The Hidden Costs of Presenteeism

The Hidden Costs of Presenteeism

Jessica Elzinga, MA, CSCS, CES

Word count: 597 words
Time to Read: 2-3 minutes

Companies incur unnecessary costs—approximately $350 billion a year—as a consequence of unengaged people who simply show up for work. Some have dubbed this phenomenon presenteeism: the act of showing up for work in a fog or with impaired abilities due to chronic illness. These workers aren’t absent; they just go through the motions and their impaired performance actually costs more than absenteeism — and it’s potentially more lethal to the organization because it’s less obvious. Presenteeism’s hidden cost is the loss of productivity associated with workers who either don’t care enough to apply their full capacity at work, or who are willing but not able: they simply don’t have enough energy to put in their best efforts. “Depleted energy may be one of the reasons more than two-thirds of employees feel less than fully engaged at work” (The Gallup Organization, 2004).

Wellness managers are now working with their CFOs to take into account the previously hidden costs of presenteeism and what they are finding is astounding. Once factors like chronic health conditions, stress, depression and work-life imbalances are taken into consideration it becomes clear that presenteeism results in ten times the cost to companies of absenteeism. Presenteeism is almost three times as costly to companies as direct medical costs. Over 50% of organizations surveyed reported that presenteeism was a problem.

What can you do to prevent presenteeism?

Stress and chronic health issues are by far the greatest source of both presenteeism and absenteeism. Preventing disease through wellness programs is significantly less costly than medical costs incurred, absences, and lost productivity at work once a problem has developed. Implementing behavioral modification amongst employees is by far the single best way to control health care costs since the majority of healthcare costs is driven by five behavioral issues: smoking, drinking, eating, stress, and not enough exercise.

Wellness programs with more aggressive interventionist methods have seen significant results – employees who received direct intervention from a wellness consultant on average spent an extra 2 weeks at work and remained in their jobs 93% longer thus decreasing expensive turnover costs. Those who receive direct intervention were 40% more likely to recover from depression. Methods of intervention are simple and cost effective: coaching calls, direct personal encouragement to seek medical or psychological treatment, and above all education about personal responsibility for their own wellness. Investment in a wellness program can produce ten-fold savings in medical costs down the line as well as untold savings through the prevention of losses in productivity.

Educating your employees about their own health creates dramatic bottom line results in the long term. It is simple to do and employees are grateful and eager to take part. Those who participate remain loyal to their companies, work harder, and produce better results.

There are now proven methods for incorporating the costs and benefits of wellness programs which make sense to bottom-line focused CFOs. It’s easy to demonstrate to financial officers and decision-makers that wellness is a wise investment. Moreover, the majority of CFOs list improving the health of their workforce as a top priority objective.

The time to act is now before the competition creates a stronger, fitter workforce and retains its talent by keeping them happy and healthy on the job.

Our workshops offer simple and cost-effective solutions to implement employee education and reduce presenteeism by creating a healthier and thus more productive work environment.

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