Is Presenteeism Costing Your Small Business?

When discussing poor productivity and lost profits, we hear very often about absenteeism. Instantly noticeable and with a cost that is easy to measure, when an employee doesn’t turn up to work the impact is clear, both to individual business owners and the wider economy. You can see the lost productivity, feel the impact on team morale, and quantify the exact costs of sick pay and employing extra cover.

However, while absenteeism certainly is an issue that creates a big loss to the economy, is it presenteeism – absenteeism’s steadfast yet misguided cousin – that’s actually costing your small business more?


What is presenteeism?

Presenteeism refers to the act of going to work, but failing to function with full productivity. An employee who drags themselves to the office with a stinking cold (infecting half your workforce in the process) is unlikely to be working particularly hard, because they feel understandably awful – but they have turned up. Simply being present can become, in many organisations, the be-all and end-all of an employee’s perceived dedication.

Presenteeism can also apply to those experiencing personal problems (for example, someone experiencing a divorce is unlikely to be fully engaged) or people who are simply burnt out, with their conscientiousness eventually resulting in an inability to perform to their best standard. This is especially true in businesses with the company culture of working through lunch breaks and staying well into the evening, with some employees even becoming embarrassed to leave at the correct time.

This “in rain or shine” attitude to work attendance is something that is regularly applauded, with many companies using employees such as this as an example, or giving rewards to those who have gone without any sick leave. Too often, the person who’s still at their desk at 9pm in the evening or first to volunteer for out-of-hours duties is seen as the best employee, with little analysis of their efficiency or true performance.

But is this a wrong-headed approach? It would be unrealistic to expect 100% staff engagement 100% of the time, but the many ways in which our society and business cultures encourage presenteeism may well be driving down real productivity.

The cost of presenteeism

The true cost of presenteeism will probably never be entirely clear, as unlike absenteeism, there are no absolutes we can measure. This being said, the GCC Insights report from Global Corporate Challenge suggests that the cost in lost productivity is profound. The report included nearly 2,000 employees and was validated against the World Health Organization’s (WHO) Workplace Health and Productivity Questionnaire.

The findings demonstrated that, while employees are absent for an average of four days a year, they are unproductive on the job for 57.5 days – almost three working months.

This may sound shocking, but makes more sense if you consider this is an employee working at 75% of their full capacity throughout the year – not an unimaginable prospect.

Uninspired employee causes presenteeism

How to prevent presenteeism

So how can you influence your company culture to ensure presenteeism doesn’t become a significant (if hidden) cost to your small business?

Offer a fair amount of vacation and sick pay

Of course, this will be dependent on what your business can afford, but it can make a big difference. In the USA, the average amount of paid vacation is 10 days after one year of service (although some offer none at all), while sick pay is not a federal legal requirement. Compared to Luxembourg, Norway and Belgium – where employees are paid 100% of their salary for at least a month when they are sick and are entitled to at least 25 days (including public holidays) of holiday leave – this is very low. Do you want to know the most interesting thing about this? Each of these countries is more productive than the United States.

The great thing about the USA for businesses, however, is that you can decide for yourself what’s appropriate, affordable and will most benefit your employees. Giving what you can and what works best for your business in terms of vacation and sick pay improves employee morale; gives them a chance to rest; and means they won’t be coming to work unwell and unproductive, simply because they can’t afford not to. This stops illnesses spreading to less hardy employees who find themselves laid up for a week. Moreover, it creates a positive, well-rested and energetic atmosphere, which fosters loyalty and boosts productivity.

Offer flexibility and remote working

Remote working doesn’t work for every business, but is becoming increasingly relevant in the modern workplace. Even “real-world” businesses such as cafes or manufacturers often have tasks that can be completed at home, such as running the brand’s social media accounts, emailing, marketing or bookkeeping.

If employees feel they can complete light duties at home when they are unwell, they won’t feel the need to turn up to work with their illness, and are likely to recover faster and more completely with the extra rest. This shouldn’t become an expected requirement (someone with a flu so severe they can barely open their eyes will not thank you for this extra pressure), but could be an extremely viable option. This is especially true for those who suffer with chronic conditions such as Lupus or IBS, where stress can exacerbate the issue.

Flexibility is also an important aspect of decreasing presenteeism. If an employee has a seriously ill family member and has to take them to the hospital every Thursday afternoon, you are going to have a much more engaged member of staff if you give them the flexibility to make this as easy as possible. Consider letting them come in earlier, or working an extra hour another day to make up time.

Encourage corporate wellbeing

The biggest aspects of presenteeism are low morale, ill health and burnout. By encouraging wellbeing amongst your employees, you can stop any issues growing into something far more expensive and difficult to tackle. You might introduce a meditation program, offer gym memberships as part of employee benefits, provide healthy lunches, or assiduously promote a good work/life balance with strict lunch breaks and home-times. Whatever it is, this care and attention can help your staff remain healthy and happy.

It’s clear that being engaged and productive at work requires enthusiasm for the role and the feeling that you are an important part of the business. As the owner, more often than not, this will come naturally (it is your company after all) but corporate wellbeing is a vital part of ensuring your employees feel a similar level of passion for their jobs.

Crappy employee

Don’t reward presenteeism

In Luxembourg, the world’s most productive country, the average working week is 29 hours. In Norway, the third most productive and also happiest country, it’s 27.3. A company culture which rewards presenteeism by giving the most rewards and accolades to the employees who stick around the longest may well be inadvertently contributing to sluggish productivity.

This is especially true when you consider that studies show that overwork is bad both for your employees and your business, with managers unable to differentiate between people who actually worked an 80-hour week and those who just pretended to. While employees may be in work for an extra three hours a day, it appears that actually discerning a difference in output to those that aren’t is more difficult than you’d imagine.

Giving rewards to those with the best attendance and least absence is one contributing issue in a company culture such as this. At the extreme, it can overlook and even denigrate the conscientious efforts made by members of staff who have had time off, but work very hard. For example, people living with chronic issues, those unlucky enough to fall very ill and employees who are experiencing grief may make heroic efforts to work in your company, simply because their everyday life is much more of a struggle than the healthy employee who’s had a couple of good years.

Also, by rewarding those willing to work the longest hours with promotions or more responsibility, you may find you end up overlooking more worthy talents. That employee who always sticks around until 8pm could actually be wasting most of the working day and simply wants to arbitrarily climb the corporate ladder; while the one who clocks out on time always gives 110%, and has a varied life and hobbies that later prove a huge asset to your business.

Whatever you decide to implement, transforming your company culture to one that values quality and efficiency rather than simply being present may well take you to new success.