‘Presenteeism’: Does it really hurt the bottom line?
September 4, 2009 by Jim GiulianoPosted in: Health care, Special Report
When times are tough, more people — concerned about keeping their jobs — come to work sick. Is it the truth or a myth that your company is better off if they stay home? Someone’s finally done some real analysis to get the answer.
In summary, most companies are seriously underestimating the cost of employees who are in poor health, but not sick enough to be out of work. That’s from docs in recent research published in the Journal of Occupational and Environmental Medicine.
They found that many “minor” conditions, from arthritis to anxiety, are taking a major toll on productivity … with a major price tag. Here are three sit-up-and-take-notice findings and what your company can do to get this under control.
1. You lose more in productivity than to doctors and drugs. Odds are, when your company tracks its healthcare costs, you’re considering health insurance premiums, doctor and hospital costs, prescription drug costs, etc.
But when it comes to employees in poor health, your lost productivity costs significantly outpace what you spend on medical and pharmacy costs: On average, for every $1 you spend on doctor and drug expenses, it costs your organization $2.30 in lost productivity.
2. There are different culprits when productivity’s concerned. Sure, your company expects to have to pay a high price when employees have one of these serious medical conditions: cancer, heart disease, chronic pain.
And they do. When you look solely at medical and drug costs, these ailments cost employers the most. But when you factor in health-related productivity costs, you’re looking at a very different picture. Then the five most expensive chronic health conditions become:
- depression
- obesity
- arthritis
- back and neck pain, and
- anxiety
No company can afford to dismiss or ignore any of these conditions.
3. Employees with multiple health risks cost you the most. What’s worse than having an employee who suffers from one of those or another chronic health problem? Having an employee who suffers from several of them at the same time.
Known as “co-morbidities” in the healthcare world, they exponentially increase the pain in your company’s pocketbook in lost productivity.
For example, people with relatively minimal health risks cost their employers $1,472 a year in lost productivity. But employees with three health risks will cost you $5,952 annually.
It’s worth looking at which of the top risks your employees have so you can formulate a strategy to attack them and start saving.
Tags: health, Journal of Occupational and Environmental Medicine
September 8th, 2009 at 9:58 am
More Big Brother???? Profiling?
September 8th, 2009 at 1:48 pm
I agree with B. Harris, this ariticle is profiling employees with healh issues, myself being a cancer survivor. Due to the economic reality of the times, haven’t we done enough to our employees? Big Bother is watching everything we do. My gosh we can’t even drive though a traffic light without our picture being taken.
September 8th, 2009 at 3:42 pm
Being inflicted by Cancer, chronic pain, heart problems and etc. are sickness that may be inherited.
What solutions are you going to go for as an employer , other than discriminate these employees upon knowing that they are affecting your bottom line severely. A lot of employers will say that they care about their employees, I still have to see one that is sincere about what they say out loud and often to the world.
Employees should be appreciated in what they are able to do and capable of doing and be allowed to be the best of what they are even with the limitations that they now have, specially long termed employees who on their “healthier” years “produced” more than they were expected to. Does it not all wash out in the “bottom-line” as zero.
If we can not view this in that manner I think we have lost all the human factors that we should consider when making such analysis. It reduces employers to a cold hearted, stoned “capitalist” who do not care about anything but their “bottom line”.
Now I understand why the government came out with ADA and all other acts to protect employees who are disabled.
Why do you think employees work? These employees who come to work despite the pain they have or problems they have should be helped and counseled. Health Insurance should include all means to help alliviate their condition – employees will heal better when they do not fear losing their job because they have afflictions (most of which they did not want to have) Depression & anxiety is one of the conditions that are helped by compassion. Have rapport with these employees and they will be more than willing to give their 110% to producing despite their affliction.
It is true that the business should be profitable and competitive HEALTH is wealth. Employers must remember that when they think of what kind of Health insurance they will purchase and offer. The preventive aspect and rehabilitation aspect of what a healthcare can offer is as important as providing a cure to an already acute case of any health affliction. this is what HR people should look out for. HR is as much the employer and the employee. They should assert action they think is needed to help employees and their employers as well by having an “open” communication with the decision makers of the company. In the same token companies should be ready to listen to their HR
not just reactively but proactively.
