While absenteeism is a well-known workplace difficulty, its flip side—reporting to work but performing poorly because of physical or emotional problems—is far more costly in dollars, productivity and liability. This phenomenon, known as “presenteeism,” is becoming recognized as an increasingly significant problem for employers.

Causes of presenteeism include health conditions as ordinary as a bad cold, minor injury, seasonal allergy or nasty headache. While less visible, personal difficulties outside of work can also affect job performance. An employee might be seriously distracted by child or elder care pressures, financial problems, or marital strains. Basically, “They’re there, and yet, they’re not there,” says Mel Fugate, Ph.D., professor of management and organizational behavior at Cox School of Business at Southern Methodist University in Dallas.

The Elements of Risk
In a survey of 29,000 employed adults, one in eight reported coming to work in pain or physical discomfort at least once in any two-week period. Their condition caused them to lose concentration, take longer to actually begin working, repeat tasks, accomplish nothing at all that day or feel fatigued.

“If a worker is so distracted that they’re not doing the job effectively, this is a risk to the organization,” says Barbara Eckert, director of wellness services for ComPsych Corporation in Chicago, a leading international provider of employee assistance programs. “This worker may actually endanger others; a bus driver has to be paying 100% attention.”

While presenteeism raises the likelihood of a mistake for anyone, the level of concern is highest when a job is very safety-sensitive or quality-critical. For instance, if a representative at your customer service center mis-types an account number during an allergy flare-up, no one is in serious physical jeopardy. The danger is far greater for an oil rig worker, pilot, equipment operator, train engineer, child care provider or anyone dispensing pharmaceutical preparations, however.

“The risk of human error from presenteeism can have a huge impact, with a single error costing a company loss of life, millions of dollars, brand impairment or litigation expenses,” says Bill Sirois, Senior Vice President and Chief Operating Officer at Circadian Corporation, a research and consulting firm in Lexington, Massachusetts.

Scope of the Problem
How widespread is presenteeism? Nearly half of all American employees admit being at work at least one to four days per year when they are too ill or stressed to be productive.

A sick employee coming to work (and infecting others) is the classic example of presenteeism, which Fugate believes is currently fueled partly by growing workplace instability.

“Our entire career landscape is awash in restructuring, downsizing and mergers. All the uncertainty leads to workers being preoccupied. It’s presenteeism when someone is surfing the net looking for new opportunities, because he might be out the next time the axe falls.”

Sirois cites a related problem: lower output by ailing employees who feel they have to drag themselves to work against their better judgment or desire. “Often, people who work excessive hours are not motivated by an overwhelming sense of loyalty or commitment, but by fear factors: job security, displacement in the next downsizing, being passed over for a promotion,” he says. “We’re still a can-do culture—people feel the expectation is that you’re there to work.”

Sleep deprivation can also lower productivity and raise risk. “We’ve become a 24-hour society. Half of [night] shift workers today are professionals—information technologists, the medical community, customer service agents, store clerks,” says Sirois. “Ninety-five percent of the population needs seven to eight hours of sleep to function normally. Shift workers average five hours. We take better care of our equipment than ourselves.”

Costs to Employers
Presenteeism is already costing American employers an estimated $150 billion per year in lost productivity alone. Researchers at the Cornell University Institute for Health and Productivity Studies (IHPS) estimate that corporate on-the-job productivity losses from presenteeism may be as high as 60% of the total cost of worker illness—exceeding the costs of absenteeism. They also found that the expense of on-the-job productivity losses is greater than medical costs in most cases.

“If a company’s health plan is poor...[sick] workers will come to work and not be as productive,” says IHPS director Ron Goetzel. “Employers need to weigh the cost of good medical care against the potential for on-the-job productivity losses. Yet this very large category of expenses has not been adequately considered by employers.”

In a study at Lockheed Martin, researchers from Tufts-New England Medical Center found presenteeism costing the corporation about $34 million per year. Often, chronic conditions contribute to people reporting to work in compromised condition. Among common ailments causing serious productivity loss at Lockheed Martin were allergy/sinus problems, chronic back pain, arthritis, flu, migraines and asthma.

Steps to Reduce Presenteeism
As employers recognize the problems of presenteeism, they are starting to explore remedies for the difficulties it can cause. “Risk managers need to identify real issues for employees, not just accept management views,” says Fugate. “The temptation is to look at dollar figures, then probabilities. Instead, try to learn your employees’ top concerns, in order to determine which could actually impact presenteeism, so you can allocate resources appropriately.”

Experts recommend several beneficial—often cost-effective—approaches, ranging from shift management to employee education to addressing worker anxiety and simply making the workplace more appealing.

Shift management policies to discourage presenteeism. A change in your organization’s culture may not be quick, but it is essential. For example, craft a more flexible time-off policy that is not restricted to physical illness. Then, to spread the word about ways to lower presenteeism, reach out to staff members regularly. Some employers set up “lunch and learn” programs to help re-orient supervisors and managers to adjustments in company approaches.

Managers need to be trained that it is okay to encourage employees to get better before rushing back to the workplace. “During flu season, companies should specifically ask people not to come in when they’re ill,” Eckert says.

