What Presenteeism Costs Today’s Businesses

Andrew Buck November 29, 2022

Most businesses are aware of how much absenteeism can cost them. These costs, and the problem itself, is quite easy to see. But there’s another issue that’s rife in workplaces today, which may well come with even bigger costs: presenteeism.

The cost of presenteeism is, unlike with absenteeism, hard to nail down. But from the data we can gather, the signs are not good.

Keep reading to learn more about how presenteeism costs businesses, and what you can do about it.

Learn more about presenteeism, including its causes, impact, and what you can do to prevent it, in this post.

What Does Presenteeism Mean?

Presenteeism is when people come to work, despite being injured, unwell or otherwise unfit to work.

It’s when someone has a flu, but comes in to work anyway, and as a result can only work at a fraction of their usual capacity.

Presenteeism is, in effect, the opposite of the more well-known condition of absenteeism. Absenteeism is when someone is habitually absent from work. Presenteeism means they are habitually present, even when they have good reason to be off.

What’s an Example of Presenteeism?

As above, one example would be showing up to work despite being sick.

Another is an employee who works through a physical issue, like a bad back, which affects their ability to work.

Presenteeism can also be, and indeed more often is, related to mental health. An employee is burned out, overstressed, overworked, and keeps coming to work, instead of taking a vacation or a day off.

The latter is the most difficult to spot, as there are fewer physical symptoms. Yet it may be the most damaging example of presenteeism for all involved.

Other examples of presenteeism can be employees working long hours, a ton of overtime, or working through their weekends or vacations.

Simply, it’s being present too much.

What Causes Presenteeism?

Presenteeism is often caused by good qualities in an employee, such as the desire to work hard and provide value to the business. This is one of the reasons it’s such a difficult thing to manage.

The employees at most risk of presenteeism are those who aspire to impeccable attendance records. Those who wouldn’t think about calling in sick and causing trouble for their employer.

On the other hand, it can also be a result of pressure from the company. Many businesses or managers put undue pressure on their employees to be present every single working day, often not knowing that this is causing a bigger problem than the odd sick day.

It might be due to an unreasonable workload, which makes the employee feel like they can’t afford to take a day off. The employee may also feel they lack the job security to take time off, or show any weakness, such as admitting that they are not well.

It could also happen when employees do not have enough paid sick leave, vacation days or mental health days available to them. Therefore, they may be financially disincentivized to take the time off they really need.

Learn More: the importance of Mental Health Days in the workplace.

What Are the Effects of Presenteeism in the Workplace?

Presenteeism can show up in different ways, not always easy to link back to the root issue.

You might notice symptoms or effects such as:

Generally, when you see these symptoms, presenteeism is already costing the business. There’s very little in the way of advanced warning signs.

So how exactly does presenteeism translate into costs for the business? We’ll look at that next.

How Does Presenteeism Cost Businesses?

To quantify the cost of presenteeism, we need to first consider how presenteeism affects the company’s bottom line. Here are the most significant ways:

Reduced performance/productivity

When someone comes to work sick, unwell, or injured, it’s likely their workplace productivity will be lower.

In some industries, on the job productivity is easy to notice – an assembly line worker who usually produced six widgets a day might only produce three. In others, it’s going to be a little more gray.

It can also be performance related, rather than productivity. The standard of someone’s work may drop, they may start making small errors, all of which costs the company.

Making other employees sick

Employees who come to work when they’re unwell risk spreading that sickness throughout the company.

This leads to more cases of absenteeism or presenteeism, as well as healthcare costs to the business.

Lengthy absences

Working through an illness or injury may also end up causing a longer absence and more serious health problems.

For example, in the early stages of an illness, the person might recover by simply taking a day or two off. But, by not taking the time they need to get better, illnesses can develop into chronic health conditions, that require a much longer layoff.

Turnover

Presenteeism, left unchecked, often turns into higher turnover, which has large, both direct and indirect costs to the business.

Decreased engagement and company culture

We mentioned that an unwell employee can spread their illness to fellow team members. An even bigger problem is when presenteeism evolves into social issues, such as isolation, depression and detachment from work.

This, too, spreads to other team members. It can lead to big problems with engagement and company culture throughout the business, which is very hard to fix.

Further Reading: How to Boost Employee Satisfaction and Retention in Your Startup

What is the Cost of Presenteeism?

So, using what we know, is it possible to put a number on what presenteeism costs businesses?

One study estimates the cost of presenteeism to US businesses at $150 billion per year.

The same article indicates that presenteeism costs two to three times more than providing direct medical care for employees (i.e. insurance premiums and claims by employees).

The Journal of the American Medical Association found that reduced productivity and performance due to depression may cost employers in the US $35 billion per year, while pain conditions (e.g. arthritis, headaches, back problems), may come with a cost of $47 billion per year.

A RAND Europe survey showed that businesses lose over 38 days’ worth of productive time as a result of presenteeism. 

A study on presenteeism among nurses in China found a clear link between presenteeism and worker productivity loss. However, it was unable to put a dollar figure on the cost to businesses.

None of these studies can really give a clear and true accounting for all the costs related to presenteeism. But it does give an idea of the scale at which we’re talking about.

One study estimates the cost of presenteeism to US businesses at $150 billion per year.

What is the Cost of Absenteeism?

In comparison, the cost of absenteeism is a little easier to quantify. It’s easier to see the productivity costs due to someone being absent from work, or to link turnover to absenteeism.

This article estimates the total cost of the loss in productivity due to absenteeism at around $84 billion per year, varying depending on occupation, with the biggest losses from Professionals (not including nurses, physicians and teachers) and Managers/executives.

Circadian’s publication Absenteeism: The Bottom-Line Killer found that absenteeism costs between $2,600-$3,600 per year per worker, with hourly workers coming in at the higher end, salaried employees at the lower.

Related Article: The Best Employee Wellbeing Initiatives (Based on Data)

How Can We Reduce Presenteeism?

If we agree that presenteeism is a problem, how can we go about reducing (or preventing) it?

One way is to create a culture that doesn’t push people to the point of overwork or burnout. You need to encourage employees to take time off if they need it, and make the health and wellbeing of your employees a priority.

You should also allow ample paid time off and paid sick leave, so employees don’t put themselves behind financially by taking time off.

A mandatory vacation policy is a good way to fight presenteeism. This type of policy forces (or strongly encourages) employees to take a minimum amount of vacation time each year, pushing back against those who insist on working themselves to the ground.

Also, simply educating employees and managers about presenteeism is a great start. Most people don’t know that working through an illness or injury can have much worse effects in the long run.

It’s important to make people aware of this. Employees may not be so willing to sacrifice their health for a little extra work, and managers will know that it’s in the company’s best interest to keep their employees in top shape – physically and mentally – long-term.

Manage Leave, Reduce Presenteeism Costs, and Keep Your Employees Fresh and Healthy With Flamingo

Flamingo is a tool designed to help modern teams run more smoothly, and avoid issues with burnout, overwork and presenteeism.

It makes requesting leave, handling leave requests, and managing the schedule at your workplace easier than ever. As a result, you’re going to build a team of happier, healthier and more engaged employees.

Click here to learn more about Flamingo, or click below to sign up free and start reaping the benefits of a better work culture.

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