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Presenteeism Costs 10x More Than Absenteeism. How Can Leaders Tackle This?

Absent workers cost employers around US$150 billion per year, but those who came to work and were not fully productive cost US$1,500 billion per year in the US, based on the BLS data. Why is this so? And how can leaders address this?

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We all had tough times in 2020 here in Europe. 

We’ve had challenges at work, in our relationships, in our businesses — name it, we’ve been through all of these. And the challenges continue as the world and the circumstances have changed since the global pandemic started last year.

Here in Europe, even just surviving this dark, cold weather, grey skies, no sun — with three lockdowns at home — has been challenging for some. Imagine not having the usual Christmas markets, no gyms, no indoor pools. All of these “disruptions” to the lifestyles we have been used to for years have led to increased depression.

Personally, my mental coaching bookings in the last six months, within three lockdowns, increased by 150%.

During my coaching sessions, I talked to many employees facing problems with resilience; some were depressed and anxious. And their issues vary:

  • Some experience fears of losing their jobs.
  • Some already lost their jobs.
  • Others had problems dealing with stress. 
  • A few had sleep problems.

Because of my exposure to various mental, emotional and psychological issues that people are facing due to the global pandemic, I can’t help but ask myself every night: Who is actually responsible for this? 

Research studies support the observations I had: 

  •  According to the World Health Organization (WHO), over 50% of people in Europe have a risk of getting into a depression. 
  • The European Foundation for the Improvement of Living and Working Conditions or Eurofound has found out in their study that nearly 25% of employees are not resilient enough to weather the challenges they face

So, again, the question is, who is actually responsible for these alarming stats?

Is it the employee’s history or resilience? 

Is it the employer?  

Is it the direct manager and the circumstances in the workplace?  

Who should support the people to have a healthy and a resilient life knowing that this actually has an impact on their work performance, and hence to the success of the business? 

While thinking about it, I remembered my talks and experiences in the last 20 years and it looks like that:

  1. Managers always look at the costs that are caused by absent employees.
  2. Leaders focus on what is called ‘absenteeism’ and ‘presenteeism’.

Absent Employees vs Absenteeism: What’s the Difference?

Let me clarify first the difference between ‘absent’ and ‘absenteeism’

Absent: When an employee doesn’t come to work — usually because of sickness or family concerns — due to an important reason.

The reasonable causes for short absences include vacation or occasional illness, as well as obligatory responsibilities like jury duty.

Absenteeism: Absence from work for a period of time beyond the acceptable limit.

Frequent causes of absenteeism include burnout, harassment, mental illness, and the need to take care of sick parents and children.

Back when I was a manager, I wasn’t fully concerned about the difference between being absent and absenteeism. Because the cost of being absent is very easy to know, which is: it’s the cost of: Number of Days Absent / Number of Available Days

But when I read more about leadership and studied mental coaching and resilience to better understand the needs of people, I started to become more aware of the impact of presenteeism and absenteeism rates. 

I also began to dig deeper and deeper, and at the same time I started to get closer to my team and understand them more and more.  

According to the US Bureau of Labor Statistics (BLS), the 2018 US annual average absence rate was 2.9%. For the private sector, the rate was 2.8%, while for the public sector the rate is 3.3%. The last number which was measured from the Eurofound In Europe, the average rates are between 3% and 6%.  

But what is the acceptable rate for absenteeism?

Usually, 1.5% is a very good rate for absenteeism. A higher rate can indicate an issue. The important part here is that employers should always have a look at the rate and think about what to do and in which areas employees have absenteeism rates of above 1.5%.

Presenteeism Is Nearly 10x More Expensive Than Absenteeism

From my point of view, absenteeism is not the best indicator of whether or not companies are on the right track. 

For instance, in the Middle East, as per the new GCC Insights, the Global Corporate Challenge (GCC) found out that on average, an employee doesn’t go to work only four days per year  — this is somehow a good percentage.

But as per the same report, presenteeism was 57.5 days each – almost three working months!

Unlike absenteeism, presenteeism refers to situations when employees come to work but are unproductive on the job due to many reasons, including burnout, harassment, mental illness, demotivation, no chemistry with the team, conflicts, time management and stress. It could also be because of chronic diseases, which are caused by stress. 

The High Cost of Presenteeism

The cost of presenteeism to businesses is almost 10 times higher than that of absenteeism.

Absent workers cost employers around US$150 billion per year, but those who came to work and were not fully productive cost US$1,500 billion per year in the US, based on the BLS data.

Why is this so?

The reason is simple: Employees who are unproductive, demotivated, burned out, not resilient, feeling harassed or mobbed or not being treated fairly at work, could make a lot of big mistakes that are much worse than not being there.

Presenteeism causes companies to lose deals or clients, or have team conflicts and negative vibes in the whole department and across teams. I saw many of these instances during my 20 years of corporate work.

What Can We Do About Presenteeism?

There are few proven ways to measure presenteeism. But one surefire way to decrease presenteeism rates is having in place the right leadership.

If there is real leadership in a company…

  • They will dig in and find the reasons for absenteeism and presenteeism through a voluntary, anonymous survey among employees — which is actually the best and the only way to analyse presenteeism.
  • They will understand how presenteeism affects the company, the employee, the costs and the turnover.
  • They will know that life-balance is the key to a perfect result at the end of the year.
  • They will know how to put the right employee life-balancing program that empowers their employees, as well as teaches them to be resilient, eat healthy, take care of their health and body and family — in order for employees to be grounded enough and be able to give all they need to perform well at work.
  • They will understand that a life-balance concept starts from the management board.
  • They will understand that their balance at the end of the year could be highly affected by presenteeism and a lot of actions should be applied every year with a great monitoring system to control this issue.

A real leader will explore flexible schedules and remote work. The return-to-work interview routine is also the role of the leader. Improving the employee and workplace well-being and providing balance and rewards and recognition are essential.

How U-livewell Can Help

A study showed that some brands that were considered the best in the market had gone totally out of the market in a few days due to a very high presenteeism rate among employees. 

The main reason behind this high presenteeism rate was the demotivation of the employees — seeing how the competition had much better and more modern technologies than their own; and seeing the gap get bigger between the company and the competition and at the same time between the management board and the employees.

It didn’t happen in one year but in a period of around 4-5 years wherein the management board ignored digging in to understand the reason for presenteeism. If they did, they could have saved the company. 

If they have engaged the employees more and shown them the love as well as how they should talk freely about their feelings and motivations with people, then they could have gone out of that deep hole they went into.

Leaders Must Help Their Employees Become Healthier and More Resilient

Employers need to understand that helping employees establish a life-balance is a process that requires a long-term plan supported by company policies. Employees need their leaders’ support in taking more deliberate acts toward maintaining their health and building resilience. 

We are very happy that in recent weeks, a lot of companies have discussed with us our holistic Life-Balancing live online program — U-livewell — as well as other programs in the market.

This means that companies have started to become more aware of the huge cost of not taking care of their employees and the huge positive impact of helping employees become more resilient through life-balancing programs.

Learn more about how our life-balancing program, U-livewell, can help you empower your employees to become healthy and resilient. 

CONTACT US: Support-Hotline: +43 664 2636997

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