Weighing the Costs of Presenteeism

By Dixon, Keith | Chief Executive (U.S.), June 2005 | Go to article overview

Weighing the Costs of Presenteeism


Dixon, Keith, Chief Executive (U.S.)


CEOS MAY BE BURNING OUT THEIR WORK FORCES. BY KEITH DIXON

Woody Allen once said that 80 percent of success is simply showing up. But most chief executives rcalize that in today's business environment, simply showing up no longer cuts it.

To that effect, you already know that absenteeism hurts your bottom line. But have you considered what presenteeism is costing your business?

Unlike absenteeism, presenteeism is the new buzzword to describe low productivity of employees who are at work. It comes from distractions, be it physical (malaise, exhaustion), mental (concentration problems, depression) or because of problems at home (cldercarc, childcare issues) or at work (job security or performance concerns). It also comes from worker burnout-the exhaustion of mental and physical resources to complete self-perceived unrealistic work demands.

The Harvard Business Review estimates that presentccism costs American businesses $150 billion annually in direct and indirect costs. And if yon believe that your hnman resources department has it under control, think again. Most don't think that it is their responsibility, nor want to admit there is a problem.

Like most things, if presentccism isn't prevented, minimized or managed, it can give rise to depression or substance abuse, increased disability claims and higher overall medical costs. In other words, it can undermine a company as much-or more-than better-known workplace challenges such as absenteeism.

The management of employee stress, performance anxiety and work/life balance isn't just for 1IR to focus on. In fact, HR people typically expeet line-management to handle these types of problems. Bnt when all things are considered, presenteeism should be managed as closely as employee turnover or the cost of health care benefits.

Presenteeism is much more difficult than absenteeism to measure, but researchers have found that lost productivity due to presenteeism is, on average, 7.5 times greater than that lost to absenteeism. Moreover, recent industry studies show that productivity losses due to health-related presenteeism amount to three times that spent on direct medical costs. …

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