Contingency Planning

‘Presenteeism’ Costly For Business According To Survey

January 22, 2008

 As flu season gets under way, employers are gearing up for more sick employees dragging themselves --and their germs -- in to work.

According to findings of the 2007 CCH Unscheduled Absence Survey, 87 percent of employers report that sick employees who show up to work are suffering from short-term illnesses such as a cold or flu, which can be easily spread. The survey also found that just one in four organizations report they have a plan in place if a large percentage of employees become ill, indicating most organizations are less than well prepared in the event of a pandemic.

When sick employees show up for work, known as “presenteeism,” there is a significant and costly impact on an organization, not only in terms of risking the spread of disease, but also in terms of diminished productivity, quality and attention to safety. Overall, the CCH Survey found that 38 percent of employers report presenteeism being a problem in their organizations.

“We all know what it feels like to have the flu -- you’re not operating at 100 percent, you may not even be operating at 50 percent,” said CCH Employment Law Analyst Brett Gorovsky. “When you start thinking about that in terms of what you’re contributing to the workplace versus what risks you’re introducing -- in terms of quality, safety and spreading germs -- the bottom line for most organizations is that it’s in everyone’s best interest for sick workers to simply stay away.”

According to the survey, sending sick employees home is the single most common approach employers take to reduce presenteeism, used by 54 percent of organizations.

“Employers need to discourage both the ‘hero employee’ -- and even more so, the ‘hero boss’ -- who show up for work sick, ready to muddle their way through the day,” said Gorovsky. “Employees are in tune with the differences between what management says and what it means, and when they see their supervisors coming in sick, they’re convinced that’s what’s expected of them also.”

Other ways employers discourage presenteeism include educating employees on the importance of staying home when sick, used by 40 percent of organizations; 34 percent foster a culture that discourages employees from coming to work sick; and 30 percent of employers say they use telecommuting programs as a way to deter presenteeism.

“Employers need to be cautious about encouraging employees to work, even from home, while they’re ill,” said Gorovsky. “But there can be instances where allowing telecommuting as an option can keep a sick worker, perhaps someone with a sprained ankle, in the loop without requiring them the additional strain of coming into the office.”

The survey found that the most common reason that employees come to work sick, cited by 65 percent of respondents, was because they have too much work/deadlines. Fifty-six percent say there is no one available to cover workload; 55 percent don’t want to use vacation time; 49 percent want to save sick time for later in the year; and 49 percent report fear of discipline as the reason sick workers are on the job.

“If you have too much work to do, there is no one to cover for you, and you fear you’re going to be disciplined, you have some very strong incentives to show up for work no matter how sick you are,” Gorovsky said. “As a result, employers have to examine their absence control and workplace policies to make certain they are not causing unintended consequences.” Among the policies and programs Gorovsky recommends employers looking to curb presenteeism review are:

Disciplinary Policies –- an organization that disciplines an employee for taking an extra day of sick time, for example a sixth day when only five are allowed, needs to be aware of the consequences of this action –- namely, sick employees will be at work and may be spreading germs as well as exposing the organization to additional risks. According to the survey, 89 percent of organizations use disciplinary action to control absences.

Paid Sick Leave/Paid Leave Banks -- providing paid time is an effective way for employers to help manage presenteeism, and 69 percent of employers reported having paid sick leave or paid time off in place as preventive measures to help control presenteeism, according the survey.

Carry-Over Policies -- Because not every flu season is as severe as the next and employees often have good and bad years when it comes to their health, employers that allow employees to carry over some or all of their unused sick days may allow employees a better way to manage the time they need to recoup. Only 42 percent of organizations surveyed, however, allow employees to carry over sick time from one year to the next.

Wellness and Flu Shot Programs -- taking a proactive approach to helping employees manage their health, both in terms of maintaining a healthy lifestyle and taking preventative measures that reduce illness, also reduces the risk of presenteeism. According to the CCH Survey, 60 percent of employers offer wellness programs and 66 percent offer flu shot programs.

“With the costs of health care continuing to rise and presenteeism adding to that cost, employers are recognizing that keeping workers healthy is the most cost-effective approach they can follow,” Gorovsky said. “Wellness and flu shot programs are now among the top three work-life programs organizations offer, topped only by employee assistance programs.”

Presenteeism becomes an even more serious issue when considering the possibility of a pandemic.

Twenty-seven percent of companies report they have a plan in place in the event that a large percentage of employees become ill. This is almost a 100-percent increase since 2006, when only 14 percent of companies surveyed had such plans, however, it still represents just over one in four organizations.

“In a global economy, where workers are traveling across the world and easily capable of spreading a potential illness, more organizations are starting to realize the very real vulnerability a pandemic has on their business,” Gorovsky said. “Just as it’s become standard business practice for organizations to ensure their key providers have business continuity and disaster recovery plans, having a pandemic plan is fast becoming an expectation.”

Organizations that build pandemic plans may also help address their everyday presenteeism issues.

“As part of developing a pandemic plan, organizations need to thoroughly examine all their practices and procedures related to employee attendance and illness and take steps to formalize approaches to identify patterns of illness and the employer’s response,” Gorovsky said. “Many organizations that take these steps will then roll them out as part of their overall HR practices, making sure they’re adequately addressing employee illness, whether it’s just a mildly severe flu season or a serious pandemic.”