Educate employees about their options. Give them permission to stay home when coping with an illness or an overwhelming problem. A more adaptable time-off policy builds incentives for employees to self-monitor, suggests Fugate. A new perspective (for both supervisors and workers) helps decrease annoyance that one person’s absence means a bigger workload for everyone else that day.

Learning that they can rely on each other strengthens bonds between workers, making it easier to pinch-hit for a colleague when necessary. Co-workers may say, “We can see you are really sick, Fred. Please go home. We will cover your work today. Don’t stay here and make us sick, too.” However, Fugate cautions, “The need must be genuine, such as the employee who has to take her mother to surgery. But take notice if 80% of someone’s illnesses or special problems happen on Fridays.”

Relieve anxiety about job security whenever possible. Reassure employees that management will keep them informed about pending changes. For example, if rumors about your industry or company are circulating, let workers know that no personnel changes are expected.

Make jobs more appealing. Heightening a worker’s enthusiasm increases concentration and productivity. Involve employees by asking, “what would make your work more stimulating for you?” Managers are often surprised when workers suggest low- or no-cost ways to add challenges to their daily tasks, which will elevate their sense of involvement and even interest in coming to work, Fugate reports. A frequent recommendation is job rotation for a short time.

Encourage wellness programs. A minority of workers—typically about 5%—account for 29% of lost productive time, making this group a good target for intervention, says Eckert. Relatively small investments in screening, education and even treatment can improve workers’ productivity significantly.

Identify all existing resources within your organization for employees grappling with significant problems. Then, let workers know that your human resources or employee assistance program can help resolve personal difficulties, such as legal matters (without stigma and with full confidentiality). Publicize assistance opportunities regularly via flyers, reminders in the company newsletter, posters, paycheck stuffers, etc.

Encourage supervisors to say, “If something is distracting you, we have some resources here to deal with issues outside of work. We want to help you resolve them and get you back to 100%.” For an employee in debt, hounded by creditors and trying to resolve tough budget problems, a referral to a local credit counseling service, or to an internal company resource would provide valuable support. With health-related issues, an employee can be directed to an appropriate medical facility, organization, or patient support group.

Effective New Approaches
Some companies have implemented creative ways to reduce presenteeism, often at minimal cost, with good results. For example, an in-house study for Comerica revealed that at least 1,000 people in its workforce of nearly 11,000 suffer from irritable bowel syndrome. Their discomfort, along with frequent restroom trips, reduced their productivity by about 20%. The bank sponsored a series of one-hour group sessions with a gastroenterologist, to give these employees better information on coping with their distracting, uncomfortable condition.

At International Truck & Engine Corporation, headquartered near Chicago, a survey of 5,000 employees identified seasonal allergies as a problem for more than 20%. Severe allergic reactions compromised all physical and mental functions. Even moderate allergies can lower one’s ability to concentrate by as much as 28%. In response, at their Fort Wayne, Indiana location, the company offered employees free consultation with an allergy specialist to help them manage their affliction better, especially during peak allergy seasons.

“We could see that people’s health status had a major impact on presenteeism. We know that productivity correlates with health, and that productivity loss is a big issue,” says William B. Bunn III, MD, JD, MPH, International Trucks’ vice president for Health, Safety, Productivity, and Security. “Our goal has become keeping people healthy, which keeps them at work—and effective when they’re here.”

International Truck now runs 16 different disease management programs for diabetes, asthma, cardiovascular illness and other problems. An ergonomics specialist can adjust an employee’s workspace to lessen physical difficulties. At each location, a doctor or registered nurse staffs an on-site clinic.

In addition, all factory sites have a fitness/rehabilitation center, plus musculoskeletal education programs that help workers cope with arthritis and related conditions. “We try to keep people from getting hurt, but if they do—whether on the job or not—we want to make sure they receive the right treatment and get to rehabilitation as rapidly as possible. Our aim is to get them back to full function,” says Bunn.

Have all of these efforts been worthwhile? Voluntary participation in wellness programs at International Truck is good, and turnover is now very low among the company’s blue-collar employees. “Workers compensation costs are down 11% this year, disability is down by about 30%, and absenteeism about 20%, compared to last year,” Bunn says. “We believe these preventive programs have a big impact on our ability to keep people healthy, at work, and more productive. They are also an investment to keep our health care costs under control.”

Recently, Sirois has seen some firms installing “napping stations’’ where employees know they can take a brief time-out to restore their ability to concentrate. “Having absent-minded people at work is not in a company’s best interests,” he says.

Reducing presenteeism is a cost-effective way to reduce risks and liabilities. “Companies need to make it a value, translate that into policy, then support and reinforce the policy,” Sirois says.

“Provide frequent reminders, especially during safety meetings, until it’s institutionalized and people realize they are expected to be at work every day—but also understand that if they are sick or impaired, it’s in their own and their employer’s interest to call in and take the day off.”

Eckert concurs. “Every employer gets value by not having a worker who is ill, stressed, distracted or underperforming. Learning to acknowledge and address presenteeism will lead to more productive and more motivated employees.”

Carol Milano is a freelance healthcare journalist based in New York.