Some data suggest that presenteeism is a larger productivity drain than either absenteeism or short-term disability. Further, presenteeism costs are compounded, some health experts say, because employees who work when ill generally cost more in the long run from increased health, mental health, and short-term disability utilization.
Such was the issue facing global mail and document manager Pitney Bowes. "We had consolidated our health plans, eliminated our point-of-service plan and instituted wellness and disease management programs," says Pitney Bowes benefits manager, Chris Berman, adding that the company even sponsors six onsite medical clinics.
"We'd done all the things everyone else is doing, yet our costs continued to rise and we thought, What are we missing?'"
Pitney Bowes enlisted the assistance of the Center for Work and Health to conduct a productivity audit to find the cost drain. Company officials were shocked to see they'd lost $51.7 million (the equivalent of 1,477 full-time employees) annually in lost production time due to conditions commonly associated with presenteeism, including nearly $10 million associated with cold and flu alone. Other conditions included headache, back pain, fatigue and gastrointestinal illness.
"Obviously, these were not the typical diseases targeted by disease management programs, because they weren't ones we could target with claims data," Berman says. "Still, these employees were there but not productive, so we had to find a way to manage the costs." Research shows the average U.S. employee loses 115 productive hours each year to health conditions, costing employers an estimated $2,000 per worker per year.
AdvancePCS Vice-President of Clinical Research and Development Walter Stewart says a common mistake committed by employers is targeting illnesses and conditions that have the potential to cost millions, not necessarily the ones that are.
"Employers need to understand the conditions among their workforce that are costing the most, and allocate their health care dollars and programs accordingly," he says.
He adds that funds can also be misappropriated when it comes to return to work programs for sick or injured workers. "We tend to spend a lot of time trying to manage people back to work, when it makes more sense to manage the flow of people into short-term and long-term disability programs. Often times, [presenteeism] today leads to STD tomorrow."
Stewart cites sufferers from common episodic conditions, such as migraines, as "valuable targets for intervention" to curb presenteeism. Mental health conditions such as depression also increase those costs, as loss of concentration and low energy are commonly associated with those illnesses and reduce employees' capacity to work.
In 2001, researchers at Yale University found that employees with chronic depressive symptoms were seven times more likely to show decreased workplace effectiveness than those without the symptoms.
"In our study, the impact of depression on function at work was substantially higher than its association with missed days at work, suggesting that previous reports of absenteeism may represent only a small fraction of the cost of depression in the workplace," says Benjamin Druss, M.D., the study's lead author.
Health conditions are not the only ones to blame for presenteesim, however. Employers may want to examine parents and workers with the least tenure with the organization, as they are likely culprits of presenteeism as well, according to Stewart.
Harry Spencer, vice president of global benefits for AOL-Time Warner says mergers often contribute to lowered productivity.
"During mergers, productivity usually takes a dive, because people are more concerned about job security and other changes than actually getting things done," he notes
At Pitney Bowes, cold and flu sufferers accounted for the largest amount in lost productivity. To remedy the problem, the company implemented small measures with the potential for big savings. They launched a company wide cold and flu prevention campaign to educate employees about handwashing and other practices to prevent infecting coworkers.
In addition, the company began offering flu vaccines at its on-site clinics and selected health plans that covered the vaccines.
Berman credits the changes to Pitney Bowes' efforts with the Center for Work and Health in convincing senior managers that presenteeism costs were in fact a real and significant drain to the company's bottom line.
"It was a piece of the puzzle that we always knew was there but now we were able to quantify it and go to senior management with definite numbers," Berman says.
Some critics of targeting presenteeism costs say it's pointless, since employers still gain if an employee is there but less functional as opposed to one who isn't there at all.
"If someone is at 30% capacity, how many effective hours are they really putting in?" Stewart disagrees. "The degree of costs also varies by job demands. Most people in office jobs can control their job demands, whereas people such as factory workers cannot."
Berman says the goal for employers naturally should be the development of healthy, fully functional workers.
"I don't think any CEO would say, Great! An employee at 30% is better than nothing.' Or at least I hope not. They should ask themselves, What can we do to increase that 30% to 90%?'" -K.B.