Presenteeism: The $150 Billion Problem for Modern Businesses

Andrew Buck's avatar Andrew Buck November 18, 2024

What if your organization is losing more productive hours from employees showing up than from those staying home?

For many businesses, this is a reality. It’s called presenteeism, a lesser-known but pervasive issue that silently undermines productivity. Despite its prevalence, presenteeism is widely misunderstood among business leaders and HR professionals..

In this article, we’ll explore the concept of presenteeism, its hidden costs, and actionable strategies to combat it in your workplace.

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What is Presenteeism?

Presenteeism happens when employees are physically present but unable to perform at full capacity due to illness, injury, fatigue, or mental health challenges.

For instance, an employee might come to work despite being unwell, leading to diminished output.

And while physical ailments are easier to recognize, emotional or mental struggles can be just as debilitating and are far less visible.

When the employee continues to show up for work, it takes longer for them to recover, increasing the length of time their productivity is diminished.

The employee can even develop long-term conditions, such as chronic health conditions or burnout, which further affect their output, and often result in the employee leaving their job.

Related Article: The Importance of Mental Health Days in the Workplace

Why Presenteeism is Hard to Notice

Unlike absenteeism, which is immediately noticeable by the employee’s absence, presenteeism is difficult to identify.

Ironically, some of the most consistent attendees are most at risk of presenteeism.

A seemingly committed employee showing up every day may appear to be a model worker. However, their productivity might be far below par, and their performance will continue to decline if there’s an underlying issue not addressed.

If they aren’t limping or coughing, it’s hard to immediately pinpoint that there’s an issue at all.

The employee often won’t tell you either, as they believe they’re doing the right thing by pushing through and working.

Yet by doing so, they may be causing a problem that will fester and grow.

The Cost of Presenteeism

At first glance, presenteeism might seem like a minor issue compared to absenteeism. However, the numbers tell a different story:

Presenteeism often leads to an increase in turnover, which comes with additional costs on top of the lost productivity while the employee is still with the company.

Indirect costs of presenteeism

Beyond the dollar figures, presenteeism erodes employee wellbeing, increases cases of burnout, and damages workplace culture, creating long-term challenges.

The costs are usually not isolated to one or two employees.

For one thing, if an employee comes to work while they’re sick, they can spread their illness to other team members and increase the loss of productivity to the business.

But mental health issues, disengagement and dissatisfaction in the job can also spread like a disease.

The overall effect of presenteeism is the degradation of company culture, which is a serious issue, with no short-term fix.

Learn More: dive deeper into the direct and indirect costs of presenteeism, and how to prevent or reduce them.

What Causes Presenteeism?

Several factors drive presenteeism.

In it’s simplest form, it’s a case of employees not taking enough time off.

Often, what’s best for the employee would be to take a sick day, or a personal day, or a vacation. Yet because of various reasons, they don’t, causing a larger impact than their short-term absence would have.

Addressing these root causes is essential for reducing the impact of presenteeism:

Workplace pressure

Employees often feel compelled to work through injury, illness or fatigue due to fear of falling behind or letting their team down.

Negative sentiment around time off

A culture that stigmatizes taking leave, and views it as a sign of weakness or lack of commitment, can deter employees from prioritizing their health, and taking sick leave or vacation time when they really need it.

Further Reading: all you need to know about Employee Burnout, and how to prevent it in your business.

Insufficient paid leave

When companies offer minimal sick days or paid leave, employees face financial disincentives to stay home, even when unwell.

The employee might recognize that they need a day or two at home, but if faced with the prospect of missing pay, many will brave it and come to work anyway.

The ironic thing is that companies trying to save money by offering little or no paid leave may actually be costing themselves more, due to the long-term effects of presenteeism their policy causes.

Barries in the leave request process

Complex or intimidating leave policies discourage employees from taking necessary breaks. Examples include:

Even in open-minded workplaces offering ample paid leave, the anxiety of needing to actively ask for time off, through an email, face-to-face conversation or call, can be enough to prevent some workers from taking leave.

This is one way in which Flamingo helps save your company money. It makes it quick, easy and painless to request leave, and removes a big barrier in the way of team members getting the time off they need to stay healthy and happy.

For those who get anxiety over messaging their boss to ask for a day off (I’m guilty of this), the asynchronous nature of a leave request software is perfect for reducing presenteeism.

Run a more productive team with Flamingo.

Flamingo streamlines leave management, letting you spend less time managing paid time off and more time growing your business

Learn More →

How to Prevent Presenteeism in Your Workplace

The best defense against presenteeism is a proactive, prevention-focused approach.

Looking for the signs and symptoms of presenteeism helps, but by this time it can be too late. You’re already losing productive hours, and there may already be irreparable damage to the employee’s mental or physical health, or to their morale or job satisfaction.

Here are a few tips on how to build a presenteeism-resistance workplace:

Understand the problem

Awareness is the first step toward creating meaningful change.

Few people are truly aware that presenteeism is a thing. Educate your team about presenteeism and its costs, and make sure both employees and managers know the positive impact that can come from taking a few days off.

Shift KPIs to from attendance to results

Reward productivity over presence.

Many companies still view those who work long hours as the top performers, while seeing people who regularly take time off or leave early as a problem.

This sets a bad example that presenteeism is good for business – which it’s not.

A results-oriented performance model reduces the pressure to show up when unwell, and also puts the focus more on performance indicators that actually make a difference.

Offer a generous leave policy

Instead of trying to save money on employee benefits, flip the script and offer above-market paid leave.

A robust leave policy, including adequate paid sick leave and vacation days, supports employee health and reduces presenteeism.

By reducing presenteeism, and the long-term absenteeism and burnout it creates, you’ll get higher productivity, along with lower related costs (such as turnover, healthcare, and costs related to poor performance) as a result.

Destigmatize taking leave

Normalize time off by creating a culture where employees feel supported when prioritizing their health.

Actively encourage employees to use their leave days. If they need to take a sick day, or a personal day, or a vacation, don’t make them feel guilty for it.

Understand the long-term benefit that comes from allowing short-term absences, and instill this thinking into your company culture.

Final Thoughts

The traditional belief that the best workers are those who never miss a day is outdated and counterproductive.

Modern insights into productivity emphasize the dangers of overwork and the importance of rest. Employees working at less than full capacity, mentally or physically, are a hidden liability for businesses.

By addressing presenteeism head-on, you can foster a healthier, more productive workplace. Prioritize employee wellness, and you’ll see the benefits reflected in both morale and your bottom line.

Take action today to build a culture that values results, supports recovery, and thrives on trust. Your team – and your business – will thank you.

Andrew Buck's avatar

Andrew Buck

Andrew is the content manager at Flamingo. He has managed teams in multiple industries, for both physical and remote businesses, and has experience dealing with the ins and outs of HR and leave management on a daily basis.

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