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Absenteeism vs Presenteeism: Which Costs More to Employers?

Presenteeeism vs Absenteeism - which costs the employer more?

Monday September 17, 2012

To all employers, listen up! Whether you know it or not, there are factors that contribute to the success of your company that are riding on the very health of your employees. In fact, according to the CCH Unscheduled Absence Survey from 2007, when employees call in sick (absenteeism) it costs large employers $764,000 annually! That is a big number. However, what seems to be causing a bit of a storm in the workplace is the idea of presenteeism, which can be described as being present at work but not being productive due to health reasons as acute as the common cold or as chronic as heart disease. So let’s take a better look how absenteeism and presenteeism really affect the workplace, and what employers can do to make this decrease and make their employees happy and excited to come to work.

Absenteeism

            Absenteeism can most easily be understood as when employees are not working at all and have taken a day of absence from the workplace. An employee will have either called out sick; have had a family emergency, or a prior engagement that must be met. Absenteeism has always been a delicate subject for employees and employers because of its implications behind the scenes. Employees may get the day off, but often stress about the reaction of their boss or the credibility of their commitment to work, or sometimes even a result in cut of pay. On the other hand, employers concerns include falling behind on important work, and losing money if the employee is getting paid sick leave. Either way you look at absenteeism it is seen as bad news, but is it really…?

Presenteeism

         A good way to describe presenteeism is being present at the workplace but not being productive due to an illness, lack of motivation, or work overload. Presenteeism can cause a large variety of work related issues. An example of this would be having an employee come into work with a bad cold or the flu. Having this employee come in can put your other employees health at risk and the reality is if they have fallen ill their quality of work is going to suffer as well. A big contribution to presenteeism and the highest; as you can see on the chart below is due to chronic diseases or disorders. When someone has type 2 diabetes, it may be very difficult to focus on work when they are worried about their blood glucose level. The major issue with employees that suffer from presenteeism for companies is it costs the same amount in wages and benefits for them, as it does for those working at full capacity. So the cost is the same while the output of work is reduced.

What Are Solutions to Absenteeism and Presenteeism?

  • “Paid Leave Banks” or AKA paid time off. This incentive eliminates the difference from taking a sick day, to a vacation day. It is up to the employee when they can use this time and allows them flexibility and less stress about missing work.
  • Be understanding and don’t discipline your workers if they take a sick day. Encourage them to get well soon!
  • Allow your employees to carry over unused sick days. This rewards them for being a hard worker, and shows that you appreciate it,
  • Allow workers to telecommute AKA working from home some days! This can help with presenteeism by working in a relaxed environment in the comfort of their own home. 

Calculating Cost of Absenteeism and Presenteeism

Cost = [% of work lost to risk factor(s) A and/or B] x [#of at risk employees] x [median compensation of all employees at the company]

Want to calculate your company's cost of presenteeism and absenteeism? It's easy but you'll need a few stats from your company in order to do it.

Find the median (midpoint) salary of all employees at the company. So if you have 100 employees, take the 50th top paid employee's salary. For simplicity sake, let's say this salary is $50,000. Then take risk factors A and B and multiply it by the number of employees who are at risk for the following risk factors.

Modifiable Risk FactorAbsenteeism (A)PresenteeismTotal
Diabetes (type 2) 4.94% 18.26% 23.20%
Depression 2.61% 14.51% 17.12%
Alcohol Abuse 5.00% 4.78% 9.78%
Overweight/Obesity 1.40% 8.30% 9.70%
High Cholesterol 3.14% 4.91% 8.05%
Tobacco Use 2.84% 4.78% 7.62%
Chronic Stress 3.08% 4.45% 7.53%
Asthma 4.80% 1.20% 6.00%
Migraine 3.96% 1.99% 5.95%
Physical Inactivity 0.28% 4.59% 4.87%