Presenteeism costly to business

by 08 Jun 2007

ON AVERAGE, six working days a year are lost per employee as a result of presenteeism, at a direct cost to Australian employers of over $17 billion per annum, according to a recent study.

Moreover, if employers invest in health initiatives for employees to the point where then can halve the average productivity lost due to presenteeism per employee, they could potentially improve their profit margin by almost 10 per cent.

Presenteeism differs from absenteeism in that it refers to the lost productivity when an employee comes to work but cannot work to their full capacity because they are ill or injured.

Causes of presenteeism are diverse, ranging from common everyday ailments to chronic health issues. Of the 12 identified causes the largest contributors to overall productivity loss caused by presenteeism are depression and allergies (each on 19 per cent), followed by hypertension (14 per cent) and diabetes (9 per cent).

“Most of us have known about the phenomenon of presenteeism for a long time, but what this new research does is finally quantify it’s real cost to business,”said Heather Parkinson, group HR manager for Medibank Private, which conducted the research.

“All businesses, large and small, are affected by presenteeism, and for each one the solution is going to be different. The first thing that HR needs to do is assess the problem. Talk to staff; try to find out how their health affects their performance.”

For everyday conditions Parkinson said the solutions can be very simple, such as arranging alternative duties when people are sick. “For longer-term, chronic conditions business may find it is worthwhile to take a more active role in employee health.”

The research also found that on average, the labour productivity losses caused by presenteeism lead to a long-term decrease in GDP of 2.79 per cent. On an annual basis, this is equivalent to about $25.7 billion of real GDP based on 2004–05 prices.

The overall average labour productivity loss caused by presenteeism is estimated to be about 2.5 per cent, according to Medibank Private.


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