The problem of absenteeism and presenteeism in the workplace

Abstract

It is common knowledge that the cost of health care for employees and their dependents is an important consideration for employees, employers, and insurance providers. Much is focused on the expenditures often referred to as "direct costs," such as those related to premiums, disability, physician appointments, specialists, prescriptions, and emergency care. However, within the work environment, there are hidden costs related with poor health. Commonly termed "indirect costs," these costs are most often associated with worker absenteeism and presenteeism. Absenteeism refers to the absence of a worker due to illness (either a personal illness or as a caretaker for a sick dependent). When employees are absent from work, it often creates a burden on the company not only for lost productivity but also for those who are responsible for the sick employee's neglected work. Presenteeism, on the other hand, refers to employees who are legitimately ill but continue to come to work. There are inherent problems with presentees: (1) if they are contagious, they put other employees at risk of becoming ill and (2) being ill often reduces the level of productivity and the quality of work. Indeed, in an analysis of the costs associated with both direct and indirect health-related issues, Hemp (2004) identified that, on average, medical and pharmaceutical costs (direct costs) only account for 24 % of the total health-related costs for employers. An examination of the indirect costs showed that 1 % was allotted for long-term disability, 6 % for short-term disability, and 6 % for absenteeism. Strikingly, 63 % of the health-care costs were attributed to presenteeism.