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


    A Fast and Simple Way to Update Your Business

    You open your computer, the flashing button says, "We have... Read More

    Five Overlooked Ways To Hire Winners

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

    The Inferno of the Finance Director

    Sometimes, I harbour a suspicion that Dante was a Financial... Read More

    Want to Manage Your Time? Get Real!

    You know the drill - the ridiculous deadlines, the relentless... Read More

    3 Tests To Hire The Best

    Question: What's the easiest, cheapest and quickest way to have... Read More

    Effective Meetings: Why Most Meetings are a Waste of Time

    Whether your company holds one meeting a week or dozens... Read More

    Instantly Uncover Your Corporate Culture

    Best Definition of "Corporate Culture"If you ask 10 people to... Read More

    Your Organization Is Only as Good as Your People

    Let's begin by singing the jingle from an old US... Read More

    Do You Need a Personal Assistant?

    It's great to be multi-skilled?be able to type your own... Read More

    Problem Solving

    When problem solving, you may recognize that you were working... Read More

    Taking on Six Sigma Programs - Guidelines for In-House and Outsourcing Decisions

    Based on a wild guess by a close associate of... Read More

    Entitlement Programs Kill Productivity

    In articles I've written over the years, I have used... Read More

    Dont Hire Squirrels to be Your Top Dogs

    Bad hiring decisions cost organizations, both in dollars and lost... Read More

    Top 7 Methods to Empower Employees

    How many times have you asked someone to do something... Read More

    What to Do When Trust is Low

    Trust is essential. You can't run a business without it.... Read More

    Have You Fixed the Broken Window?

    Left alone it doesn't take long for a building with... Read More

    Spinning Gold from Straw: Low-Cost Employee Retention and Motivation Tools in a Changing Economy

    New York, NY, February 25, 2005 ? Employee retention and... Read More

    Beyond Management Coaching: When Things Are Getting Out of Control

    Leaders and Managers often ask us, 'What do you do... Read More

    What Makes a Good Appraisal Interview?

    WHAT MAKES A GOOD APPRAISAL INTERVIEW?Here is a tip for... Read More

    Resolve Differences

    Resolving conflict doesn't come easily to too many people. Most... Read More

    Conquering the Number One Problem in Business--Poor Communication

    The Number One problem in business is poor communication: between... Read More

    What Personal Assistants Really Want

    What would happen if the personal assistants in your organisation... Read More

    Business Innovation ? Improvisation

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

    Quick Tip - Effective Meetings Have a Complete Agenda

    Most agendas for a meeting look like this.* Budget* Payroll*... Read More

    Hire Winners: Avoid These 10 Interview No-No?s

    Have you ever hired someone who did not live up... Read More

    Lone Rangers Suffer without Tonto

    A lone ranger is someone who prefers working in solitude... Read More

    The Top Six Reasons to Buy Rather Than Build an Inventory Management Solution

    Is building your own inventory management solution really your best... Read More

    The Compliance Officers Killer Application

    It used to be that only the largest multi-nationals needed... Read More

    The Changing Boss-Secretary Relationship

    THE CHANGING BOSS-SECRETARY RELATIONSHIP: Imagine a partnership at work. One... Read More

    A Leadership Screw Driver: The 90 Day Improvement Plan

    I was talking with first-line supervisors in a utility company... Read More

    Spotlight on Productivity: How to Overcome E-Mail Overload

    Do you ever feel overwhelmed by e-mail? Have you ever... Read More

    Personnel Access Poses a Continued Risk

    The Security Consultant's Perspective...Implementing Personnel Security Initiatives should be the... Read More

    Accountability Equals Meeting Success

    Leslie was the new manager of the group. She was... Read More