September 8th, 2009 at 3:44 pm
Big Brother? Profiling? Why do the comments we leave at the end of the ariticles always seem to point the finger at the government. It can be as simple as knowing what conditions there are and providing more education to your employees so they can better take care of themselves. Or maybe tweek a health insurance plan in order to cover more conditions. No questions, no profiling. Yes, some things can be this simple.
September 8th, 2009 at 3:54 pm
I agree with KP. We have successfully implemented a program targeting diabetes and depression based on a high number of claims. Employees feel as if they’re getting better information and care and the company benefits from reducing lost work days and productivity. In addition, both the company and employees are paying less in insurance premiums. This would have never been possible without “profiling” employees and their covered family members for health issues.
September 8th, 2009 at 5:11 pm
It’s a good thing we are outsourcing so many jobs, because if we want to hire productive employees we are going to be competing for an increasingly smaller number of candidates. A recent study by Johns Hopkins stated that by 2015, 41% of adults will be obese. With obesity comes diabetes, back pain, a higher risk of arthitis and cardiovascular disease. Although I am not a medical professional, I would also postulate that obese people tend to be depressed and suffer from anxiety.
September 8th, 2009 at 5:57 pm
There are two issues being discussed. First is the cost of someone crawling into work when sick because people are afraid to lose their jobs. Not only can they get others sick but how productive are they really? Just being present isn’t enough if they are making mistakes or not getting much work done. There is a cost associated to having someone physically working but not getting much done or done correctly. That cost is far greater than most people expect.
The second issue involves medical cost drivers. I am a benefits director and you better believe people are profiled. How do you think insurance companies issue rates? Underwriters look at past claims for the group and determine how much will be spent on claims cost next year. If someone is a diabetic, they know there is a significantly higher cost they can estimate next year for that person than for someone who doesn’t have a chronic condition. It is basic numbers. Chronic condition = higher claim costs. No mystery involved. It isn’t pick on the sick person but basic math indicates someone with various illnesses or conditions incur more costs.
Call it big brother if you like but we are self insured so we pay the employee’s claims out of our company checking account. We need to make sure we can afford to pay those claims. The article is not picking on the cancer victims. It is drawing attention to the smaller claims that are more frequent that are the big cost drivers for most plans. Insurance companies and employers need to budget money to cover expenses. As as cancer survivor, how would you like it if your employer or the insurance company came back and said, whoops…not enough money was budgeted so we can’t pay for your treatment? Claims cost money and the insurance carrier and the employer need to have enough capital to cover the costs. Whatever an employee contributes towards their insurance doesn’t scratch the surface when they are receiving expensive treatment.
One set of premature twins can cost $500,000 in claims but those claims don’t happen very often. There are a lot more obese people with low back pain and depression on insurance plans than people having premature twins. Those people who are obese usually have other conditions associated with their obesity like diabetes, depression and so forth. Not only do they have more insurance claims that can add up to significant dollars but they are less productive at work when they are sick. Companies often overlook the costs of presenteeism.
The article suggests looking at what is driving the health care costs so employers can tailor their programs towards getting employees healthy to save direct claim costs and to save money on presenteeism. It can be as simple as free flu shots, health club discounts and healthy snacks in the vending machines.
September 9th, 2009 at 6:54 am
We can talk about how employees shouldn’t come in sick all day long, but it depends upon what kind of behavior is rewarded. If you’re looked upon as a “slacker” when you take a sick day, or if comments are made about how great an employee is because he “never takes a sick day”, then your company is not only rewarding people who come in sick, you’re setting that as an expectation. Also, if your culture has the expectation that if you want to be promoted, you should work 50 to 60 hours per week to be taken “seriously”, then how is the overweight person supposed to exercise to lose weight? I think that offering healthy snacks and discounts or partial payments of health club memberships are really good ideas, but only if the corporate culture doesn’t penalize the employee for leaving on time to use the health club.
September 9th, 2009 at 8:24 am
In the state of MA, we have to insure all employees regardless of health status – we can no longer even ask for a medical history unless failure to disclose a condition would mean it affects the ability to perform a job. (By the way, this does make for expensive premiums, and this is part of the model the federal government is looking at for a national health insurance plan.) The problem I have with health profiling is generalization. Personally, I am a Type 2 diabetic, overweight but not obese. I do not, however, have high blood pressure, depression, arthritis, back pain or any other condition! I am one of those employees who works 50-60 hours per week, and rarely miss a day due to sickness (only 3 days in 5 years!) I am the head of both Financial and HR for a small business. And I can’t say the same for attendance and health conditions for several other employees, who, on paper, do not seem to be risks for absenteeism. As far as “presenteeism” goes, we appreciate employees who try and tough it out, but we have been known to send them home if their productivity seems hampered, or if they seem to pose possible contagion to others. In summary, we give preference to looking at each employee and each health issue as an individual case rather than discriminate against them because of a general profile.
