs employers an estimated $2000/yr/employee. (10)

? Employees working at diminished capacity cost employers $250 Billion/yr. (8)

? 42% of employees anticipate elder care issues over the next five years. (2)

? 37% of employees with current elder care issues have lost work time per week, a total of (11) hours/wk spent. (2)

? On average, employees spent about 8 hours over the previous two-weeks off work, related to giving care. Some of that was paid, such as sick leave or vacation time, and some was unpaid. (5)

? One of the most commonly requested resources from EAP's are legal services to cover estate planning, family law, divorce, real estate, bankruptcy and other non-workplace issues, accounting for 60-70% of all EAP requests from employees. (2)

? 64% of unscheduled absences are due to family issues 22%, personal needs 18%, an entitlement mentality 13% and stress11%. (9)

? 30% of employees come to work at least 5 days when they are too distracted to be effective. 28% of workers took time off for care giving and 25% took at least 1 hour/day to deal with personal issues. (7)

? Costs of absenteeism have risen from $610/employee/year in 2000 to an average of $789 per employee in 2002. (6)

? Of all of the expenses related to absence, unscheduled time off has the biggest impact on productivity, profitability and morale. (9)

? 49% of employees lose productivity at a rate of 1 hour or more/day due to stress, 40% lose 1-2 days/yr, 37% lose 3-6 days/yr, and 23% lose more than 6 days/yr of productivity due to stress. 44% of employees come to work 1-4 days/yr when too stressed to be effective, 19% of employees come to work more than 6 days/yr when too stressed to be effective. (3)

? 68% of employees take frequent "stress breaks" at work to talk with others. (7)

So, what can be done? Some will argue "Do nothing" and it will work itself out, after all, these issues have been a part of employee/employer relations for years. While that may be somewhat true, the actual associated costs of Presenteeism are rising, usually without the conscious knowledge of the employer. Those "hide your head in the sand" approaches to business operation usually spell d-o-o-m. Ignorance concerning any threatening, growing, unrealized operational problem will indeed be costly.

Potential Solutions: Employers must begin to encourage sick or distraught workers to stay home and get appropriate medical or professional attention before returning to work. Consider funding or partially funding an on-site day-care facility. There are many successful models to emulate. Consider expanding or modifying personal leave policies to better aid employees. Expand EAP programs to offer additional employee assistance in a wide range of emotional and family issues. This also has the unseen benefit of enhancing goodwill and demonstrating to employees that their employer cares about their concerns. While these actions may appear to be costly, they are actually an investment in your business.

Awareness is the key, the origin, the beginning of finding solutions. Study your operations in light of the previous statistics. Take actions to prepare for these inevitable situations and build their associated costs into your business model, rather than being caught by surprise at the end of the fiscal year with drastically reduced profit margins without a reasonable explanation. Smart business persons will become aware of the costs of Presenteeism and take action up-front to protect their business.

Bibliography and References:

  • 1999 study by The Employers Health Coalition of Tampa, FL
  • Risk and Insurance, March, 2004
  • Business Legal Resources, April 24, 2003
  • New Cornell University study, published in April 2004 of the Journal of Occupational and Environmental Medicine. A study of 375,000 employees over a 3-year period
  • Recent BankOne survey of employees
  • Dee W. Edington PhD, Director, Univ. of Michigan Health Mgmt Research Center
  • Elevated Stress Levels Lead to Presenteeism, by Richard Chaifetz, CEO of ComPsych, provider of EAP programs
  • Bulletin to Management, 12/5/2002, BNA Professional Information Center
  • Braun Consulting News, 2003 CCH Unscheduled Absence, Business Insurance July, 2000, and the US Bureau of Labor Statistics
  • Cigna Behavioral Health, April 26, 2004

    • Daniel Sitter is the author of the breakthrough e-book, Learning For Profit, the revolutionary "how-to" book providing simple, step-by-step instructions to teach people exactly how to learn new skills faster than ever before. It is what the author calls a "skinny book", a new generation of e-book designed for busy people. Containing no "filler or fluff", it gets right to the point with no wasted time. It can be read easily and quickly on a computer, a PDA or printed for later reference.

