Is “Presenteeism” Rampant in Your Business?

How many employees in your company come to work coughing, sneezing and aching all over every day?

So-called “presenteeism”, or going to work when sick, is a persistent problem at more than half of Canadian and U.S. workplaces. It costs American businesses a whopping $180 billion a year, according to research conducted by CCH, a Riverwoods, Illinois based provider of business and corporate law information.

Much like its more notorious counterpart absenteeism, it takes on growing importance as employers try to keep an eye on productivity and the bottom line this study shows.

“Employers are increasingly concerned about the threat that sick employees pose in the workplace,” said Brett Gorovsky, an analyst at CCH, a division of Wolters Kluwer. “Presenteeism can take a very real hit on the bottom line, although it is often unrecognized.

CCH research indicates that 56 per cent of human resource executives see presenteeism as a problem. That’s up from 39 per cent making the same complaint two years ago.

Presenteeism costs employers in terms of lowered productivity, prolonged illness by sick workers and the potential spread of illness to colleagues and customers, the report further says.

Presenteeism can prove elusive to measure, unlike absenteeism, according to Cheryl Koopman, a professor of psychiatry and behavioral sciences at Stanford University and an expert on workplace stress and presenteeism.

“We all think we know somebody who’s made us sick, when that person is speaking into the same phone or touching your computer or even turning your doorknob,” she said, adding that she too is guilty.

“Canceling a class because I have a cold just doesn’t seem justifiable,” she said. “I’ll keep my distance from the students, I’ll try not to cough at them; I think of how I’m going to do it without anybody getting sick.”

As often as two-thirds of the time, sick people go to work because they feel they have too much work to do, according to the CCH study.

The second-most common reason is workers believe no one else is available to cover their workload, CCH said.

“With corporate downsizings of the past creating a leaner workforce, employees often feel they have to show up for work, whether it’s out of guilt over staying home or concerns over job security,” Brett Gorovsky said.

Of course, for plenty of people, going to work sick is not a choice, said Cindia Cameron, organizing director for 9 to 5, an advocacy group that found 47 percent of the U.S.’s private sector workforce has no paid sick leave.

Employers and health insurers are increasingly eyeing disease and health management programs as a means to ensure a healthier workforce. Some companies and private health plans are looking at a powerful motivator to entice their employees to participate: cash incentives.

“A robust incentive strategy, whether it offers cash, non-cash or a combination of the two is critical to the success of any health management program,” said Michael Dermer, president and chief executive officer of IncentOne, a health and productivity incentive solutions provider.

According to a study by PriceWaterhouseCoopers, 84 per cent of large company CEOs views incentives as the most promising tool to drive health care cost reductions.

IBM has paid out $160 million in wellness incentives, an investment in its workforce the company says it expects to pay off as it encourages employees to participate in walking teams or play basketball during their lunch breaks.  Other companies are offering a take the free smoking cessation class, a cholesterol test or a regular trip on the treadmill – from all of which an employee can accrue points toward a company-funded shopping spree.
Or maybe even a trip.

Nearly half of major U.S. employers offer healthy living incentives to their employees.

“Data from clinical studies shows that healthier employee behavior pays off for employers in the form of decreased private healthcare costs, improved productivity and reduced absenteeism,” Dermer said. “The key is to develop a properly designed incentive program that recognizes the role of disease prevention and health management, and aligns rewards with an individual’s desire to achieve health improvements in a positive way.”

All this leads to a more positive bottom line.  According to the U.S. Department of Health and Human Services, wellness programs have a median return on investment of more than $4 for each $1 spent.

By Mark Borkowski

Mark Borkowski is president of Toronto based Mercantile Mergers & Acquisitions Corporation. Mercantile is mid market M&A brokerage firm. He can be contacted at [email protected] or