September 9th, 2009 at 9:19 am
We tell employees to stay home if they are sick because we don’t want them to spread their illness (Swine Flu), but by this time of the year, employees have used up most if not all of their vacation (PTO) time and if they were to stay home, they don’t get paid. So we need something creative to combat the employee feeling hey haave to come to work so they can get paid. Rolling bank time (PTO) is a solution, as is allowing employees to borrow from the next year’s time, but limit it to only times of illness and to no more than a set amount of time.
I am making a distinction here between minor sickness such as the flu, versus debilitating illness such as cancer, that a company’s STD and LTD may well provide for in coverage.
September 9th, 2009 at 9:36 am
I think a major part of the problem is the medical profession itself. THe doctors treat the symtoms not the cause. I have high blood pressure, high colesterol, and heading towards sugar problems. I have had several injuries over the years due to my profession that prevent me from doing a lot of exercise. The fact that I am over weight at this time is the main contributing factor. But can I get a doc to deal with thaqt issue. Nope!
September 9th, 2009 at 10:08 am
I agree with T.C. I used to weigh 312 and was at the doctor a couple times a month, not to mention the chiropractor and the depression meds, you name it. But most insurance will not pay to help an overwieght person lose weight so they continue to be dollared to death with the other issues. And just to show that it does make a difference, I was lucky enough to get an insurance company that paid for a gastric bypass. Since I have lost 145 pounds I go to the doctor once a year for my annual. From what I can see of our company benefits it is these small issues that add up. We have only had a handful of serious sicknesses but we have numerous employees that continually see doctors for minor things.
September 9th, 2009 at 10:24 am
Jojo, your skepticism maybe well founded but your knowledge of industry is obviously limited. I point you to the R.W. Beckett Corp of North Ridgeville, Ohio They have been a leading manufacturer of oil burner furnace parts since 1937. Their “care and concern” for hundreds of employees should be the model for all businesses. For example, in educational assistance, many companies fund programs that will bring payback to the employer (accounting, engineering, sales, etc). How many industrials do you know whose commitment to developing people to their fullest potential included midwifery? Recommend you check them out and their CEO John D. Beckett and find out why
If all you ever work with are scammers, cheaters, liars and self serving greedy folks you may assume that is how everyone is. But America has a lot of folks who follow the original “Golden Rule” to the best of their ability and resource.
September 9th, 2009 at 12:29 pm
The comments early on got a little off the Presenteeism track but keep in mind that it is NOT your employer’s job to keep you healthy or even to offer you insurance. If they do, be happy about it and you had better hope they are doing all they can to keep costs down for EVERYONE. If that includes “profiling” so be it. Alot of employees have no idea where the money comes from that pays their doctors’ bills. There is no insurance fairy folks – as pointed out – in the case of self-insurance employers, they write the checks. That means they have less money for raises, expansion, etc. So as employees we should be doing everything we can to keep ourselves healthy. Pointing a finger at your employer demonstrates a lack of understanding. If employers start acting as charities, we’d all be out of jobs.
But I think the point of the article was that allowing people to work while sick creates a greater loss to the organization that just having the employee stay home due to mistakes made and sickening their coworkers. But the article really isn’t talking about people with the flu when it starts discussing big money – its talking about chronic issues. So I’m still unclear on what the message really is. I get that sick employees cost money. Does that about sum it up? I didn’t see any eye-opening information there.
September 9th, 2009 at 1:29 pm
Now I’m anxious about my trips to a mental health consultant!
September 9th, 2009 at 1:56 pm
I didn’t get a feel from the article just exactly how it costs the organization so much money when employees come to work while they are sick. I agree that it does, but I was hoping for some quantitative fact and details to support this supposition. Several of our executives put a great deal of pressure on employees to come to work when they are ill and I was hoping for something that would show them how this negatively impacts the bottom line. Unfortunately, I didn’t get that information.