    Visit http://www.learningforprofit.com/ or contact the author directly. This e-book is currently available from C|net's download.com, the authors' web site and a variety of online book merchants.

    Mr. Sitter is also a contributing writer for several online and traditional publications.

    In The News:

    pen paper and inkwell


    cat break through


    Summertime Blues

    It's hard to believe the year will be half over... Read More

    How To Prevent Your New Manager From Becoming A Statistic

    According to a study by the Manchester Group, 4 out... Read More

    Which ITIL Process Should We Implement First?

    The following question is usually debated a lot amongst IT... Read More

    Change Behaviors, Change Performance

    Every organization is looking for the holy grail of performance... Read More

    Partnering for Performance

    "The difference between a boss and a leader: a boss... Read More

    Five Overlooked Ways To Hire Winners

    Here is a true story. My dentist did a "clinical"... Read More

    Giving a Good Appraisal Interview

    Although this performance discussion is an opportunity for you to... Read More

    Innovation Management - idea selection and valuation issues

    Innovation is different and distinct from creativity in that it... Read More

    Creative People, Innovative People

    The title implies that some people are and others not.This... Read More

    Inventory Management 101

    Inventory management may seem complicated to some, but if one... Read More

    7 Steps To Hire The Best

    You can use this step-by-step method to hire applicants who... Read More

    Stopping The Brain Drain: How To Capture Key Business Knowledge Before It Walks Out The Door

    The verdict is in: More and more baby boomers will... Read More

    Disaster Prevention Tips For Hiring A New Manager

    It happens over and over in businesses every day.Within large... Read More

    Management Training: Are You Satisfied With The Results?

    If you're not satfied with the results of your management... Read More

    Preparing For ISO 9001 2000 Registration

    The steps need to be taken to prepare an organization... Read More

    Shrinkage Control

    What has been your store's shrinkage experience for the last... Read More

    Management Procedures Usability ? How to Improve

    Are your people consistently following your procedures? Each year, organizations... Read More

    Problem-Solving Success Tip: Dont Leave Your Key Stakeholders Guessing

    Communicate! Don't leave you key stakeholders guessing.We are generally not... Read More

    How To Manage A Difficult Employee

    Having to manage a difficult employee is never fun and... Read More

    Reprimanding Marginal Employees

    THE MARGINAL PERFORMER: Every manager must, from time to time,... Read More

    Status Quo Pep Talks That Can Threaten Your Leadership

    Organizations live and die by results. Yet most organizations get... Read More

    The Truth?

    The pure and simple truth is rarely pure and never... Read More

    Four Steps to Better Performance Reviews

    Direct reports-people who need direction and leadership-rely on their leaders... Read More

    The Rise of Corporate Chair Massages

    Employers have rapidly begun to understand the importance of stress... Read More

    I Said Pareto Chart? Not Potato Chart!

    Does this sound familiar? You were hired for the new... Read More

    Look Good on Voice Mail

    Your use of voice mail tells others a lot about... Read More

    Eight Key Steps to Building B2B Major Account Client Alliances

    Audiences who saw the fabled Broadway musical, Chorus Line, marveled... Read More

    Innovation Management ? Selecting Good Ideas

    Creativity can be defined as problem identification and idea generation... Read More

    Why Half of All Mergers Fail After the Honeymoon Ends

    Marriages and corporate mergers in America have at least one... Read More

    Why Outsourcing Could Be The Best Thing You Do For Your Business

    While it's probably not true to say that the traditional... Read More

    7 Strategies for Sustained Innovation

    The need for constant reinvention is a given in today's... Read More

    Take the Easy Route - Delegate

    It was 2.30 am. It was cold and dark and... Read More

    Five Ways to Turn Resistance into Opportunity

    Resistance. It isn't something people cherish or enjoy encountering. We... Read More