Presentism: the hidden costs of business
(prez.un.TEE.iz.um) n
Presentism, 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 fully engaged and unproductive, primarily due to distractions from health and personal life issues. Presently, presenteeism is estimated to be up to 7½ times more expensive for employers than absenteeism. (1)
Statistically, presenteeism rears its ugly head and is shown for what it really is … a costly threat and somewhat invisible to employers. It is considered a threat due to its stealthy nature. The term itself is new, just added to our language. Considering the following alarming statistics, your business may be in jeopardy.
o Presentism accounts for 61% of an employee’s total lost productivity and medical costs. (4)
o Presentism costs employers an estimated $ 2000 / year / employee. (10)
o Employees working at diminished capacity cost employers $ 250 billion / year. (8)
o 42% of employees anticipate elderly care problems in the next five years. (two)
o 37% of employees with current elder care problems have lost time from work per week, a total of (11) hours / week spent. (two)
o On average, employees spent about 8 hours during the previous two weeks away from work, related to providing care. Part of that was paid, such as sick leave or vacation time, and part was not paid. (5)
o One of the EAP’s most requested resources is legal services to cover estate planning, family law, divorce, real estate, bankruptcy and other non-workplace related matters, accounting for 60-70 % of all EAP requests from employees. (two)
o 64% of unscheduled absences are due to family problems 22%, personal needs 18%, the mentality of being entitled to 13% and stress 11%. (9)
o 30% of employees come to work at least 5 days when they are too distracted to be effective. 28% of workers took time off to provide care and 25% took at least 1 hour a day to deal with their personal problems. (7)
o Absenteeism costs have increased from $ 610 / employee / year in 2000 to an average of $ 789 per employee in 2002. (6)
o Of all absence-related expenses, unscheduled time off has the greatest impact on productivity, profitability, and morale. (9)
o 49% of employees lose productivity at a rate of 1 hour or more / day due to stress, 40% lose 1-2 days / year, 37% lose 3-6 days / year and 23% lose more of 6 days / year of productivity due to stress. 44% of employees come to work 1 to 4 days a year when they are too stressed to be effective, 19% of employees come to work more than 6 days a year when they are too stressed to be effective . (3)
o 68% of employees take frequent “stress breaks” at work to talk to others. (7)
So what can be done? Some will argue “Do nothing” and it will resolve itself, after all, these issues have been a part of employer-employee relations for years. While that may be true, the actual associated costs of presenteeism are increasing, usually without the conscious knowledge of the employer. Those “stick your head in the sand” approaches to business operations often spell doom. The ignorance of any threatening, growing and unrealized operational problems will be really costly.
Potential Solutions: Employers should begin encouraging sick or distressed workers to stay home and obtain proper medical or professional care before returning to work. Consider financing or partially financing an on-site daycare. There are many successful models to emulate. Consider expanding or modifying personal leave policies to better serve employees. Expand EAP programs to offer additional assistance to employees with a wide range of emotional and family issues. This also has the invisible benefit of enhancing goodwill and showing employees that their employer cares about their concerns. While these actions may seem expensive, they are actually an investment in your business.
Consciousness is the key, the origin, the beginning of the search for solutions. Study your operations in light of the above statistics. Take steps to prepare for these unavoidable situations and incorporate the associated costs into your business model, rather than being caught at the end of the fiscal year with sharply reduced profit margins without reasonable explanation. Smart business people will realize the costs of presenteeism and take steps in advance to protect their business.
Bibliography and references:
- 1999 Study by The Employers Health Coalition of Tampa, FL
- Risks and Insurance, March 2004
- Business Legal Resources, April 24, 2003
- New study from Cornell University, published in April 2004 in the Journal of Occupational and Environmental Medicine. A study of 375,000 employees over a 3-year period
- Recent BankOne Employee Survey
- Dee W. Edington PhD, Director, Univ. Of the Michigan Health Administration Research Center
- Elevated stress levels lead to presenteeism, by Richard Chaifetz, CEO of ComPsych, provider of EAP programs
- Management Bulletin, 12/5/2002, BNA Career 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