Regarding the separate issue about chronic health issues, I firmly believe offering preventative care is the best course of action to take to make a dent in this expensive trend. The reason many people don’t get help is because it is financially out of reach since their problem is not covered by insurance. Obesity is a perfect example of this. Do we help obese employees lose weight and thus probably change their health outcome or do we pay for the major health issues that typically develop over time when a person is obese? Depression and anxiety, if left untreated, get worse and more difficult to treat and have a very negative impact on overall physical health when not addressed. If adequate treatment is provided initially, before these problems become “set in concrete,” additional related problems can be avoided and extensive treatment down the road can be circumvented. Mental health issues take a heavy toll on the body, as does stress, and they eventually have physical manifestations. But since preventative care is often not covered, particularly if that care involves something that pertains to mental health or “willpower” and choices (your thought processes), people go untreated and reap significant health issues at some point in time. Unfortunately, there is a prevailing feeling that a person who needs assistance with mental health issues is defective because they need help with things that the “normal” person doesn’t. The shame plus the financial cost for uncovered treatment cause them to avoid assistance until medical problems that can’t be ignored finally develop. Offering preventative care for both physical and mental / emotional conditions early on could significantly change the individual’s overall health picture. I would rather pay up front and provide the coverage to give employees the help they need early on because I believe this is a smart investment in the future of the organization…it will significantly reduce major claim costs down the road. And I believe data from various studies is bearing this out.
Some conditions are genetic and are not avoidable. We should never discriminate against a person because they face health challenges others don’t (yet?) face. Next year, you may be the person who has a heart attack before you’re 50, even though you eat healthy foods and exercise, or who has lung cancer even though you’ve never smoked and haven’t regularly been around second-hand smoke. Basically, I don’t think we should penalize employees who have health problems, but rather should provide viable coverage early on so they can obtain assistance before a condition becomes a major chronic health issue, provide information, resources and education so they can make educated decisions and then reward healthy choices. I don’t have all the answers, that’s for certain! But I do think this approach would have a positive impact long term.
September 10th, 2009 at 10:36 am
No, presenteeism does not effect the bottom line … when just answering the question … being present is better than being absent … Something is better than nothing. The company pays either way.
“Presenteeism” as it relates to H1N1 is not acceptable. If deseases can affect others then stay at home.
“Poor health and/or chronic conditions” is a totally different subject. Again, either employees are at work or they are not. Don’t confuse the “health” issue with the demands and requirements of the job. Companys are not welfare states and are “for profit”. They have to be to pay for the costs of benefits.
September 10th, 2009 at 10:38 pm
My company does not pay for ANY sick time. Not present – no $$ so I drag myself in no matter what shape I am in. Don’t like exposing co-workers especially since I don’t appreciate co-workers who come in while ailing but……. if the company cared at all – they would offer some paid sick days.
October 5th, 2009 at 2:23 pm
Tom,
Being present when very ill is not always better than staying home and there can be direct costs to a company when someone forces themselves to work when they are ill.
First, you can physically be present but not productive. I have been at work with the stomach flu and spent most of the day in the washroom. The work I did had to be redone. The business lost the work time when I was there ill and lost more of my time when I felt better and had to correct the mistakes I made when I was ill.
Secondly, you are much more likely to make mistakes because of illness and the medications you take to allow you to crawl to work. If someone has a desk job, it depends on their level of responsibility as to how much a mistake could cost the company. If someone does a more physical job, the safety issues are more tangible. Dropping a plate of food on someone, getting into a car accident or using bad judgement on the production line can mean a hospital trip, a workers comp claim/liability claim or even death. I don’t want to be anywhere near a pilot, crain operator or bus driver with a 104 fever, tweaked out on sinus pills and cough syrup.
Businesses are for profit but the cost of a legal, WC or liability claim or the cost of losing a large client’s busness will have a direct impact on profits. It is a calculated risk but it is still a risk. Some risks are greater than others but depending on your business, there can be a significant financial risk.
Also, someone doesn’t have to have H1N1 to be contageous. Illness spreads through the office like wildfire when you have a cubicle farm. I know I come to work more often than I should when I am ill but I can also work from home or close my office door and stay away from everyone.
So I disagree with your blanket statement that coming to work sick is always better than staying home for the profitibility of the business. Someone should not stay home for every sniffle but if someone is genuinely ill and should stay in bed, I don’t want them anywhere near me.
Patricia